Europe’s high net worth individuals (HNWIs) feel a deep sense of social responsibility and list tax compliance, obeying industry regulations and conducting fair business practices among the factors that are important to them in their wealth creation, according to OneLife which issued a statement yesterday.
These findings, drawn from Essential Wealth: The Interplay between Self and Society, are based on the views of 601 HNWIs across six European markets, with an average wealth level of €3.5 million.
The report finds that almost half of HNWIs believe that tax levels are appropriate and 6% believe they could afford to pay more. While this means that two in every five HNWIs think they are over-paying on tax, succession planning, savings and retirement income are the main drivers behind choosing financial solutions like pensions, ISAs and life assurance contracts, rather than the specific optimisation opportunities that these products deliver.
Indeed, pensions – a widely used optimisation solution in the retail market - are also the most leveraged product at the HNW level, yet just two in every five investors have this product to improve the rate of tax that they pay. In France, openness around tax optimisation is slightly higher; here, 63% of HNWIs have a life assurance contract to optimise their tax.
Half of European HNWIs said that wealth makes them invoke anxiety rather than happiness. This could, in part, be due to the attitude change they experience when their status is revealed; almost half of respondents stated that the reaction, when others learn of their wealth level, is typically negative. The anxiety HNWIs feel about their wealth translates into uneasiness when talking openly about it – both in wider society and also in a family context. Worryingly, just a quarter of respondents talk to their children about wealth on a regular basis, while almost half of them broach the subject sometimes and 28% never engage on the topic.
This feeling of concern is more prevalent among millennials (58%), than Baby Boomers (40%).
"In the wealth industry, we have an important responsibility to the younger generation to start their wealth journey on the right foot,” said Marc Stevens, CEO of OneLife. “We want to empower millennials to explore wealth as a positive force that can not only enhance their own lives but also be used to drive meaningful engagement within their communities. Through effective planning for the long-term, we believe that this can be achieved."
Graph Source: OneLife and Scorpio Partnership, Essential Wealth: The Interplay of Self and Society
