For wealthy global families, the past year has only confirmed the greater complexity of the world we currently live in. Geopolitical tensions have intensified, central banks have raised interest rates to contain resurgent inflation and asset prices have corrected. Our Family Barometer is our authoritative annual survey that monitors the shifting opinions of financial services experts who work with and advise wealthy clients. For the 2023 edition, we canvassed more than 1,500 internal and external experts from Europe, Asia, the Middle East, Africa, and the Americas.
For the first time, our Family Barometer also provides fascinating regional insights, as well as global, into the minds of wealthy families. For example, our survey found that families in the Middle East & Africa are focusing on data privacy more than those in other regions, and families in the Americas are placing more importance on real estate investments than those elsewhere in the world.
2023’s top five discussion topics
Experts participating in this year’s survey reveal that families are primarily interested in discussing wealth-related matters beyond investments. These include the structuring of their assets and wealth, as well as establishing collaborations with advisors. While this is much the same as last year, when taken together with the greater emphasis on tax and regulation, and political stability, it’s evident that families are seeking to work more with trusted experts to organise their wealth and plan family governance.
From our third edition, here’s an overview of what the experts had to say about their top five topics beyond investment, ranked in order of importance:
1. Family wealth-related topics beyond investments and collaboration with advisors is a topic as old as time. As families become more global, their affairs naturally grow more complex. Geopolitics have also made constant challenges a normal state of affairs. As a result, wealthy families need more specialist advice, not only to cater for complexity, but also to manage inherent risks raised by exposure to a multitude of legislations. Our report found that families in Europe and Asia reported the highest interest in discussing family wealth-related topics with advisors.
You can explore five steps to simplifiying complexity here, from our Head of Wealth Planning International, Marco Sella-Rolando, and for even more insights on our findings, download our report.
2. Taxes and regulation is the second highest ranked topic, rising from fourth in 2022. Ongoing political instability and pressure on public-sector finances mean that changes to tax and regulation are likely to continue. Yet these adjustments require an understanding of fine details in each country, making local specialist expertise essential. We found that the topic of taxes and regulation featured strongly in discussions with families in the Americas, compared to other regions.
Further information on this topic, as well as more regional insights, is available inside our Family Barometer.
3. Family governance is a perennial topic that has become more important as wealthy families have expanded to span several generations. After one generation has expended a tremendous effort accumulating wealth, good governance helps to preserve its legacy through the generations. Good communication regarding a family’s constitution, shared values, education, succession and even purpose, can translate into good governance.
In the Middle East & Africa, our survey discovered that the most discussed topic within wealthy families, beyond investments, was family governance. Explore how families and experts are achieving good governance in our full findings.
4. Political stability is the fourth highest ranked topic for discussion this year on a global basis, a little higher than its position of fifth in 2022. Notably, it ranks highest in the Americas, where it’s second to taxes and regulations, and in Asia, where it ranks third. The results show that wealthy families are taking political stability and geopolitics into account far more than before, not just in their investment decisions but also in how they structure their overall wealth. Explore this topic further in our Family Barometer.
5. Philanthropy retains its place as the fifth most discussed topic, as it was in 2022. Talking about how philanthropy aligns with family values can foster cohesion between an extended international family’s different branches and generations. What’s more, involving the next generation of a family at a young age can instill pride, responsibility and identification with the family values.
Our findings showed that families in Asia had placed the strongest importance on philanthropy, relative to those in other regions. Read more about how wealthy families are integrating this into their overall wealth considerations in our report.
What does all of this mean for the future of family wealth?
What the 2023 survey confirms is that global families, once again, face a less predictable world, where greater instability appears to be normal and ‘black swan’ events have a habit of materialising on a regular basis. It’s a more difficult world for preserving legacies, as well as the family’s wealth and purpose.
That makes careful long-term planning and structuring more important than ever. Achieving this is not just a one-off exercise but an ongoing journey involving the whole family. Yet, if properly addressed, this journey can be one that provides many opportunities and can even act as a driver for cohesion within a family. So, while there can be much to lose, there is a lot that can be won, too.