In a private dining room in La Fregate, Guernsey, on the evening of June 27th 2019, Global Elite members gathered to discuss macro trends across the “evolution of wealth.”

As the discussion progressed (and was naturally monitored by Piers Master of Charles Russell Speechlys,) members were served “fine food with panoramic picture views of the harbour and other Channel Islands beyond.”

In understanding the “evolution of wealth,” numerous scenarios were offered to the group in dissecting how money is made and the consequent impact of such.

One of the biggest scenarios posed was: “Is tomorrow's money going to become unclean and what will we do if it is, as advisors?” The example that was given is as follows: A client's structure was set up a number of years ago from an investment in a venture that is now considered illegal in some jurisdictions. Their entire wealth could be tainted if held in Guernsey, as all of the money has to be legally acquired. Are we, as advisors, in breach?

Naturally, the discussion then progressed to: “Who determines if the wealth is “dodgy”?” If the US has legalised the sale of cannabis for instance, should all jurisdictions recognise this? What about Asian tycoons who made their money through “unsavoury dealings?” During prohibition, individuals profited by bootlegging alcohol. Would this money be deemed illegally acquired now? As such, when did pirates becomes privateers?

The Global Elite debated several answers to the contentious scenarios, the main one being that time is ultimately the biggest test and that given more of it, activities may become normalised. To speed up the “test of time,” public opinion needs to be changed, as capitalism does not wash well with the public at large in 2019. Clients need to be aware of their public image and be prepared to seek reputational advice.

Due to the increase in public scepticism, many around the table believed that the pendulum has swung too far in favour of compliance and regulation, hindering the creation of wealth through competition.  In the UK in particular, there are obscene amounts of reported illegal dealings, but rarely is there a real issue.

Adding fuel to the fire is the fact that families are now becoming “truly global.” Not only is this creating friction between the numerous jurisdictions they settle in as to “who” determines if the acquired wealth is illegal, but it also introduces cultural differences as to how to advise on conflicts. In addition to this, the impact of the Next Generation and the need for “ethical” investments, away from offshore handling, makes the evolution of wealth extremely difficult to handle for advisors.

In summary, the Global Elite group considered the following as prerequisites in assessing the evolution of wealth in relation to their client base:

  • The impact of time: You cannot control it, but you can advise on how wealth is currently perceived;
  • The impact of PR and social media: You can seek to only influence it, through reputational advice;
  • The impact of globalisation: You need to understand the clash in cultures and strive to be truly “global;” and
  • Plan ahead and predict issues that may arise for you client, with the introduction of new governments, increasing regulation and less privacy.

Global Elite would like to thank IQ-EQ, in particular, Steve Sokic, for their partnership during the Channel Island discussions.