Looking ahead to the next year, two themes that are set to continue in 2024 are geopolitical tension and wealth transfer. Experts from Hawksford explain how these aspects are set to mold the next twelve months
Darren Kelland, head of private client services, Hawksford
The prevalence of geopolitical tension is likely to continue and while the economic backdrop appears to be settling, the question of how to protect wealth, particularly with a view to transferring that wealth to the next generation at such uncertain times, will remain high on the agenda. Consequently, there will be a number of considerations private clients and family offices will likely need to account for in 2024, not least when it comes to protecting reputation, maintaining confidentiality and meeting increased regulatory and reporting obligations.
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The cooling of inflationary pressures and the consequential fall in interest rates could pave the way for capital to return to markets that has not been fully accessible for deployment. It is likely that there will be a flight to highly performing assets with a strong focus on quality of earnings in those capital movements.
It is possible that we will face UK and US elections happening at the same time, for the first time in 50 years, with potential for opposing ideologies either side of the ‘special relationship’. Financial markets tend to ignore political rhetoric and focus much more on political realities, but this transfer of power could have an impact on international trade and the geopolitical tensions previously mentioned. There would be local and international consequences for flows of capital, which will impact private and institutional wealth.
Laura Nevitt, head of family office, Hawksford
The imminent and significant intergenerational wealth transfer already is, and will continue to, add another dimension to investment decisions, with the migration of decision-making to the next generation and acceleration of ESG more broadly creating greater emphasis on sustainability and purpose. That said, families may well be wary of exposure to greenwashing accusations meaning access to professionals who can help avoid the pitfalls will be vital if they are to realise their ESG investment ambitions.
It follows that opting to utilise the expertise of outsourced service providers more widely will likely rise in 2024. Against the backdrop of increasingly complex demands from private clients and families and a regulatory environment that is becoming more and more challenging, being able to draw on the experience and expertise of dedicated, independent, external specialists will play an increasingly important role in ensuring families can realise their succession, governance and philanthropic ambitions.
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