The Future View of International Wealth

On 5 February, over 100 advisors to HNWIs came to Mishcon de Reya for our first ‘Future View of International Wealth’ event in collaboration with Spears Wealth Management. This was a panel discussion, which addressed the key trends and issues in the world of International Wealth and considered how the wealth landscape is evolving in London. The audience included private bankers, members of family offices, fiduciary professionals and accountants.

The panel was chaired by Ben Elliot, Founding Director of Quintessentially, the luxury lifestyle management and concierge business. On the panel were: William Cash, Founder and Editor in Chief at Spears; Amy Clarke, Head of Private Clients, Charities Aid Foundation; Sandra Davis, Partner and Head of Family, Mishcon de Reya; Rupert Phelps, Director of Family Office Services, Savills; and Khaled Said, Managing Partner, Capital Generation Partners.

According to Khaled Said, the wealth landscape is subject to the actions of the HNWIs that inhabit it. “It is their prerogative to select where they want to live and to choose a society that they enjoy, but it is also their responsibility to be open to scrutiny, to be willing to integrate and to be taxed.” At a basic level, this defines and will continue to define international wealth and how it is distributed.

Rupert Phelps of Savills argued that lawfully accumulated private capital is a valuable asset. However, he also conceded that wealth preservation can be either beneficial or toxic depending on how it is handled. Rupert stressed the need to focus on the next generation and the importance of family dynamics: “it’s critical to retain family values and what they stand for if the wealth is to be retained.”

London was at the centre of the discussion, as Ben Elliot labelled it “a citadel for the world’s richest“. But even a city such as this cannot afford to rest on its laurels.

Mishcon de Reya’s Sandra Davis acknowledged the impact of London as the ‘Litigation capital of the world’ on national wealth. “The British Legal System is a draw for many: judges cannot be bribed; the courts are public; legal services are moderately priced; judgments are enforceable overseas; and the system notoriously allows females to participate in what was accrued during their marriage in divorce cases, resulting in the rise of ‘divorce tourism’ in recent years”.  William Cash supported this sentiment and also drew attention to other aspects of London’s sophisticated culture, including access to prestigious public schools and superior banking facilities, asserting that “people come to London for its intellectual and social currency.

Amy Clarke of Charities Aid Foundation branded London as a vibrant marketplace, with philanthropy and human investment becoming increasingly prevalent, as the purpose of wealth is redefined as a fuel for good. “Those under 40, known as ‘next-geners’, are paving the way in this shift as they try to establish their place in the system. This generation is equipped to take action as they have been surrounded by news of social and financial inequality. Consequently, a lot of these youngsters are entrepreneurial and the businesses they choose to set up are socially purposed. Roughly speaking, two thirds of graduates in the UK want to work for an organisation that has a demonstrable track record of social responsibility“. The challenge for the future, Amy felt, is that next-geners will want to be in London, but they will be priced out, so the challenge will lie in how we can keep them here – or welcome them back in. Khaled Said has also witnessed the impact of the next-geners’ mentality on the investment advisory business, with the need to align the views of different generations when transitioning wealth.

Rupert Phelps added that philanthropy is increasingly being seen as a necessity by many wealthy families, helping to insulate against entitlement and keep families together. Amy agreed – “parents are concerned about how children will handle wealth and are keen to educate them on the worth and purpose of money“.

As the wealth landscape evolves both nationally and internationally, it will be interesting to see how wealth is transitioned between these differing generations and how effectively it is retained. If the next-geners using wealth as a ‘fuel for good’ is just the beginning, we could be looking at a very different distribution of international wealth in the generations that follow.

To watch a video from the event click here.