Navigating complexity remains key for wealthy families

Family Barometer 2023

Family Barometer 2023
  • Report
  • 10 minute read
  • 02/11/23

For wealthy global families, the past year has only confirmed the greater complexity of the world we currently live in. Geopolitical tensions have intensified, central banks have raised interest rates to contain resurgent inflation and asset prices have corrected. In such testing times, it’s unsurprising that the Julius Baer 2023 Family Barometer survey finds that families are looking to their trusted advisors for guidance.

The barometer is an authoritative annual survey that monitors the shifting opinions of financial services experts who work with and advise wealthy clients. For the 2023 edition, in collaboration with Julius Baer, we canvassed more than 1,500 internal and external experts from Europe, Asia, the Middle East and the Americas.

PwC and Julius Bär

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"Family governance is the linchpin of preserving legacies in an increasingly complex world. As we engage the rising generation and emphasize effective communication, we not only instill pride and responsibility but also ensure the continuity of our family values for a stable and prosperous future."

Jürg Niederbacher,Partner, Leader Private Clients and Family Offices, PwC Switzerland
Jürg Niederbacher, Partner, Leader Private Clients and Family Offices, PwC Switzerland

Key findings 2023’s top five discussion topics

It’s clear that the period of unpredictability and heightened complexity that started with the pandemic three years ago has become normal. Experts participating in this year's survey reveal that families are primarily interested in discussing wealth-related matters beyond investments. These include the structuring of their assets and wealth, as well as establishing collaborations with advisors. While this is much the same as last year, when taken together with the greater emphasis on tax and regulation, and political stability, it’s evident that families are seeking to work more with trusted experts to organise their wealth and plan family governance. In our third edition, here’s what the experts had to say about their top five topics beyond investment, ranked in order of importance:

Family wealth-related topics beyond investments and collaboration with advisors is a topic as old as time. Yet the turmoil of the past three years explains why it’s the main topic clients want to discuss once again this year. Over the past few decades, wealthy families have spread across the globe as they go to university, work and marry in different countries, making their affairs naturally complex. But then Covid-19 turned the world upside down in 2020, heightening that complexity. Since then, geopolitics have made constant challenges a normal state of affairs. As a result, wealthy families need more specialist advice, not only to cater for complexity, but also to manage inherent risks raised by exposure to a multitude of legislations. In our experience, they are turning to wealth managers with an international presence. Trust is key, however, whether that’s trust in a particular individual or an organisation.

Taxes and regulation is the second highest ranked topic, rising from fourth in 2022. This is a key area of expertise, especially following the trend towards greater transparency in tax affairs that has occurred across the world over the past 10 years, and has been accompanied by increased regulation. Ongoing political instability and pressure on public-sector finances mean that changes to tax and regulation are likely to continue. Yet these adjustments require an understanding of fine details in each country, making local specialist expertise essential.

Family governance is a perennial topic that has become more important as wealthy families have expanded to span several generations. After one generation has expended a tremendous effort accumulating wealth, good governance helps to preserve its legacy through the generations. Families discuss governance issues – spanning the family’s constitution, shared values, education, succession and even purpose – often using periodic assemblies to ensure open communication. Good communication translates into good governance. Achieving this takes planning and organisation, though, especially when cultural and generation gaps in families are wider than before.

Political stability is the fourth highest ranked topic for discussion this year on a global basis, a little higher than its position of fifth in 2022. Notably, it ranks highest in the Americas, where it’s second to taxes and regulations, and in Asia, where it ranks third. The wealthy families in these regions appear concerned about political instability within countries, typified by political polarisation and rising nationalism. The results show that wealthy families are taking political stability and geopolitics into account far more than before, not just in their investment decisions but also in how they structure their overall wealth. For many families, this means refraining from investing in places where they believe the geopolitical situation might lead to added complexity or, at worst, a loss of assets.

Philanthropy retains its place as the fifth most discussed topic, as it was in 2022. Many wealthy families view philanthropy as an important way to give back to society, creating a positive impact and providing the family members with a purpose that binds them and brings their values to life. Discussing how philanthropy aligns with family values can foster cohesion between an extended international family’s different branches and generations. What’s more, involving the next generation of a family at a young age can instil pride, responsibility and identification with the family values. This ongoing dialogue also fosters a long-term commitment to specific philanthropic activities.

Lisa Cornwell, Partner, Private Clients and Family Offices, PwC Switzerland

“Staying compliant and understanding the potential “tax drag” on your investments, while still maximising opportunities is vital in today's dynamic financial environment.”

Lisa Cornwell,Partner, Private Clients and Family Offices, PwC Switzerland

What the 2023 survey confirms is that global families, once again, face a less predictable world, where greater instability appears to be normal and ‘black swan’ events have a habit of materialising on a regular basis. It’s a more difficult world for preserving legacies, as well as the family’s wealth and purpose. That makes careful long-term planning and structuring more important than ever. Achieving this is not just a one-off exercise but an ongoing journey involving the whole family. Yet, if properly addressed, this journey can be one that provides many opportunities and can even act as a driver for cohesion within a family. So, while there can be much to lose, there is a lot that can be won, too.

“Tax and regulation guidance is crucial for families facing an increasingly complex reality. It’s key to understand that each family is different and requires proper assessment of how its individual situation might trigger tax implications or even risks beyond the expected.”

Patrick Akiki,Partner, Financial Services Leader, PwC Switzerland
Patrick Akiki, Partner, Financial Services Leader, PwC Switzerland

Collaboration The Julius Baer Family Barometer, in collaboration with PwC

The Julius Baer Family Barometer is a yearly global survey to gather the opinions of experts who work with and advise wealthy clients and their families. Once a family owned bank, Julius Baer has ensured that family stays in their DNA. This year, Julius Baer collaborate with PwC Switzerland and its global network of firms to enable more relevant insights and share common views. In 2023, we surveyed in-house and external experts who shared their insights. Find out more about Julius Baer.

1'552

Total recipients of survey*

*41.8% overall answer rate
681

Julius Baer experts

650

PwC experts

221

Third party specialists

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Contact us

Jürg Niederbacher

Partner, Leader Private Clients & Family Offices, Zürich, PwC Switzerland

+41 58 792 42 93

Email

Lisa Cornwell

Partner, Private Clients & Family Offices - International, PwC Switzerland

+41 58 792 25 93

Email

Patrick Akiki

Partner, Financial Services Market Lead, Zürich, PwC Switzerland

+41 58 792 25 19

Email