Barbados has been long regarded as a key financial centre in the Caribbean region. It has served as the hub of major financial activity over the last one hundred years or more, and is the regional headquarters for a number of international and regional financial services institutions including major banks. The island is a stable political democracy with a world-class infrastructure and direct air links to international financial centres. Its social progression has seen the development of a well-qualified professional workforce and fostered a well-developed business culture.

A rich tradition of life insurance and pension investments has promoted fund management at the institutional level with major insurance companies and pension managers developing asset allocation models to meet various investment mandates. This sound foundation has been enriched by the development of the international financial services sector and the attendant growth of skills to service this sector, particularly in the fields of accountancy and investment management. In this regard, the island has benefited from its extensive network of tax treaties and international reputation for good governance. The cross fertilization of skills as a result of the development of this sector has seen the evolution of a cadre of investment professionals, who have attained the highest level of qualifications such as the Chartered Financial Analyst designation and who provide services not only to this sector but to local financial institutions.

Companies leveraging the well-developed telecommunications infrastructure can benefit from real time trade execution and portfolio management, with access to the latest research. This global connectivity enables companies to maintain access to their client base while allowing a seamless workflow and reporting capability.

The rapid social and economic development seen in Barbados in the era following its Independence in 1966, and more recently, has seen the desire by the population for investment products and services. The establishment of the Barbados Stock Exchange in 1987 provided the catalyst for capital market transactions and though its remains relatively small in size, it has made a significant contribution through the enablement of equity market participation, fostering wealth creation and deepening the culture of investing. The amendment to the Income Tax Act in 1996, granting allowances for the investment in mutual funds, and the subsequent proclamation of the Mutual Funds Act and Regulations in 2002, facilitated the further emergence of a local investment sector. A number of major financial services companies such as Sagicor now offer suites of mutual funds for individual investors and pension schemes.

This industry, which now accounts for assets under management exceeding BDS$600 million, has further underpinned wealth creation and provided stimulus to capital market activity.

Private Wealth Management may be viewed as the next logical progression in the wealth accumulation cycle. As such, investors can move beyond more generic pooled investment vehicles to a more tailored approach in addressing specific investment needs. It generally entails an investment advisory approach that encompasses financial planning, portfolio management and other related financial services. This service may extend to the use of trusts and estate planning, and is a growing feature of the local investment landscape.

The increasing sophistication of local investors with diverse needs and the capacity to mobilize capital has precipitated the development of wealth management products and services in Barbados. The island is also home to formerly overseas-based nationals and expatriate residents who require services similar to those in the international markets. The mobilization of integrated platforms has also made it possible for financial services companies to efficiently manage personal, business and investment transactions and provide clients with a comprehensive assessment of their wealth position. This in turn provides a seamless interaction of portfolio characteristics, delivering to the client a managed solution in line with the portfolio objectives and constraints.

Financial services institutions have taken the lead in the development of value added products to provide solutions in the areas of liquidity management, portfolio management and real estate and business transaction facilitation. Liquidity management solutions include time deposits, money market funds and repurchase agreements that offer a competitive alternative to traditional savings products. Portfolio management solutions include investment in fixed income securities, stocks and private investments. Real estate and business transactions are accommodated through specialists with in-depth local expertise and an appreciation of the needs of the international investor. The level of international diversification achieved varies among offshore and onshore investors, as the island is a regulated foreign exchange jurisdiction.

Today’s global environment requires institutions with a strong capital base, good management and appropriate risk controls. The island with its sound legislative framework and reputation as a well-regulated jurisdiction provide investors with a secure environment to realize the value of their wealth management services. The enacted securities legislation under the purview of the Financial Services Commission solidifies this framework. Barbados remains a premier locale for investment facilitation and with a culture of innovation remains poised to further capitalize on its reputation as a major regional financial centre.

About the Author

Dexter Moe
Dexter Moe -

Vice President, Investment Management Services, Sagicor Asset Management Inc.