Mike Parkinson TEP is the founding author and one of the principal tutors of the STEP Certificate and Diploma in International Trust Management pathway. As an offshore wealth manager, he has had an illustrious career spanning the globe which gives him fascinating insight into how the industry works and how students can make the most of their careers.
We sat down with him to discuss his career, his advice for today’s students, and the worst places to hire a car…
‘I qualified in the UK and the US, then worked for a smallish firm in the UK,’ he explains. ‘Then I transferred out to the Cayman Islands in 1985 – exchanging the comfort of North Yorkshire for Cayman, which was a pretty big step.’ Mike remained in the Cayman Islands with his family, working in private practice – ‘obviously, financial services generally, sometimes with a bit of litigation thrown in’ – until 1999.
On his return to the UK, Mike got a job with the College of Law, but before long he was headhunted by the International Trust Companies Association (ITCA), a precursor to STEP. Together with Bill Howarth, then-director of CLT, he set about building a comprehensive training programme for professionals working on international trusts.
While Bill began to liaise with STEP to administer the programme then known as the STEP Certificate and Diploma in International Trust Management, Mike wrote the manuals and delivered the training.
‘We thought it would last about four or five years, and then we’d have trained everyone in the industry!’ Mike says today, laughing. ‘We did about 15 courses that first year, and then in the second year… we booked something like 75 one-week courses – all in different parts of the globe.’
Far from fizzling out, the courses proved so much more popular than the pair had expected that they had to hire more tutors to deliver them all. ‘I couldn’t be everywhere at once!’
The momentum that began in the early years of the millennium – year-round courses offered wherever in the world there was a need for them, delivered by a team of tutors who work from Mike’s course texts – continues to this day, where the courses form a key cornerstone of the STEP Diploma and make up a recommended pathway for students specialising in international trust management.
Mike, meanwhile, is still extremely involved with the courses, both as a tutor and as an author. ‘By profession, I’m a lawyer still, and an educator,’ he says. He works half the time with STEP and the other half for FFP, a private trust company in the Cayman Islands. ‘It’s a multidisciplinary financial services firm,’ he explains of his practice work. ‘Insolvency, asset management, trusts, accountancy – you name it, we do it. I’m the lawyer for the investment experts.’
‘The smaller firm is centre of the offshore wealth management industry’
‘When I first started,’ he says, ‘most of the trustees were these enormous global financial conglomerates. Morgan Stanley, Merrill Lynch, American Express, HSBC – enormous banking organisations of which wealth management was just a small part. And, particularly since the financial crisis – since 2008 – they’ve offloaded a lot of the wealth management divisions, usually to management buyouts leveraged up by private equity firms. So in a way, it’s really gone back to how it used to be – the smaller firm is now centre of the wealth management industry in the offshore world. The business is still there, it’s just being conducted by less visible offshore firms – STEP members now will probably be employed by offshore firms, rather than banks.’
‘And then there’s the regulation. AML, CTF, FATCA, and CRS – the global FATCA lookalike. All of this is one reason why, in the offshore world, we’re trying to get rid of trusts of less than $5 million – even $10 million, to be honest, because it’s just not worth the hassle. Funds are being repatriated back onshore – simply because of the regulations, and the work that needs to be done to comply with the regulations.’
‘You’ve got to be a bit of a Jack-of-all-trades’
‘The assets that are held offshore are just phenomenal. They range from every type of asset class – stocks and shares, treasury bonds, private equity, hedge funds…real estate, the private jet, the super yacht, the football club’ – he pauses: ‘Hardly an investment, that, nowadays!’ – ‘All these assets, you have to cope with. As a trustee and as the head of the food chain, you can be encouraged to invest by the principal and the beneficiaries, but ultimately, the decision is yours. So you’ve got to know your onions.’
‘You’ve got to know your technical stuff. You’ve got to know about private company management and trust administration, and I think also about investments. You’ve got to be a bit of a Jack-of-all-trades. You can’t really manage wealth unless you’ve got a handle on the major asset classes.’
‘Beware of the traffic!’
Over the course of his career, Mike has worked in ‘all four corners of the world’, both with STEP and with his private practice. ‘What can I tell you?’ he muses. ‘In Hong Kong and Singapore, the hours of work tend to be nine til seven. And what happens after seven o’clock is, everyone goes out to eat. The professionals, the bankers, tend to go out to eat rather than cook at home – so the after work vibe is excellent. It’s a wonderful place to go.’
‘In Mauritius,’ he continues, ‘I was staying in a hotel on the east side of Port Louis, the capital. The course I was delivering was on the west side of Port Louis, maybe five or six miles away. So I got in a taxi from my hotel about 8am, ready for a 9am start … and I didn’t get to the venue until 11am! The whole of Port Louis was just a traffic jam. We were just travelling at walking pace.’ He’s laughing. ‘The next day, I got my taxi at 7am – and I still didn’t get there til 11am!’
The third day dawned, and with only one more day of teaching to go, Mike was more determined than ever to be there on time. ‘I booked a taxi for 5am,’ he says. ‘…And I got to the venue at five past five!’ His tip? ‘If you ever go to Port Louis – beware of the traffic!’
(In fact, years of working abroad have given Mike an encyclopaedic knowledge of the best way to traverse most places. ‘Don’t get a scooter in Bermuda,’ he warns, ‘some of the accidents are horrendous. And don’t hire a car in Turks and Caicos. There are some pretty bad accidents in Cayman too, mostly from tourists who aren’t familiar with driving on the left.’)
‘But the nicest place in the world,’ he says, ‘must be Switzerland. It is gorgeous. Geneva, Zurich, Bern… and Liechtenstein, too. The cost of living is brutal – everything is expensive – but these are absolutely lovely places.’
‘Wealth managers are mobile’
‘I think the work is much the same the world over,’ he adds. ‘It’s looking after other people’s money, and you can look after other people’s money in London, or you can do it in Singapore, or in the Cayman Islands – it’s much the same. Managing an offshore company, whether it’s incorporated in the Marshall Islands or the British Virgin Islands, it doesn’t really matter that much – you still have to look at the memorandum and the articles. And managing a trust – the trust could be governed by the laws of Jersey, or Guernsey, or the Bahamas – you know you still have to look at the trust instrument.’
‘The thing is, the wealth itself is mobile – it can go anywhere. So wealth managers are mobile as well. If you want to work overseas – get into the wealth management industry! All of these major offshore financial centres are always recruiting. If you want to experience alternative cultures, then this is the business for you.’