Despite recent scrutiny over its role as a financial hub and concerns about inflation and the business environment, high- and ultra-high-net-worth entrepreneurs remain positive – about their personal wealth and business prospects.
HSBC Global Private Banking’s 2024 Global Entrepreneurial Wealth Report surveyed around 1,800 business owners across 10 markets to gauge their thoughts about the future of their businesses and their personal wealth.
It found that the UK remains an attractive location for global entrepreneurs, even when considering concerns about higher operating costs, geopolitical instability and regulatory and legislative changes.
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Charles Boulton, head of private banking for HSBC UK, said: ‘This wide-ranging research paints an intriguing portrait of today’s international business owners – and the global opportunities for them to house their wealth and business.
‘It confirms what we are also hearing from our clients – that the UK remains one of the world’s most attractive places for high- and ultra-high-net-worth entrepreneurs to live and work, not least because of its cultural diversity, trusted legal system and world-class schools and universities.’
According to the report, 69 per cent of entrepreneurs are considering moving some or all of their wealth to a new location over the next 12 months, and the UK is as popular a destination as the US, France or Singapore. Fifty-five per cent are planning a personal move, and 73 per cent are thinking about moving or expanding their business into a new market. In both cases the UK ranks among the top three destinations.
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The news will likely be welcome given recent worries about a possible exodus of HNWs and UHNWs from the UK and its ability to attract wealth and talent off the back of changes to the tax regime. Combined with the fact that the UK could become an appealing destination for wealthy American citizens following the US election, the findings support a positive picture for the UK.
Other key findings from the report include:
Optimism about future growth
More generally, entrepreneurs globally are optimistic that their personal wealth will grow in future. When asked to what extent their wealth will increase, decrease or stay the same, a vast majority expect an improvement. Fifty-nine percent of UK entrepreneurs believe it will ‘get a lot better’, the highest proportion of any of the other financial wealth centres in the report.
This perspective is driven by internal and external factors; the performance of their business and their investment portfolios play a key part in their positivity.
Exit and succession planning not a priority
Entrepreneurs, by and large, do not have well-developed plans as to how they will exit their business, nor a plan for wealth and business succession.
Only 12 per cent of global entrepreneurs have a full exit plan in place; 19 per cent have started to develop a plan, and 66 per cent have not made any plans or are not yet thinking about an exit.
‘In our work with entrepreneurs we ask if they have a Plan A and a Plan B. Plan A is where they can carry on for years if not decades; Plan B is if they’re not here tomorrow,’ Russell Prior, regional head of family governance, family office advisory and philanthropy, EMEA at HSBC Global Private Banking, said in the report. ‘What’s so surprising is the number of entrepreneurs who don’t have a well thought through Plan B.’
Succession planning is also a challenge. In total, 78 per cent of those in the survey say that keeping their business in the family and preserving their legacy is important. And 81 per cent agree they trust the next generation to uphold their values in running the family firm.
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At the same time, over half of current business owners do not have a plan for how their business might continue after them, and 32 per cent haven’t thought about the role of the next generation in the family business.
Only 26 per cent have started discussions with family members about the transfer of wealth to future generations.
Business owners seek support
Fifty-eight per cent of former entrepreneurs wish they’d had more support and resources to draw on to help them manage the exit from their business, while 30 per cent would have liked a more realistic understanding of their business’s value.
The report also found that the need for support extended beyond just an exit event. Overall, 82 percent say having a good business mentor is essential, while 81 per cent say global networks are important. However, 31 per cent don’t have an immediate peer group they can go to for advice and support.
Overall, the report paints a comprehensive picture of the evolving landscape for global entrepreneurs, underscoring the UK’s enduring appeal for business owners seeking growth, stability, and impact.
