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UHNWs favour equities for next 30-year period

The UK’s ultra-high net worth individuals rank equities as the best investment to sustain wealth for the next generation, according to a new survey examining investment predictions for the next three decades.

The UK’s ultra-high net worth individuals rank equities as the best investment to sustain wealth for the next generation, according to a new survey examining investment predictions for the next three decades.

According to The world in 2043: wealth strategies for intergenerational success, launched by multi family office Fleming Family & Partners (FF&P), British adults will hand down as much as £5 trillion (€5.9 trillion) over the next three decades.

The survey of 90 UHNW individuals and their advisers found 27% believe emerging market equities will perform best over the next 30 years.

This was followed by developed world equities, agriculture and private equity, with many citing these as a suitable hedge against inflation.

Fifty-five per cent of respondents said real estate was the most suitable alternative asset for wealthy families to invest in, highlighting the allure of physical assets.

London was predicted to be the top financial centre for the UK’s UHNW individuals in the next 30 years, with 87% listing it in their top three. This was followed by Switzerland (53%) and Hong Kong (26%).

Political risk was one of the top five concerns that those surveyed had become more concerned about since the global financial crisis in 2008.

Many surveyed feared rising government deficits and social spending obligations would push policymakers to raise more taxes from the wealthy. Sixty-two per cent expected the UK would become a less attractive jurisdiction for inheritance tax purposes over the next 30 years.

Many respondents, however, acknowledged tax avoidance is not acceptable – something the report suggested could be a result of the recent political and media backlash against it.

Chief executive of FF&P Ian Marsh said: “Preserving, and growing wealth, have become ever more challenging in the current low yield environment. Post 2008, investors have also grown more fearful of volatility.”

He said this made it more important for families to focus on long-term, strategic investment planning.

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