The first index to gauge the world's most popular financial centres for the mobile wealthy has placed the Isle of Man within its Top Ten.
The Mobile Wealthy Residency Index (MWRI) is the result of research by Scorpio Partnership, a business strategy advisor to the wealth management industry, with input from leading figures in the mobile wealth advisory community.
The findings have shown that the mobile wealthy are basing their choice of jurisdiction on a far wider range of factors than simply tax rates: Switzerland claimed the top spot - ahead of London, Singapore, New York and Hong Kong - due to its 'rounded offer'.
The Index is based on the eleven principal criteria used by the mobile wealthy when deciding where to reside. The findings have disproved the notion that fiscal incentives are the be-all and end-all of the selection process. In fact, Switzerland receives an average ranking for the criterion of Fiscal Considerations whereas Monaco, ranked top for Fiscal Considerations, but only ranks third bottom overall.
The full list of criteria is as follows: 1. Economic and political stability; 2. Employment and business opportunities; 3. Tax and immigration; 4. Legal considerations; 5. Depth of the financial services sector; 6. Availability of quality housing; 7. Proximity and convenience; 8. Education for children; 9. Security; 10. Concentration/critical mass of RNDs; and 11. Sophistication/culture/infrastructure.
In spite of various attacks on Switzerland from EU and US governments, the OECD and others, the country looks set to be the biggest beneficiary of any moves away from London. Nonetheless, the UK capital, placed second in this inaugural MWRI, retains an inherently strong position and undoubtedly remains the dominant centre for the mobile wealthy community at all levels.
What is clear, however, is that its second placing is largely due to the damage done by recent regulatory and fiscal changes impacting on the mobile wealthy. 'The Government’s stance has engendered a sense of mistrust and uncertainty among the mobile wealthy and their advisors.
'They definitely feel undervalued and over-scrutinised in the current environment,' said Sebastian Dovey, Managing Partner. This is reflected in London scoring poorly for the fiscal considerations and immigration in this index.
Singapore's third placing reflects positively on the City’s growth plans. Spurred on by the experience of the Asian financial crisis, it has done much to make itself attractive to the High Net Worth community. Singapore is viewed by the mobile wealthy as the hub from which to do business in and throughout Asia, and the Government has moved to make its fiscal environment attractive in the international environment.
A clear distinction has been shown between the large global centres and 'niche' jurisdictions such as the Isle of Man, Channel Islands, Cayman and Monaco.
While these centres yield strong opportunities for the wealthy community, they have a challenge to compete with the larger centres, where a higher concentration of other mobile wealthy residents with the same expectations and demands can already be found.
The Isle of Man, ranked 8th overall, scored highest for Housing (2nd) and Convenience (4th); it also scored well (6th) in four more categories: Economic and Political Stability; Employment and Business Opportunities; Tax and Immigration; and Legal Considerations.
Alistair Audsley, co-ordinator of the Isle of Man’s Freedom to Flourish strategy, comments ‘Through our work on Freedom to Flourish, we’ve been aware for some time that low tax is not the real driver when choosing a residential jurisdiction.
'Quality of life is seen as a ‘soft benefit’ but it has 'hard' implications in the sense that it is instrumental in people’s decision-making process’.
Mr Audsley believes that ‘the Isle of Man needs to work a lot harder on its cosmopolitan aspect of life’; that is to say, the Island has rational benefits but falls down on the sophistication of its cultural and lifestyle offerings.
However, he concludes, ‘the findings of the Index give us a good idea of where we need to work at being competitive in future’.
About the Mobile Wealthy Residency Index (MWRI)
The MWRI is a ranking of the centres consistently described by the mobile as the most attractive locations in which to live and work.
The Scorpio team examined each across 11 criteria of competitiveness identified by the mobile wealthy as key drivers in their decision-making process. Each jurisdiction was then scored through a combination of qualitative and quantitative measures.
In measuring the relative attractiveness of the locations the report is inevitably aspirational rather than actual. Crucially, however, and particularly in the current environment, this study gives a valuable insight into where the mobile wealthy may be considering moving to next.
