STEP – the industry group for trust and estate practitioners worldwide – has issued a report probing advisors' attitudes to wealth, tax, sustainability, and more.

A survey of more than 900 private client advisors across 86 countries finds that more than three-quarters of them (78 per cent) said their clients most commonly raise their concern of ensuring that future generations are financially secure.

Just under half (45 per cent) say clients want to ensure that it is invested well; 36 per cent say clients want to maintain family unity; and 32 per cent say clients want to maintain a high standard of living and lifestyle for future generations.

The findings come in an Attitudes to Wealth report by the Society of Trust and Estate Practitioners. The report offers a snapshot of attitudes towards wealth, taxation and social responsibility.

“Safeguarding legacy for current and future generations overwhelmingly remains a priority for clients. What is also apparent is that attitudes are not uniform with some clients taking steps to limit their wealth accumulation. The same is true in relation to their views of taxation,” Catherine Grum, a STEP spokesperson, said. 

STEP’s report comes at a time when HNW individuals are under pressure from revenue-hungry governments in a political climate that in some ways is hostile to significant wealth. The STEP report, for example, cited how support for wealth taxes gained momentum at the World Economic Forum in Davos last year following calls from 250 billionaires and millionaires under the alliance of the Patriotic Millionaires. This was followed by bold proposals at the G20 to tax the wealth of billionaires by at least 2 per cent annually. (With the election of Donald Trump in the US last November, such a proposal seems unlikely to succeed.)

“Advisors report that today’s clients are increasingly informed and intentional about setting up enduring legacies that safeguard their families’ futures,” the report said. “Social responsibility is becoming a key consideration, especially among younger clients, but it has yet to translate into meaningful action.”

Tax
The report said that while taxation remains a major concern, mitigating tax exposure is not the most influential factor for clients and there is a shift towards an approach that balances efficiency and compliance with long-term wealth planning. 

The report said 67 per cent of clients raise tax as a concern; 66 per cent raised protecting wealth from threats (political, economic and legislative); and 21 per cent referred to maintaining legitimate privacy of financial affairs.

Some 43 per cent of respondents said clients wanted to be socially responsible but were not taking actions; 26 per cent said clients were acting; 23 per cent are not considering the topic.

STEP’s Grum added: “In the main, clients have a more negative than positive attitude to tax which may not be surprising but more than one in 10 reported a more positive attitude towards taxation. A significant number of practitioners had clients who actively declined tax reliefs.

“There's a clear rise in social responsibility, particularly among younger clients. It's encouraging to see advisors routinely broach philanthropic giving. There remains significant potential to embed these discussions at the core of wealth planning, aligning financial decisions with personal values and purpose,” Grum added.

Twenty-six per cent of respondents are in the UK; 17 per cent in Europe (including Switzerland); 14 per cent are in Canada; 10 per cent in Asia; 7 per cent in the US; 5 per cent in Africa; 6 per cent in the Caribbean; 6 per cent in the UK Crown Dependencies; 4 per cent in Central and South America; 2 per cent in the Middle East, and 4 per cent in Oceania.

Client bases were across the age ranges with the majority (about 80 per cent) having Baby Boomer (60 to 78 years) and Generation X (44 to 59 years) clients. About 40 per cent spoke of having Millennial (28 to 43 years) and traditionalist (over 79 years) clients, and 20 per cent are seeing Generation Z (27 years and under) clients. Half of respondents said their clients were ultra-high net worth ($30 million or more); 64 per cent said their clients were "very HNW" ($5 million to $30 million), and 60 per cent had HNW clients ($1 million to $5 million).