KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL

FANews
FANews
RELATED CATEGORIES
SUB CATEGORIES Short term |  Life |  Legal |  Employee Benefits |  General |  Technology |  Investments / Economy |  Healthcare | 

Wealthy families support the fight against COVID-19

07 October 2020 Stonehage Fleming South Africa
Johan van Zyl, Chairman of Stonehage Fleming South Africa

Johan van Zyl, Chairman of Stonehage Fleming South Africa

New research from international family office Stonehage Fleming has revealed that the COVID-19 pandemic is leading to a significant shift in the key priorities of many wealthy families.

This finding and others is contained in Stonehage Fleming’s report, ‘Four Pillars of Capital: a time for reflection.’

The research surveyed 183 multigenerational members of different families and their advisers on key themes that determine the sustainability of long-term family wealth. These themes are the purpose of wealth, the identification and management of risk, succession and the next generation, investment attitudes and philanthropy.

As a result of the COVID-19 pandemic, just under a third of the respondents said they are actively contributing more to the community and wider society, with 57% having supported causes or projects related to helping combat the pandemic or supporting those most affected by it.

“However, they prefer to remain discreet about their philanthropy despite the increased focus on how families and businesses are contributing to their communities and society during the crisis,” said Johan van Zyl, Chairman of Stonehage Fleming South Africa.

Also as a result of the pandemic, 25% of respondents said there have been changes in the roles and responsibilities in their family, with 72% of these saying that members of the next generation are playing more prominent roles and more responsibilities are being shared. In fact, 69% said that the next generation had proved important in helping their family navigate the crisis, particularly as stay at home orders by governments had increased families’ use of technology.

“This increased appreciation of younger family members and their contribution to their respective family’s intellectual, social and cultural capital during the pandemic has caused the re-evaluation of priorities for many families. This includes a renewed focus on defining a purpose for their wealth,” van Zyl said. “Even before the pandemic there was a growing trend for wealthy families to discuss and agree the purpose of their wealth. Millennial members of wealthy families are particularly interested in feeling a sense of purpose and meaning in their lives and, as such, are helping to drive this trend.”

The survey found that 52% of respondents already have an agreed purpose for their wealth while, due to the COVID-19 pandemic, 44% who don’t have an agreed purpose of wealth have started thinking about this more.
Family disputes or break ups remain the greatest risk to long-term family wealth, with lack of future family leadership and direction being the second greatest risk, and failure to engage the next generation the third greatest risk.

“Not surprisingly, the crisis has given wealthy families a renewed focus on risk, with many of those that lacked a formal or structured process of identifying and mitigating risk saying they are now more likely to establish one,” van Zyl said.

On the investment front, it was no surprise, said van Zyl, that 34% of respondents were planning to reduce their investment risk and 25% were trying to increase liquidity. The crisis has made 43% of respondents increase their exposure to cash, 28% increase their exposure to gold and 23% increase their exposure to direct investments. Fifty five percent of respondents said they apply ESG or sustainable principles to their investment approach.

“As with all families, COVID-19 has contributed to a re-evaluation of priorities by wealthy families, and a renewed focus on purpose and risk. These actions will help build resilience and guide families through future unexpected challenges,” van Zyl concluded.

Quick Polls

QUESTION

The Budget Speech 2021...

ANSWER

Certainly taxpayer-friendly, with tax increases being kept to a minimum
Realistic and in accordance with my expectation
Is welcomed news and will go a long way to bolster the economy and South Africa
I have mixed feelings… cutbacks and reprioritisations in government spending pose a significant risk and will come at a cost
Oh no! What about our booze and tobacco! Higher sin taxes
fanews magazine
FAnews February 2021 Get the latest issue of FAnews

This month's headlines

FNA VS Compliance: Advisers still tripping up on section 8(1) of the Code!
Taking the lessons of 2020, into 2021
Motor insurers take note: Replacement parts cannot compromise an insured’s safety!
The broker’s dilemma: Courts lambaste non-life insures for business interruption shortcomings
Leading experts warn the world about the dangers ahead
The world of work 2021… smarter, faster, simpler
Trends that will shape the life insurance industry going forward
Subscribe now