Some things have changed very little in our industry and they will probably remain so for a long time. However, others have changed a lot in a very short period of time.
In this article, we want to go over some of these changes that we named “TRIPLE T”:
- 1st T – Fiscal Transparency: Following the OECD claims, most countries in the world have agreed to the automated exchange of information. Guernsey, far from being the exception, has been among the first jurisdictions to adhere to OECD requests. Not only in terms of the tax exchange, but also in terms of the approval of money laundering prevention standards. All these fiscal transparency agreements were preceded by amnesty opportunities that local governments offered their taxpayers.
- 2nd T – Regulatory Transparency: as a result of the first trend, we now have more and more regulatory transparency. The consultants´ activity is way more exposed that on other times. Besides, nowadays clients have much more power than before (networks, ombudsman, etc.)
Additionally, local jurisdictions require more licenses and, in some cases, the companies issuing the products require such as obligatory.
- 3rd T – Transparency concerning consultants´ commissions: within the trend of being fair with the clients and avoiding conflicts of interest, some jurisdictions have taken a step forward and decided to disclose the amount that each consultant receives in relation to his/her sales to the clients. They ask the client to sign a separate paper where the consultant/agent´s commission is stated in black and white.
We have yet to see the real impact behind this measure. But, it is our opinion that this “T” is very arguable, because what the client should be after is not how the fees are distributed, but the cost of the product. Moreover, if what we seek are ways of controlling the consultant/agent´s good advice, there are far more effective manners to achieve this. In short, truth is that in some jurisdictions this is already a reality that will take effect on July 1st, 2019. In Guernsey there is still no discussion on this point, but we cannot predict the future and rule out that it could be implemented eventually.
Author: Pedro Vargas
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