Themes and changes: Citywealth’s Review of 2021
“Another year over, a new one just begun”, as the song goes. Here’s Citywealth’s review of 2021.
COVID-19 aside, there were many positives for the private wealth industry in 2021. The rich became richer, flows of assets into ESG were higher than ever, and there were new opportunities for advisors from the likes of tech entrepreneurs and crypto natives who having made their millions turned to the private wealth community for advice on planning and succession. For those searching for a Wealth Management Advisor, check out our Top 100 ranking.
The attractiveness of ESG to investors hit new highs in 2021, with ESG assets on track to exceed $50 trillion by 2025, however greenwashing remains an issue as our latest ESG update explores.
To demonstrate their commitment to ESG and sustainability, some organisations have become B Corp Certified, with many others are taking their first steps on this journey. As Anthesis’ CEO Stuart McLachlan said in our feature ESG Branding with B Corps?: “Being a B-Corp provides accountability”. We also spoke with Josh Matthews, co-founder of MASECO Private Wealth on their journey to becoming the first B Corp in the financial services sector in the UK to find out the challenges they faced, and how their journey has evolved. They have been joined on this journey by Coutts, which announced it had achieved B Corp status in July.
Interest in ESG by investors has also led to increased investments in the private markets by family offices looking to access these type of investments. In Family office tentacles dig into private market investments, we explored this growing trend and how it also acts as a bridge with investments and the next generation. As Guy Simonius, Head of Family Office Services at Julius Baer said, “Investing in a climate fund for example, can get youngsters talking about purpose, long-term values, risk and profit. It creates the opportunity to have conversations to educate the next generation on investment principles but it’s a lot easier to get the conversation flowing in the first instance”.
Succession planning continued to be a big discussion point for advisors and managers and their clients over 2021. Citywealth spoke to Rebecca Fisher, head of the family office group at Russell-Cooke to find out her top tips for families reaching a point of succession. Her advice was: “Do not be afraid to rely on your advisers to help navigate the issues and discussions. Many clients are surprised that these meetings are productive and introduce a sense of purpose and direction in terms of wealth transfer and to cement family relationships.”
We also looked at the complexities of succession in family business and uncovered some of the examples where the transfer of a family business has been handled well, and where it has gone wrong. As Hayden Bailey, a private client partner at law firm Boodle Hatfield said, “family businesses with experience of a generational transfer going wrong, are more naturally inclined to understand the value of help and advice. In my experience, where family members can identify past mistakes (often human ones), they appreciate the importance of investing real time and energy into the succession process.” While there is never a perfect time to begin, Bailey suggests: “it’s never too early to start developing the younger generations commercial awareness and knowledge of wealth, and to instil in them a sense of ‘shared purpose’ and legacy that defines the family’s approach”.
With the world still feeling the effects from the COVID-19 pandemic, UHNWs and families put their money to good use with philanthropic activities. However as we discussed in Philanthropy: attempting the impossible, philanthropy requires more than throwing money at a problem. It requires an evidence-based approach and it’s all about finding what works and driving that to scale. It was largely agreed that impact investing is the way forward for philanthropists where there is profit and purpose.
To help donors and potential donors find the right advisors, Citywealth curated the Top Recommended Philanthropic Advisors 2021 ranking. We asked those ranked to share their memorable moments and one that stood out from Emily Collins-Ellis, Managing Director at I.G. Advisors whose clients was responsible for funding the research that underpinned a pivotal policy moment in the COVID-19 response. For those inspired, Tom Hall, Head of Philanthropy Services at UBS said the best piece of advice for donors is simply to “get started”.
In our Top 100 Private Client Lawyers ranking, we uncovered some of the exceptional work of lawyers throughout the past 12 months. It became apparent through the submissions that to be a trusted advisor during 2021, lawyers needed to rely on their soft skills as much as their legal expertise. The top 100 is a collection of lawyers who demonstrated the humanistic element and skills pivotal to being a private client lawyer.
Lastly, we couldn’t complete any round-up of 2021 without touching on crypto which continued to rise and fall in price and gain the attention of UHNWs and family offices the world over. For beginners, CEO Karen Jones shared a handy overview. We also looked more closely at NFTs in NFT Mania: innovation frontier in light of the sale of Beeple’s ‘Everyday: The First 5000 Days’ which sold at Christie’s in March for $69million. With the rise of crypto investments, it was only time that the tax man became more interested and our Crypto taxes: payment in pounds, dollars or eth sir? Feature has everything you need to know to keep on the right side of the UK’s HMRC. Next year, we’ll be recognizing the Crypto 100 advisors and managers and hosting our first Crypto Club event. In addition we will be offering an accreditation badge to wealth managers, advisors and crypto natives who have filled out our research survey. The accreditation will be based on various metrics but in addition on connections that instil confidence across both industries. The object of the exercise is to create a clear pathway for both industries to conduct business with surety. Contact Calin Lapuste to find out more or fill in our survey for consideration of our accreditation in crypto https://citywealth.typeform.com/to/hujvi1RL
January will also see a Citywealth report with research from the industry on the way it dealt with covid 19 with UHNW clients globally particularly issues like adapting older adults to technology. To receive this report free of charge please fulfil the following: Follow us on LinkedIn; Instagram; Twitter and YouTube.
We’ll be back in January with the latest news and opinion in the private wealth sector, but in the meantime we wish you happy holidays.