bring costs down, said an investment firm president.

"Bermuda is perceived as probably the highest quality offshore financial services centre in the world. The downside is that Bermuda is considered to be expensive and not as flexible in its policies as other offshore centres,'' said Mr. Arthur Sculley, head of Sculley Brothers LLC, a New York-based private company.

"Bermuda is pretty much universally recognised as being expensive.'' The Island has been able to escape criticism about cost because the investment community abroad sees the Island as firmly grounded, mature, and free of the scandals found in many other offshore centres, he said.

But costs must come down or Bermuda risks losing out to competitors, he said.

There are at least 14 other centres, among them Cayman and Dublin, which compete with Bermuda, said Mr. Sculley, speaking at a Chartered Accountants of Bermuda Institute luncheon yesterday at the Hamilton Princess.

"All of these centres in one way or another want Bermuda's business. Many have very well defined strategies to go after and get the existing business.'' Mr. Sculley, the son of a Bermudian, based his conclusions about Bermuda on observations made during his international work for J.P. Morgan.

Mr. Sculley retired from J.P. Morgan in February after spending 25 years on a number of international assignments.

"I would often do some discreet, informal market research on Bermuda as an offshore investment services centre,'' he said.

The Island's advantages include; an established infrastructure, excellent accounting services as well as good legal climate, trust services and administrative and management services.

Other advantages, said Mr. Sculley, are location, a responsive regulatory environment and economic and political stability. The "macro'' trends which will impact Bermuda are; globalisation, organisations with partners spread around the world, telecommunications advances, and information technology.

Mr. Sculley was head of J.P. Morgan's worldwide private banking division and a member of senior management with responsibility for J.P. Morgan's trust, investment management, mutual funds, brokerage and banking services, for its private global clients.

He also spent eight years in Hong Kong and Singapore setting up offices, was head of the Middle East department, and worked in London.

He joined brothers Mr. John Sculley, former chairman of Apple Computer Company, and Mr. David Sculley, senior vice president of HJ Heinz Company, to form Sculley Brothers earlier this year.

Mr. Sculley, the son of a Bermudian, is a US citizen and spent his childhood summers in Bermuda.

One of Mr. Sculley's first visits to the Island was as a passenger on the 1940s aboard the Queen of Bermuda .

He graduated from the University of Pennsylvania's Wharton School in 1967 and recently served on the Bermuda Government's Telecommunications Task Force.