The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Nassau-headquartered provider that supervises $1.5 billion in client assets yesterday expressed optimism that Executives Entities could become “the second most used product” from the Bahamian financial services menu, having already beaten its own pre-Christmas expectations.

Andrew Law, chief executive of International Protector Group (IPG), told Tribune Business the company had incorporated the first three Executive Entities to exist worldwide since this nation unveiled the product five months ago.

Disclosing that IPG had submitted another Executive Entity to the Bahamas’ Companies Registry today, with another “in the pipeline” set to bring the total to five, Mr Law said demand to-date had exceeded his expectations.

“I have to confess I didn’t think we’d do one before Christmas,” Mr Law told Tribune Business. “I am secretly very pleased that we ended up getting registrations one, two and three.”

Anticipating that the continued roll-out/promotion of Executive Entities by IPG and other Bahamian financial services providers will get “a very positive reception”, Mr Law said feedback he had received indicated a number of potential clients had not wanted to be the ‘first mover’.

But, with three Bahamian Executive Entities now established and functioning, he suggested their interest was likely to be renewed.

“I don’t think it will become an IBC [International Business Company], but it will become much more than a foundation or a partnership,”Mr Law told Tribune Business, when asked how popular Executive Entities could become.

“On the [Companies] Registry, it could easily be the second most-used product. I’d love it to become number one, but that’s unrealistic. It will become number two, and that will be an achievable objective.”

The first three Bahamian Executive Entities established by IPG are for client trusts in locations such as Latin America, the US and the UK.

One had been established to own a private trust company; another to act as a protector; one to own shares in an investment company; and another to own management shares in a mutual fund.

The wide range of uses showed how flexible the Executive Entity was, Mr Law said, adding that by creating the product the Bahamas was differentiating itself from rivals and holding itself out as an innovator.

As an incorporated power holder with “unlimited life”, Mr Law said the Executive Entity could be inserted into multiple wealth management structures to eliminate the ‘human element’ - key persons dying, being declared bankrupt or living in the wrong jurisdictions.

In their simplest form, Executive Entities are designed to act as the power holder in fiduciary and wealth planning structures, resolving governance issues and giving clients greater control and security over management of their wealth.

Mr Law told Tribune Business that the Executive Entity could also help attract other products and wealth management structures to the Bahamas.

If a client wanted to establish a private trust company, and have an Executive Entity own it, then the Bahamas - as the only nation with the latter product - was the perfect nation in which to set-up both entities.

“It will bring other business. I think that is the knock-on effect,” Mr Law said. “It just shows the broad appeal.”

While he and IPG were planning to return to London and Switzerland for further Executive Entity promotions, Mr Law said they were also set to target Florida next month. Key intermediaries advising high net worth Latin American clients are based there.

“It once again puts us on the radar as people think of us as being innovative and finding solutions,” Mr Law said of the Executive Entity’s impact on the Bahamas as a jurisdiction.

“I’m sure other jurisdictions will look at it as well and see if they will enact copycat legislation. The Bahamas, for a short amount of time, has a competitive advantage, but it also says something about how we’re serious about the financial services industry.

“It’s the innovative side that is the difference. Even at the end of the day, if someone else perceives this to be pretty good and copies it, that’s an endorsement of the Bahamas.”

Mr Law said he had heard that a major London law firm, during a recent seminar in the UK, had specifically mentioned the Bahamas Executive Entity as a solution to one of the private client structures they were looking at.

This, he added, suggested that the law firm must have already done its research on the product and created a file note for its private client group.