The World in 2043
EXECUTIVE SUMMARY
With as much as £5 trillion expected to be passed down to the next generation in the UK alone, helping our clients successfully navigate the next 30 years is our primary focus. Our paper, The World in 2043, sets out to harness the collective wisdom of our network, clients, advisers and the team here at FF&P to aid us on that journey.
Our proprietary research comprised a survey, interviews and discussion events with 90 Ultra High Net Worths and advisers, collectively representing over £100 billion of net assets. The principal findings were:
- 71% of respondents identified real capital preservation as their greatest challenge.
- Six threats to wealth were consistently named: Lack of strategic planning, Fragmentation on inheritance, Excessive risk taking, Dispute and family breakdown, Inflation, Taxation
- Family constitutions, trusts and family limited partnerships are increasingly essential to address many of these threats.
- 46% of respondents chose 10 years plus as the most suitable investment horizon for wealthy families; a further 21% chose 30 years plus; SUMMARYand 69% named inflation as the most appropriate benchmark.
- Despite many of our respondents anticipating a recurrence of a major financial crisis within the next decade, a significant majority selected equities, led by today’s emerging markets, as one of the few sources of real returns and the likely best performing asset class to 2043.
- Cash and government bonds were nominated by a significant majority of our survey as likely to be among the worst performing asset classes over the next 30 years.
- Two common themes from the survey were diversification and the search for growth in a low yield environment. In this context, real estate was considered the most suitable alternative asset class.
- There was confidence in the Euro’s survival, 63% expecting it to endure beyond 2043, albeit with caveats; and 80% believe that the US Dollar will remain the global reserve currency in 30 years, notwithstanding the US’s anticipated loss of economic pre-eminence to China.
- London is expected to remain a leading financial centre for wealthy families, with 93% of the sample believing that it will continue to be one of the top three globally in 2043.
We are extremely grateful to all contributors to this paper for the time and insight they have given us.