By Alan Markoff
Before Robin Goodman of RBC Wealth Management Financial Services Inc. left Canada to participate in the STEP Cayman Conference on 23-24 January at The Ritz-Carlton, Grand Cayman, she was told her by colleagues in the Cayman office that it was going to be “super cold” here during her stay. So she packed her heavy winter jacket for the trip.
“Your idea of super cold is much different than mine,” she said with a smile to the conference attendees while serving as one of the panellists in a breakout session titled “Family offices — what makes them work in the Cayman Islands.”
The Cayman Islands’ appealing winter weather aside, the four panellists for the family office breakout session all offered numerous other reasons why the jurisdiction is attractive for domiciling family offices.
Dart VP Business Development Chris Duggan, who served as moderator for the panel, listed the factors that enticed Ken Dart to create a family office here on Grand Cayman back in 1993 — factors that still exist, or have been improved upon, today.
Duggan said some of those factors included tax neutrality; the safety and security on the islands, both in terms of personal security and investment security; a politically stable government in a British Overseas Territory that is governed by English Common Law; good infrastructure in relation to a reliable, fibre-based network for communications; strong building infrastructure to provide safe places to live and work; proximity to the United States with abundant airlift to North American cities; good healthcare; a time zone that made it easy to communicate and conduct business with people located in North America and Western Europe; and best-in-class service providers including accountants, lawyers, trust practitioners and others in the financial services industry.
“Having all of those factors working in unison is what really sets Cayman apart from some other jurisdictions,” Duggan said.
For panellist Alex Leman, who is in the process of creating a family office on Grand Cayman, all of the factors Duggan listed as important to Ken Dart were also important to him.
“Every one of those variables you just mentioned is a consideration to me,” he said.
Leman noted that in Ken Dart’s case, his establishing a family office on Grand Cayman and then actively investing here actually contributed to the improvement of the factors that attracted him to the Cayman Islands in the first place.
“I think that speaks to the trajectory of Cayman,” he said. “Cayman has strengths that are foundational and growing.”
Leman also lavished praise on the Cayman Islands Monetary Authority, the regulator of the financial services industry.
“The regulatory relationship here is the best I’ve ever worked with,” he said, adding that financial service providers can propose new and sophisticated structures to the Cayman Islands Monetary Authority and have the professionals working there understand and discuss those structures, all the while being effective and diligent regulators.
Having top-notch talent in the public sector is only one aspect of the talent that lives and works on Grand Cayman, making it ideal to domicile a family office, Leman said.
“Some of the smartest people I know are here in Cayman,” he said.
Challenges
Earlier in the discussion, the panellists were asked to give their own definition of a family office.
Leman quoted an old friend in the industry who liked to say, “If you’ve seen one family office, you’ve seen one family office.” That’s because by the very nature of the structures and family dynamics, they’re all different.
“There is no one definition of a family office,” said panellist Sonia Park-Root of RBC Wealth Management Canada. “A family office’s purpose is driven by what the family office is trying to accomplish.”
In general, however, family offices are formed to ensure wealth stays in a family over generations. However, Park-Root said wealth isn’t about only financial capital, but also intellectual capital, human capital and even social capital.
“All families have different dynamics and some are more challenging than others,” Park-Root said. “But I think the most successful family offices are those that have structures in place to deal with family dynamics.”
Speaking about the global regulatory challenge facing family offices, Goodman said in times past, people could live in one country and have their wealth domiciled in another.
“That’s changed dramatically,” she said. “Now, you go with your money to a jurisdiction. What people are really looking for now is a jurisdiction with a history of having to deal with wealth and with families, and one which has the trust professionals to do that.”
Cayman fits that bill, all the panellists agreed, and Leman spoke to the trust professionals aspect of that in particular.
“The sheer talent pool of people in Cayman who can serve as trustees is unlike anywhere else I’ve ever been.”
This Article Originally Appeared In The February 2020 Print Edition Of Camana Bay Times With The Headline “Why Cayman For Family Offices.”
About the author
Alan Markoff has worked with Dart as the editor for Camana Bay Times for three years and has been writing professionally since 1997. Born and raised in Cleveland, Ohio, Alan graduated from the State University of New York at Albany with a degree in English, and first moved to the Cayman Islands in 1982. He has 16 years of experience in the real estate industry and previously worked as a journalist for Cayman Compass before joining Dart to relaunch the Camana Bay Times monthly newspaper. An avid baseball fan, Alan loves travelling but also schedules trips back home around catching a summer game or two with his home team, Cleveland Indians.
