RBC Wealth Management, itself a division of the Royal Bank of Canada, is the largest private sector employer in Jersey, opening new offices on the island at the end of 2016.
Since then it has trimmed staff and last made an acquisition in the fiduciary services space five years ago.
David Foster, head of Fiduciary Services, believes the size of the company and its banking parent put it at an advantage to smaller rivals.
“There are more and more regulations which are pertinent to clients of trusts. It undoubtedly creates a cost pressure on the industry which has increased costs alongside the threat to confidentiality. With that comes an opportunity for big players,” he told International Adviser.
“We are comfortable as an organisation with the rising regulatory status of trusts. Clients want confidentiality and we can give them compliant confidentiality.”
On the Common Reporting Standard (CRS), Foster says RBC is “ready to roll” but he believes smaller firms have further to go to put the infrastructure in place.
An industry in flux
Trust and fiduciary services is an industry which prides itself on close partnership with clients and quality of service.
It is also an industry that has become used to rapid change and tougher public scrutiny.
Many banks have exited the trust business since the financial crash, like the accounting firms that preceded them.
In recent years, private equity (PE) has had the greatest influence, attracted by simple operating models and stable cash flows.
PE followed a wave of consolidation led by the banks that swooped on international accounting and law firms and in-house trust services divisions when shifts in accounting standards forced them to divest.
The future
“Law firms are getting back into the industry at the same time that private equity funds have been looking for businesses with annuity income and this has caused a lot of movement in the industry,” said Foster.
“I would suggest that some early investor private equity funds will be looking for opportunities to realise their capital and I expect to see IPOs of some private equity-owned trust companies when something more profitable shows up.”
However, according to Foster, some clients are concerned that another wealthy individual might own the company which owns their assets creating conflicts of interest.
By contrast, in being a large bank, the current mood of uncertainty plays into RBC strengths: “We have big balance sheets and we are here for the long term,” says Foster.
