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Private wealth professionals expect increased efforts to tax offshore wealth post-Covid 19, says Intertrust research

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An overwhelming majority (97 per cent) of private wealth professionals believe a direct consequence of Covid-19 will be governments increasing their efforts to tax offshore wealth to repair the economic damage caused by the global pandemic. 

According to new research commissioned by Intertrust Group, more than half (56 per cent) think this is “extremely” likely, while a further 41 per cent think it “moderately or slightly” likely.
 
Two thirds (67 per cent) of respondents said demand for tax services had risen over the past two years while three fifths (61 per cent) said they had seen heightened demand for regulation and compliance services. In addition, around half (48 per cent) had seen more demand for consolidated reporting from clients.
 
More than half of respondents (53 per cent) also said that the pandemic had resulted in clients re-evaluating their objectives and shifting from wealth creation to wealth preservation strategies. Just under half (45 per cent) said clients had become more focused on their own business continuity planning while just under a third (29 per cent) said the pandemic had put more emphasis on their service provider’s tech infrastructure and skills.
 
Francis Parisis, Global Head of Private Wealth, Intertrust Group, says: “One of the core take-aways from our private wealth research has been that underlying sector trends already in motion prior to Covid-19, such as a focus on best-practice technologies and consolidated data management and reporting platforms, have escalated in importance over 2020 due to the pandemic. Wealthy individuals and families have continued to demand superior, tech-enabled services to manage their wealth, particularly with regards to the structures and jurisdictions they utilise, and this will only accelerate in our view.
 
“We expect this need to focus on best-practice wealth management processes, partners and platforms will come into even sharper focus as regulations and jurisdictions accommodate new requirements in a post-Covid environment. The impact on the global economy has been profound and, looking ahead, the recovery is likely to involve significant new measures and approaches.”
 
In terms of generational trends affecting high net worth families, around half (49 per cent) of the private wealth professionals that took part in the Intertrust Group survey said that families are becoming more global, with members increasingly based in a variety of jurisdictions.
 
More than  two fifths (42 per cent) said there was more awareness of the impact of governance and regulation by family members while 39 per cent said there was a growing demand among next-generation family members for legacy plans to be established based on international best practice.
 
Three fifths (61 per cent) warned that different views between generations with regards to transparency about succession planning posed the greatest risk to successfully managing family wealth. More than half (55 per cent) said disagreements on the level of participation in the family business were a major risk while 43 per cent cited the values and mission underpinning family business as a challenge. A substantial number (41 per cent) said attitudes to investing in ESG-focused companies and funds was now key.
 
Parisis adds: “It is clear that technology has become a key enabler in the private wealth sector. Stakeholders at the forefront of tech adoption will be the ones who see greater private client growth. Consolidated reporting requirements, greater compliance and portfolio transparency have become key, and solutions such as Intertrust Group’s own IRIS portal are fundamental in driving these industry developments.
 
“We have seen a growing interest in ESG-related investment strategies, particularly among younger generations, and effective data management and use of the right platforms and reporting tools will underpin the success of refocusing portfolios towards greater ESG exposure, particularly as transparency and effective succession planning are seen as key to securing long-term family wealth.”

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