Making a difference

Changes in wealth patterns around the world and the relentless march of globalisation are resulting in significant and complex shifts in the international private client landscape.

One of the emerging trends specialist wealth centres like Jersey are seeing as a result of this evolution is the growing focus that private clients, family offices and their advisers are placing on socially responsible wealth management. This in turn is driving innovation within the industry. According to 2015 World Wealth Report (RBCWM/Cap Gemini), 92 per cent of high-net-worth-individuals (HNWI) globally say they feel that social impact is important.

For this reason, socially responsible wealth management will be taking centre stage at our Private Wealth Conference in London on 27 April, where experts will be discussing developments in this area and exploring what they mean for private client practitioners.

While the practice of philanthropy around the world has undergone a real change in the last decade, there is expected to be ongoing evolution in the sector as social responsibility within wealth management becomes embedded as a core component of private wealth strategies.

A greater awareness of global issues and philanthropic opportunity among HNWIs has resulted in a greater desire to 'make a difference', while the ability to structure efficient flows of capital through specialist centres is helping to make these desires become a reality.

As a result, the charitable and philanthropic sectors are becoming increasingly sophisticated, with more and more bespoke solutions available to meet the often very specific objectives of the individual or family. These might range from existing charitable enterprises involved in a particular cause, right through to entirely unique one-off solutions.

New reasons to give

The strategies behind socially responsible wealth management plans are evolving too. For instance, as was acknowledged in the UK government's 'Giving' white paper (2012), tax relief is no longer a reason for donors to participate in socially responsible wealth management. Rather, sustainable investment and estate and succession planning are now very much at the centre of socially responsible wealth management strategies.

Sophistication in this area has genuine repercussions for private client advisers too. In fact, the World Wealth Report also revealed that HNWIs have real concerns about having access to top level advice, surrounding where and how to be philanthropic and how best to ensure their social impact strategies will be successful.

The debate has now moved on, for instance, to asking fundamental questions of the advisory community about what the term 'responsibility' itself means, and how advisers are qualified to help decide what is responsible and what is not when constructing holistic wealth management strategies.

For its part, Jersey has become an ideal centre through which to establish internationally-dynamic philanthropic structures, thanks to the same principles that have helped it earn a strong reputation in facilitating global capital flows: tax neutrality, security, expertise and experience.

As part of its ongoing commitment to innovation across the private wealth spectrum, Jersey recently introduced the new Charities (Jersey) Law, which created a robust and modern legal framework to support all types of international philanthropic and charitable enterprises.

The emergence of socially responsible wealth management is an exciting phenomenon that has the opportunity make positive differences to communities around the world, but it brings with it some real challenges - a need for advisers to demonstrate specific technical expertise and reputational savvy, and jurisdictions to be able to offer appropriate structures and regulatory frameworks.

Through its focus on innovation, Jersey continues to play a key role in meeting the needs of international private clients, particularly in the area of socially responsible wealth management. Do join us on 27 April to help drive forward the conversation in this area even further.

Geoff Cook is the CEO of Jersey Finance

He writes a regular blog about Jersey for Private Client Adviser