The ‘Wealth Management’s New Imperatives’ conference, co-organised by Skoll Centre for Social Entrepreneurship and The Good Ancestor Movement organised, has raised profound questions on the origins of wealth, and challenges the roles of philanthropy, impact investing and professional advisers.
With the backdrop of global wealth inequality having significantly worsened during the Covid pandemic, and the UK living through the era of highest tax burden since the Second World War coupled with a cost-of-living crisis – there was a poignant tone at the conference. When asked about the audience’s views on the future, only 4 people out of room of close to 200 thought that the future is a positive one.
And professional advisers seem to be doing little to contribute to a more positive future. According to the report launched at the conference, which studied the narratives and behaviours of London-based wealth advisors, only three out of 33 wealth advisors – less than 10 per cent – interviewed have even heard of Oxfam’s reporting on billionaires and inequality. Oxfam has been consistently conducting research on this topic, most recently in January 2022, citing that ‘The world’s ten richest men more than doubled their fortunes from $700 billion to $1.5 trillion – at a rate of $1.3 billion a day – during the pandemic.’ This statistic, among other statistics and anecdotes cited throughout the conference, shows the urgency for challenging wealth inequality, and for changing the professional advisers industry that have been predicated on wealth preservation.
As to be expected in a conference on wealth, there were discussions on philanthropy – but unexpectedly, the discussions were on the limitations and even harm of philanthropy. ‘Philanthropy won’t save us,’ said Derek Bardowell, Director of Ten Years’ Time and published author; and similarly, Founder of the Good Ancestor Movement said, ‘there is a need to de-centre philanthropy. Philanthropy is a by-product which enables a certain group of people to accumulate wealth – at the expense of and at the exclusion of others.’ Other speakers also challenge the non-democratic nature of philanthropy. Philanthropy changes society based on the preferences of the philanthropists, rather than those of the citizens. Marlene, an inheritor to wealth, succinctly put it as, ‘I’m in power (wealth) doesn’t mean I should be in charge.’
On impact investing, there were some discussions but there was a general agreement that it still doesn’t go far enough. Philanthropy and impact investing were described as ‘comfort blankets’ by Louisa Mann, director and family member of Skagen Conscience Capital, but they do not go far enough. Instead, the solutions being discussed by wealth holders were reparations, which require a deep critique of wealth, and redistribution, through tax justice. And the Good Ancestors Movement is calling for professional advisors to steward their clients through reaching these goals, in order to build a truly equitable and regenerative economy.
The vision is laudable, but it does appear to be an uphill battle. At the conference, another report looking at the narrative of tax was also launched, which shows that professional advisers are all singularly focused on tax minimisation and wealth maximisation. Wealth holders discussed their wishes for professional advisers to move from a fear and protection agenda to one of optimism and excitement, and from a scarcity and chronic individualism mindset, to one of abundance and interdependence. However, given the vested interests in the room, I can’t help but wonder if the handful of progressive wealth holders will be able to create the systemic shift in the industry. And I left asking myself about the political context in the UK, whether there will be meaningful changes to tackle wealth inequality. But on a positive note, everyone in the room agreed that there is enough wealth for everyone – the new imperative for wealth management should be one of reparations and redistribution. And perhaps philanthropy and impact investing are indeed distracting us from pursuing a more fair and just world.
Bonnie Chiu is Managing Director at The Social Investment Consultancy.