The research, conducted over the course of the UK lockdown, assessed the impact of COVID-19 across several areas that determine the long-term sustainability of family wealth. Stonehage Fleming surveyed respondents on themes including the purpose of wealth, the identification and management of risk, succession planning and the next generation, investment attitudes and philanthropy.
Stonehage Fleming found that 40% of respondents do not have a process for identifying, quantifying and mitigating the many and varied risks a family may face.
In addition, the survey showed that family disputes are still considered to be the greatest risk to long term family wealth (34%), followed by lack of future family leadership and direction (32%).
Chris Merry, Chief Executive Officer at Stonehage Fleming said: “We have seen some subtle shifts in the philosophies and practices of the families we support as they reflect on the impact of Covid-19 on their communities and the wider society. This global health crisis has reinforced the need to formalise risk management processes, pay careful attention to leadership matters, and educate and engage the next generation. These actions will all help guide families through future challenges.”
Matthew Fleming, Partner, Head of Family Governance & Succession, at Stonehage Fleming said: “Our survey found that over a third of our participants think that there will be a permanent shift in the key priorities of their families as a direct consequence of the pandemic. Such shifts can also lead to beneficial discussions on the overall purpose of the family wealth, and we are pleased to see more families considering putting this into place.”
Almost a quarter of respondents identified failure to engage the next generation as a key risk. 25% stated that there had been changes to roles and responsibilities within the family, with the majority (71%) of this group stating the members of the next generation were playing a more prominent role.
Matthew Fleming adds: “The survey has again emphasised the importance of family leadership and provided overwhelming evidence of how important a role the next generation have played in this during the crisis.”
UHNW FAMILIES ARE DONATING MORE TO CHARITY, BUT still prefer to remain discreet
As a result of COVID-19, just under a third of respondents are actively contributing more to the community and wider society, with 57% having supported projects or causes related to helping combat the pandemic or supporting those most affected by it.
Despite the increased focus on how families and businesses are contributing to their communities and society, 79% of respondents still prefer to remain discreet.
Guy Hudson, Partner and Head of Marketing at Stonehage Fleming said: “Families have increased their philanthropic commitments as a result of the crisis, with many supporting causes directly addressing the effects of the pandemic. Their preference for discretion does mean that the extent of their societal contribution is however not always recognised.”
This paper was drawn from a 42-question survey, completed by some 183 contributors from families and advisers across all jurisdictions. The survey was distributed mid-May 2020 and the survey closed mid-July 2020.