Julius Baer’s newly minted family barometer published in collaboration with PWC Switzerland shows that unpredictability, instability and black swan events are the watchwords. It surveys around 1,500 high-net-worth family clients to assess their opinions on the pertinent issues of the day.
With around US$117.5 billion of assets under management, Julius Baer has become even more important in the Swiss wealth management ecosystem following the demise of Credit Suisse. So their views, and those of their clients, carry even more weight than before.
Globally, the top concern in the survey is geopolitical diversification, cited by 22% of respondents. “Taxes and regulation along with political stability are discussed more often,” the barometer says. Furthermore, it notes that the tax and regulation concern is very much part and parcel with concern over political stability and pressure on public finances.
Concern over political instability per se seem to be highest in the Americas and Asia. “The wealthy families in these regions appear concerned about political instability within countries, typified by political polarisation and rising nationalism,” the barometer says. It notes that the wealthy are “refraining from investing in places where they believe the geopolitical situation might lead to added complexity or, at worst, a loss of assets”.
In Asia, the survey found that high-net-worth families placed the greatest importance on philanthropy versus other topics, which may relate to stronger societal bonds and more recognition that the wealthy depend on the social fabric like everyone else.
And just to upset a commonly held belief, it appears that Asian families are less interested in real estate investment than any other region. Asian families also tend to invest with a bigger ticket size than their Western peers, starting their first investment at around $1 million to $2 million.
Like everyone else, rich people are looking at a lot more geopolitical and policy risk.
According to the barometer, “simplifying today’s complexity often requires international expertise from trusted advisers”. The wealth management industry will no doubt be pleased with this assessment.
The rest of us will probably be concerned that those complexities relate increasingly to geopolitical tension and political instability. That’s not necessarily a comforting environment for the wealthy, or for anyone else, to live in.
