FOREWORD | OUR RESEARCH | 2020 AND COVID-19 | 1. TRANSPARENCY | 2. RELOCATION | 3. FAMILY & GENERATIONAL WEALTH | 4. THE ADVISER OF THE FUTURE | ABOUT BDO
2020 AND COVID-19 (01) | 2020 AND COVID-19 (02)
DISRUPTION AND DECISION-MAKING 2020 AND COVID-19
WHAT DO YOU EXPECT HNWI PRIORITIES TO BE OVER THE COMING 12 TO 18 MONTHS? (RESPONDENTS WERE ASKED TO SELECT UP TO THREE ANSWERS ON CERTAIN SURVEY QUESTIONS. AS A RESULT, PERCENTAGES DO NOT SUM TO 100 ON ALL GRAPHICS IN THIS REPORT.) GRAPHIC 2:
GRAPHIC 3:
These findings reveal two competing strategies: on the one hand wealth owners are actively looking for the positive growth opportunities that may emerge from uncertainty, while others are choosing a more defensive strategy, focused on de-risking and diversifying to protect existing assets. Succession planning also scored highly, likely as a combined result of incumbent wealth owners being more aware of their own mortality, along with the time that lockdown has afforded people to address administrative details around legacy and succession. Some of us have spent far more time with our close families during 2020 than expected, and some of us have been separated by extensive distance and differing time zones. Have HNWIs also faced the same challenges and has this affected their planning in any way? It is clear that there is no one road to follow, and individual circumstance rules, but four broad areas of focus emerge and our research explores the nuance of these dominant themes through those lenses: Transparency, Relocation, Generational Wealth and The Adviser of the Future.
WHICHOF THE FOLLOWING ASPECTS OF COVID-19 AND THE LOCKDOWN RECESSION ARE CAUSING THE GREATEST CONCERN FOR HNWIS ANDWEALTH PLANNERS? PLEASE SELECT A MAXIMUM OF THREE ANSWERS.
67%
‘OTHER’ TOP PRIORITIES INCLUDE:
cooling economic and investment climate
X Documenting key business processes X Further tax mitigation pending increases in tax rates X safe place to hole up if it happens again X efficient structuring X Maintaining sufficient liquidity to deal with threats and opportunities X Managing explosive growth
X none of the above X keep calm and carry on X Tax Residency X Overall Risk Management X managing private businesses risks and opportunities X BDO testing questions X Any of the above depending on individual circumstances
63%
53%
prospect of increasing tax burdens
57%
46%
asset protection/ security of cash assets
48%
current (and longer term) travel restrictions
44%
26%
supply chain disruption
22%
23%
prolonging uncertainty around global real estate markets reputational risk from heightened public and media scrutiny of hnwis
21%
14%
14%
6%
5%
10%
de-risking portfolios / mitigating against disruptions
seeking new growth / investment opportunities
ensuring continued regulatory compliance
succession planning
educating the next generation onwealth management
safeguarding reputation and privacy, including against cyber and physical threats
legacy and / or philanthropic efforts (in general)
legacy and / or philanthropic efforts specific to covid-19 and its aftermath
other
other
3%
OTHERS INCLUDE:
X Uncertainty X Managing explosive growth X Impact on business assets
X Global conflict and increased protectionism X Uncertainty
WORLD OF PRIVATE CLIENTS | NOVEMBER 2020 7
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