THE island’s growing fund industry needs to keep pace with the competition. Guernsey Fund Managers’ Association chairman John Le Prevost said that although the constant flow of new money to the island was a good sign, it could not be complacent.

The Guernsey Financial Services Commission last week revealed that a record £63.6bn of funds were now administered or domiciled in the Bailiwick.

Mr Le Prevost said that the second-quarter figures were the result of a continuing healthy inflow of new fund structures from new and existing sponsors, which was important because many funds had a fixed life.

He added that the flow of new money into existing funds was a good sign that investors and advisers were not averse to investing in Guernsey-based funds.

‘Together, these two observations demonstrate the continuing attractiveness of Guernsey as a favoured jurisdiction by both fund sponsors and investors,’ he said.

‘However, there is no doubt that competition from other jurisdictions for the same type of business is on the increase and we cannot afford to become too complacent about our current healthy position.’

Mr Le Prevost said he was encouraged by efforts being made behind the scenes by the industry and the authorities to support the sector and ensure Guernsey retained its reputation as a well-regulated yet cost-effective jurisdiction in which to domicile all types of investment fund structures.

The association has about 60 members, made up of fund managers, administrators, law firms and accountants, who operate in the sector.

It is encouraged by the fact that a fresh look is being taken at how the island is viewed internationally as a well-regulated jurisdiction.

‘The perception must be that we are a well-regulated industry and part of this process is to identify our strengths and build on them, and where perhaps we might have unnecessary regulations, consider dispensing of them.’

The association believes that for Guernsey to remain competitive, it is important that the cost of regulation to the industry is kept under control.

‘Looking forward, I would like to think that towards the end of this year, we will have identified our new image for the future and identified what we want to achieve.

‘We live in evolving times and we have to move with them. The Protection of Investors Law is from 1987 and I think the industry and the world has moved on considerably since then.’

Mr Le Prevost also welcomed the appointment of former GFSC director Talmai Morgan as chief executive of Guernsey Finance, the industry’s promotional agency.

‘I think the agency has become a well-recognised source of information on Guernsey. People look to it for information on the island, which is a credit to former chief executive John Bridle and the way he set it up.

‘Now that it has the recognition it deserves, we welcome Talmai’s appointment because with his understanding of financial services, he can pull together a cohesive marketing strategy for the whole industry going forward.’