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Emerald Trust - investment diversification and asset protection for future generationsPublished on 17 May 2019
What is the Emerald Trust?
PR: Emerald Trust is a streamlined Jersey trust offering linked to a discretionary managed portfolio via the Stonehage Fleming investment platform. The investment strategy is designed around the wishes of the trust’s ‘settlor’ and the nominated beneficiaries.
Aimed at clients holding investment assets in a trust with a value of up to £5m, the Emerald Trust is linked to the services of Stonehage Fleming Investment Management, Jersey. It gives clients simple and cost effective access to both trust and investment services. We believe the offering is attractive to South African clients looking for a flexible succession planning solution. The innovative structure provides for a Protector function with certain powers, which may be reassuring for those accustomed to being solely responsible as both settlor and trustee on other types of trust.
What are the advantages of Jersey as a jurisdiction?
PR: Jersey is a well-established international financial centre, which offers both political and economic stability. Most of the major banks and international law and accountancy firms have a base here. Operating under English Common Law there is the concept of jurisprudence - the recognition of the existence of trusts over centuries and the whole body of precedent case law. It means that if there is any form of litigation between beneficiaries or a third party suing the trustees, you have a much better idea of how the courts are likely to react.
How do you work with South African investment advisers?
RB: In 2018 South Africa was ranked number six in the world - just below Australia’s fifth - in terms of the number of certified financial planners (CFP) by territory (Source: Financial Planning Standards Board), so it is a heavily traded, competitive market. As a rule, South Africans like investing in direct share portfolios and favour them above mutual funds. Many advisers in South Africa provide investment management and investment advice but do not tend to consider any estate planning. That is where we can work together with them to add value.
Investing in US dollars and sterling can be an expensive exercise for South African investors. A share portfolio with, say, 60-80% US stocks will expose a South African client in his or her estate to 40% US Estate Tax on the US situs assets. With the Emerald Trust, we offer another level of advice. Working with the client and their adviser, we can explore the options - be it moving into a fund, a trust, using a wrapper, and managing risks. There are many options available.
How can the Emerald offering help to manage risk?
RB: Roughly speaking our clients typically have three blocks of wealth. The first block is for their daily needs, the second is capital for retirement planning and the third is really any ‘excess’ money that they might want to set aside for the next generation. That last block is where we can help. Once you are dealing with the third block, you have the ability to invest and diversify, enabling you to manage country-specific risks.
Disclaimer: This article has been prepared for information only. The opinions and views expressed on any third party are for information purposes only, and are subject to change without notice. It is not intended as promotional material, an offer to sell nor a solicitation to buy investments or services. We do not intend for this information to constitute advice or investment research and it should not be relied on as such to enter into a transaction or for any investment decision.
Whilst every effort is made to ensure that the information provided is accurate and up to date, some of the information may be rendered inaccurate in the future due to any changes.
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It has been approved for issue by Stonehage Fleming Investment Management Limited, a company authorised and regulated in the UK by the Financial Conduct Authority and in South Africa by the Financial Sector Conduct
Authority. It has also been approved for issue by Stonehage Fleming SA which is regulated in Switzerland by the Association Romande Des Intermédiaires Financiers and Stonehage Fleming Trust Holdings (Jersey) Limited which is
regulated by the Jersey Financial Services Commission.
It has been approved for issue in South Africa by Stonehage Fleming Financial Services (Pty) Ltd, an authorised Financial Services Provider (FSP no. 9587).