Threat perception
SIR – The Spear’s Wealth Management Survey (Briefing, Spear’s 99) highlights geopolitics as the dominant perceived threat to UHNW wealth, and the emphasis on behavioural risk is well placed. Periods of volatility continue to test investor discipline, with poor decisions at moments of stress often causing more harm than good, reinforcing the value of a disciplined and consistent investment approach.
However, for UK clients, domestic tax and policy changes are increasingly driving behaviour. We are seeing this reflected not just in portfolio positioning, but in more fundamental decisions around structuring, capital deployment and, in some cases, domicile.
In that context, the cumulative impact of policy uncertainty is likely to prove more consequential than market volatility itself.
Jack Barrett, Arbuthnot Latham
Related
[See also: Fortune telling: What the wealth industry sees coming]
Policy in practice
SIR – The survey (Briefing, Spear’s 99) reflects what I see across my client base every week. The ranking of domestic tax and policy change as the second-highest threat understates its practical impact for many of my clients. In the past 18 months alone, changes to business property relief, pension inheritance tax and the introduction of the long-term resident regime have caused real concern and forced us to rethink structures that had been in place for years.
On geopolitical instability, clients have developed a thicker skin. Fewer are inclined to make reactive decisions in the heat of a news cycle. The risk, though, is that this resilience tips into inertia. The most valuable conversations I am having right now are about whether portfolios that weathered recent volatility well are actually positioned for the future and my clients’ evolving needs.
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Private parts
SIR – Joseph Bullmore’s engaging portrait of the UHNW social media phenomenon (Spear’s 99) will resonate with those of us who advise the 0.01 per cent on their reputational and privacy issues. The article identifies what practitioners have long observed: that the self-enforced omertà of the ultra-rich was never merely a matter of taste, but of calculated legal risk. When that veil lifts, however affectionately, the questions multiply.
The distinction the article draws between subjects feeling ‘seen’ rather than ‘exposed’ is precisely the balance privacy law requires content creators to strike. Those who freely flaunt their wealth and lifestyle publicly will find it considerably harder to resist media intrusion into those same areas. The legal risk runs the other way, however, when creators stray beyond what their subjects have implicitly placed in the public domain. Sharing granular detail of relationships, private conduct or information not freely offered risks crossing into misuse of private information, however satirical the intent. The omertà, it turns out, was also a form of self-protection.
[See also: From Gstaad Guy to Supersnake: how social media finally went ultra-high-net-worth]
Born in the USA
SIR – One of the greatest difficulties with surrogacies in the UK is the lack of vetting, oversight and formal structures (Spear’s 99).
Under our current laws, lawyers are not able to advise on the arrangements and agreements in the initial stages. This can lead to strangers entering into ill-advised arrangements with
one another.
As a practitioner, I recognise the advantages of a well-regulated system like the one that exists in the US, which provides proper advice and scrutiny from the outset. While doing a schedule of expenses in a US surrogacy for authorisation by the English High Court, I saw that the surrogate was incredibly well protected and looked after. The budgets included expenses for enhanced medical supervision, yoga, massages, vitamins and travelling to pregnancy-related appointments by taxi. There was also provision for compensation for loss of earnings, as well as the risks and impact of, a pregnancy on their day-to-day life.
So where money is not an object, it’s no surprise that the US is a more attractive place to pursue a surrogacy than the UK.
Hilka Hollmann, Dawson Cornwell
[See also: Inside the world of luxury ‘fertility family offices’ for UHNWs]
To submit a letter for publication in Spear’s, please email alice.coleman@spearswms.com. All correspondence will be considered for publication unless otherwise stated.
This article first appeared in Spear’s Magazine Issue 100. Click here to subscribe
