The Guernsey Financial Services Commission recently introduced a simplified route for licensed fiduciaries to act as designated administrators of Family Private Investment Funds without the need to apply for a full licence under the Protection of Investors (Bailiwick of Guernsey) Law, 2020. The simplified route provides new business opportunities for trust companies and some family offices to offer a new scope of services and overall enhances the attraction for the use of a Family PIF by high net worth families.
Earlier this year the Private Investment Fund (PIF) regime underwent a significant update, expanding the investor eligibility criteria, lifting the limit on maximum number of investors and rationalising the compliance requirements. Learn more about the benefits of the new PIF regime: Guernsey Private Investment Funds: 2025 updates
What is a Family PIF?
Within the broader PIF umbrella, the Family PIF is a registered fund tailored for generational and familial wealth management. It enables investors with a familial connection to pool their investments within a lighter touch regulatory regime.
Key characteristics include:
- all investors must share a family relationship, or be an eligible employee of the family
- cannot be marketed outside the family group
Who can act as a designated administrator of a Family PIF?
All PIFs, including Family PIFs, are required to appoint a designated administrator. As is the case for every administrator of a Guernsey fund, the designated administrator of a PIF is required to hold a category one controlled investment business licence under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 (the POI Law). Such licensees will still be able to act as designated administrators of PIFs.
How can fiduciaries become designated administrators of Family PIFs?
Primary licensees under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2020 (as amended) (the Fid Law) can apply to the Guernsey Financial Services Commission (GFSC) to obtain a "limited" licence under the POI Law. This licence is not limited in terms of the restricted activities that the licensee may carry on under the POI Law, but rather in terms of the condition placed on the licence that the licensee may only undertake those activities associated with acting as designated administrator of one or more Family PIFs.
What are the key differences between the "limited" and "full" POI Law licences?
| Key differences | “Limited” POI Law licence | "Full" POI Law licence |
|---|---|---|
| Eligibility | Available to primary licensees under the Fid Law | Not required to hold any other licence |
| Annual fee | £1,000 | £2,290 |
| One-off application fee | £3,200 | £3,200 |
| Activities | Carry on one or more restricted activities in respect of one or more Family PIFs only | Carry on one or more restricted activities in respect of all types of collective investment schemes |
| Designated administrator | Licence restricted to acting as designated administrator of a Family PIF | Can act as designated administrator of all types of funds including Qualifying PIFs and Family PIFs |
| Ongoing compliance | Ongoing compliance requirements, including capital adequacy requirements, may be waived or modified as appropriate for this type of licence | Subject to standard AML, conduct of business and capital adequacy requirements |
How can the “limited” licence benefit fiduciaries and their clients?
The new "limited" licence will be subject to a reduced annual fee compared to the full POI Law licence, making it a practical and cost effective option for Fid Law licensees which do not intend on undertaking any other restricted activities within the scope of the POI Law to assist their clients with the establishment and administration of family investment structures.
For those service providers who are currently regulated under the Fid Law but not under the POI Law, it has not been possible to date for the same service provider to provide fiduciary and investment services to the same clients. However, under the new regime, clients will benefit from the expansion of the services that can be provided to them, allowing them to maintain trusted, long-term relationships with providers who know and understand the families' needs.
The streamlined Family PIF regime is both a welcome route for diversification of business services for certain fiduciary service providers while remaining a well-governed and professional offering for families who wish to take advantage of what a Private Investment Fund can provide. This option does not, of course, affect those businesses seeking a full POI Law licence, which remains available to those service providers wishing to expand their fund offering beyond the Family PIF.
Why are Guernsey Family PIFs attractive for high net worth families?
High net worth families and their family offices will often seek bespoke, flexible, efficient and well recognised structures alongside a desire to diversify and grow investments. A Family PIF can provide a vehicle allowing for quick speed to market, cost efficiency and flexibility but within a recognised regulatory regime.
The Family PIF can provide a tailored investment strategy with access to opportunities and sectors not provided for with other investment arrangements, which is attractive to high net worth families and their family offices who want bespoke solutions which align with their values and goals. It can be a flexible option for the here and now, as well as for intergenerational wealth transfers, allowing for family involvement as appropriate in line with the regime and with family governance.
The regime has been designed to ensure confidence in governance and compliance, while allowing families and those with whom they have trusted family relationships to structure their investments in a manner aligned with their long-term goals, succession planning and bespoke investment strategies.
What are the next steps for Fid Law licensees and their clients?
Our Investment Funds team in Guernsey advise on the full spectrum of fund structures and licences available and can support service providers through the GFSC application process.
Our Investment Funds team works closely with our market leading Private Wealth team to advise both service providers and high net worth families on Family PIFs as well as the full range of wealth structuring and succession vehicles available in Guernsey.
If you are a fiduciary licensee interested in exploring the new PIF regime or a potential investor or family looking to consolidate and grow family wealth, contact our experts to find out more.
