Industry Challenges

Mustafa Hussain

A potential collision course

Renaissance thinking amongst vanguard families who plan for both their legacy and their wealth is inspirational for the professionals who engage with them. But this new approach also comes with challenges.

In this two minute video, the third and final in a trilogy, Mustafa Hussain considers a number of challenges including how we balance the potential collision course between the need to preserve capital and the sacrifice of income in favour of social returns.

Transforming Finance for Good

Introducing the first Sustainable Finance training course dedicated to International Finance Centres

Equilibrium Futures, a globally-recognised sustainable finance consultancy, is delighted to announce the launch of a groundbreaking Sustainable Finance training course, specifically tailored for professionals in International Finance Centres (IFCs). Developed by international thought leader Andrew Mitchell, this new and engaging video-led eight-module course is set to empower and educate financial professionals at every level, equipping them with the knowledge and skills required to thrive in the rapidly evolving landscape of sustainable finance.

Designed with a focus on IFCs like Jersey, the course addresses the specific needs and challenges faced by professionals operating within these financial centres. As the global demand for sustainable finance continues to surge, this comprehensive training programme provides a unique opportunity for financial professionals to enhance their expertise and stay ahead of the sustainability curve.

Leading the course is Andrew Mitchell, a world authority on natural capital and advisor to major banks and institutions on policy, supply chain risks and innovative finance systems linked to sustainability. Andrew Mitchell is also the founder and vice-chair of the Taskforce for Nature-Related Financial Disclosure (TNFD), a major global initiative leading the development of the world’s first risk management and reporting framework for sustainable finance and biodiversity risk, due for global release in late 2023. Andrew Mitchell is to be awarded a Royal Medal for his work on climate change and forests on 5th June 2023 at the Royal Geographical Society.

“This course represents a significant milestone in sustainable finance education, particularly for professionals working within IFCs,” said Andrew Mitchell. “The landscape of finance is changing rapidly. The rise of ESG investing, the rapid transformation of sustainability stocks into a source of profit and purpose and increasing regulation designed to enhance climate and nature net zero goals, are combining into a perfect storm of risk and opportunity that no finance professional can afford not to understand. Our goal is to create an immersive and visually engaging learning experience that will empower every participant, regardless of their level of expertise, to embrace sustainable finance principles and contribute to a more sustainable and resilient financial industry.”

The Understanding Sustainable Finance curriculum content has been devised to respond to specific concerns within industry, and covers a wide range of topics, including ESG integration, sustainable investment strategies, regulatory frameworks, impact measurements and emerging trends. Through expertly crafted video content, participants will delve into real-world case studies, interactive exercises and insightful comments from industry experts, making the learning experience both informative and engaging.

Equilibrium Futures wishes to thank Accuro who has been an early adopter of the initiative since its inception. Paul Douglas, Managing Director of Accuro in Jersey said: “We are proud to sponsor this important addition to the training landscape for global financial institutions. As a leading provider of fiduciary and family office services, Accuro recognises the critical importance of sustainable finance in driving positive change. This course will empower financial professionals with the knowledge and the skills to navigate the complex landscape of sustainable finance, and we are excited to support the development of a better-trained workforce that can respond to the growing demand for sustainable investment solutions. Together, we can create a more sustainable future for our clients, communities, and the planet.”

Joe Moynihan, Chief Executive Officer at Jersey Finance said: “Our ‘Jersey for Good’ strategy aims for Jersey to be recognised by its clients, key stakeholders and other partners as the leading sustainable international finance centre in the markets it serves by 2030. Upskilling the Island’s financial ecosystem is a key goal of this strategy. Offering training courses such as this to finance firms in Jersey brings our industry closer to achieving this goal. With a new sustainable finance strategy to catalyse action and focussed training and resources available, businesses in Jersey are well-placed to support embedding sustainable finance across all our sectors.”

The Equilibrium Futures ‘Understanding Sustainable Finance’ course is designed for professionals including trustees, banks, asset managers and governments seeking to enhance their expertise in sustainable finance and will be CPD accredited. Participants will have access to a wealth of resources, including interactive materials, video content, expert quotes, real-word experiences, case studies and a wide range of sustainable finance resources across eight modules. The training course format has been devised to not only be informative, but also inspiring and accessible to practitioners at all levels, from Csuite executives to newly onboarded professionals, empowering them to benefit from better learning outcomes and the advancement of sustainable finance practices.

To celebrate the course launch, Equilibrium Futures and Accuro will be hosting a special launch event at CCA Galleries, 10 Hill Street, St Helier, Jersey on Wednesday 7th June, from 5.30 – 7.30pm. The event will feature keynote speaker Andrew Mitchell, who will share insights and thought-provoking perspectives on sustainable finance, as well as Joe Moynihan, Director of Jersey Finance and Paul Douglas of Accuro. Attendees will have the opportunity to network with industry professionals and learn more about the course. Canapés will be served, along with a special cocktail created by Tidal Rum. In an era where sustainable finance is not just a trend but a fundamental shift in the financial landscape, this course offers an invaluable opportunity for financial professionals to deepen their understanding, gain a competitive edge, and contribute to positive change.

For more information about Equilibrium Futures and the ‘Understanding Sustainable Finance’ course, please contact [email protected].

Join us for the launch event on Wednesday 7th June at CCA Galleries – register your interest in attending by emailing [email protected].

Legacy Evolution

Mustafa Hussain

The new living legacy blueprint

It is unusual but refreshing to see governance documents that use words such as “love, respect, humility and fun” as measures of progress and success.

In this two minute video, the second in a trilogy, Mustafa Hussain explains how the traditional view of family legacy is evolving, with vanguard families providing a blueprint for new living legacies that demonstrate a shift away from status, towards growth, change and values with emotions.

Are women more risk averse than men?

Kelly Watson

One of the common clichés is that women are more cautious in their financial and investment decisions and tend to take fewer risks than men. But is this true? And if true, is this a negative? Has the industry overlooked HNW women and served them based on outdated assumptions about their goals, risk appetite and investment attitude?

In this webinar hosted by ThoughtLeaders4 Private Client ahead of International Women’s Day, Accuro’s Kelly Watson and Natacha Onawelho-Loren are joined by Sarah Jane Boon from Charles Russell Speechlys and Carlos Mejia from Rothschild & Co to look at the increasingly important role that women play in creating and preserving wealth alongside their attitude and aspirations to future planning and finance.

How embracing gender equity can benefit all

The headline theme of this year’s International Women’s Day is #EmbraceEquity and that is particularly pertinent to private wealth management, with women traditionally having been less involved in managing family assets.

What do we mean by equity and how does it differ from equality? While gender equality is about providing women with the same opportunities as men, gender equity is about addressing the imbalances that can sometimes prevent women from making the most of those opportunities.

The IWD 2023 briefing notes go on to say that you can’t have equality until you have equity, but there are certain indicia emerging which show us the position is evolving.

The transfer of wealth to women 

A 2022 report by management consultants McKinsey found that, in Western Europe, women investors already control one third of assets under management (AUM). This is expected to rise to 45% by 2030, with some other regions predicted to see women cross the 50% threshold within that timeframe.

In other words, women may already have achieved equality in terms of AUM by the end of the decade. Yet, when it comes to equity, there is plenty to suggest that there is still some progress to be made. Numerous studies suggest that this is potentially an issue on two fronts; firstly, women are less likely to be the financial decision makers within families and relationships, and secondly it is less likely that women will have had the same opportunities to access financial education and advice. Perhaps as a result, historical studies show that women are less confident and more risk averse when it comes to investing. 

The interesting question is how did equality arrive before equity? One reason is that, although there are more women entrepreneurs generating more wealth than ever before, it can be said that much of the huge shift comes from inheritance. We should not lose sight of other sources of wealth for women including substantial financial amounts awarded by the Courts as part of a divorce settlement and women’s life expectancy (in many countries) is longer than that of their male peers. Indeed, the huge transfer of wealth as the baby boomer generation ages is a key underlying driver of equality in asset ownership.

Addressing the obstacles to equity

While the rise in women’s wealth is a positive trend which will undoubtedly drive changes in our industry, it also risks masking the equity problem. For example, if women who inherit wealth have not had the same opportunities for financial education and experience as their male counterparts, the risk is that they will be at a disadvantage when it comes to assuming the not insignificant responsibility of preserving wealth for future generations.

It is this area in which I think advisers, trustees and family offices can all play a crucial role. After all, as an industry, we have the knowledge, relationships and access to professionals to help women in this situation. That may in some cases mean stepping in to help close the gaps in financial understanding or education, but it begins first with an area in which many believe that women have a natural advantage: communication. Building a relationship through understanding an individual woman’s circumstances and their personal and family goals is the crucial first step.

Getting to know and understand our clients’ mind-set and approach is the primary starting point for a successful advisory relationship. That is something we are fully committed to at Accuro. We want to understand what is important to our clients so that we can help them, and their family achieve their broader aims.

Building a better future together

Women who have built businesses and head up family offices are likely to have already overcome any gender barriers that they met along the way. But what about future generations? As many of our clients see children and grandchildren growing up they are increasingly thinking about their futures within the context of family wealth. How can they gain an earlier understanding of the family business and finances so that they are better placed to get involved? This needs to be done carefully and often gradually but it is an area where the right adviser or trustee can, while being sensitive to family dynamics, offer a valuable perspective. 

Finally, it is important to note that gender equity works both ways and men also have some traditional barriers to overcome. I wouldn’t be the first to observe that women can be better at discussing the sort of personal and sensitive subjects which can sometimes hold families back from dealing with difficult decisions on everything from inheritance to investment strategy. Women also perhaps tend to take a more holistic, long-term view. Arguably, in some parts of the world, this comes from a traditional role as mothers and care givers which creates a natural focus on ensuring, quite literally, the long-term survival of the family. From a wealth management perspective, this approach can be invaluable.

Similarly, there could be some positive aspects to those studies showing that women tend to be more risk averse than men. After all, why not be cautious when it comes to protecting family assets? There are plenty of areas of financial planning where women are leading the way, including the current trend in impact and ESG investing.

As access and exposure to managing wealth increases for women and as a result embracing equity evolves from a headline theme to a trend, there can be benefits for all.

These are certainly exciting times to be working with women in the world of wealth management.

Renaissance Thinking

Mustafa Hussain

An evolution in thought and action is taking place

Amongst the vanguard families who plan for their legacy and wealth, there is an evolution in thought and action taking place.

In this short video, the first in a trilogy, I explain how we are seeing a renaissance of older ideas and a renewed appreciation for the relationship between humans and their environment. This is reflected in our re-found responsibility to people and our planet.

Why women are writing the future of wealth

Natacha Onawelho-Loren
There can be little doubt that women’s relationship to wealth is rapidly changing. More women than ever before are creating, managing and inheriting wealth, with that trend set to accelerate further over the next few years.

The progress is even more remarkable given the considerable barriers women have had to overcome. Historically, society was slow to acknowledge and include women in business and financial decision making. My own profession must shoulder some of the blame, with wealth management and finance having long been male-dominated professions. Even now, recent figures from the UK Financial Conduct Authority revealed that just 16% of financial advisers are female, creating the risk that women investors are underserved.

I’m pleased to report that Accuro is very much bucking that particular trend, with 70% of our staff being female. And not only do women operate at all levels of the organisation, we represent every stage of the female journey, from youthful graduates to mothers with children and those supporting elderly parents. That understanding of the individual and multiple needs of women and their families is, I believe, vital in supporting the sort of good decision-making that will not only preserve wealth but create a positive future across generations.

The facts on female wealth

Before looking at the broader challenges, let’s first focus on the facts. Taking the world’s biggest economy as our example, women already control a third of total US household financial assets, adding up to a staggering $10 trillion. But that may only be the beginning of a far bigger shift. As the so-called baby boomer generation age, more and more wealth will transfer to women because, not only do we live on average around five years longer than men, we also typically marry partners two or three years older. As a result, analysts expect that the majority of US wealth will belong to women by 2030.

Although that may be good news for those fortunate enough to inherit valuable businesses and investments, it also presents a huge challenge as many older women, unlike their younger counterparts, have traditionally not always been heavily involved in financial decision making within their relationships.

In my own experience at Accuro, I have helped many highly capable women who, on the death of their partner, have had a huge amount of stress – on top of their grief – in fully understanding and gaining control of the family assets. All because their partner had, probably for the best of reasons, kept such matters largely to themselves.

The sad irony here is that the deceased or seriously ill partner may well have dedicated their working life to securing the family’s wealth for future generations, only to leave behind a widow who was unprepared for the task of doing so. Fortunately, good advice can go a long way to addressing such problems retrospectively, but there is no substitute for putting plans in place well ahead of any life-changing event.

Starting crucial conversations across generations

There are also inter-generational challenges as daughters and even granddaughters, empowered by their education and experiences, may want to take a more active part in the family business and finances. This can be a great advantage. After all, who better to play a part in preserving and protecting the family wealth for future generations? However, it’s important to recognise that the older generations who typically control the finances may take a slower route to involving younger family members, particularly if those women have not traditionally played key roles in the family business.

The crucial role first step for me in this situation is surprisingly simple: starting conversations, between partners or across generations, so that all parties can have a voice and decisions can be made with a truly long-term view.

Women and risk – myth or reality?

It’s interesting to note that we’ve got this far without any mention of investment strategies or asset types. But one question that regularly crops up in this context is whether women have a different attitude to risk than men. That may seem slightly nonsensical when, like me, you’ve met successful female entrepreneurs who have risked everything to build highly successful businesses. However, there are plenty of studies which support that risk-averse view, showing, for example that women are far more likely to choose fixed-income investments over risker equities.  

At the risk of doing my own stereotyping here, that bias away from riskier investments could also be partially explained by the observation that women, as traditional caregivers and raisers of future generations, naturally have more of an eye on the long-term and so their choices will inevitably differ from those of the more responsibility-free risk taker. It’s also interesting to note that women are more likely to take social and environmental values into account when investing, suggesting that a long-term, more community-minded approach may be in our nature. 

Let’s take a final, sideways look at the subject through a parallel with the world of corporate M&A dealmaking. Recent research from Bayes Business School, City, University of London shows how, when buying another company, female CEOs are more likely to seek advice, are more risk-averse and tend to seek out targets with stronger performance metrics. Interestingly, according to the same research, female CEOs often get better post-deal results because of that greater caution. It’s a fascinating subject with many arguments either way, so I’ll leave you to draw your own conclusion.

Looking ahead

Whatever you conclude, one thing is certain: the next generation of women are growing up with very different attitudes and aspirations, showing that women can simultaneously be caregivers, entrepreneurs and excellent stewards of family wealth.

No longer a niche demographic; the future of wealth will increasingly be written by women.

Supporting communities in Africa through an Accuro administered family trust

Africa Desert
We consider our responsibility to people and the planet to be incredibly important, with sustainability and purpose at the heart of our strategy and culture.

An example of this is the financial support for a number of charities with projects based in East Africa, facilitated via a family trust structure that Accuro Trustees (Jersey) Ltd acts as trustee to.

Accuro colleagues Mark Pinnick and Alex Zomparelli recently visited some of the charities and projects being supported to see first-hand the difference being made to local communities through funds Accuro has provided in its capacity as trustee. Mark and Alex were also joined by a member of the Grant Committee, a group which was established to provide recommendations to the trustee on potential charitable projects. 

The three selected charities projects (Action Aid, Amref and Brooke East Africa) all exist to do good, and while they do so in very different ways, ultimately have a common goal of support and empowerment.

Action Aid – Access to Justice

This project has brought together survivors of gender-based violence and intimate partner violence to give them a voice and a safe space to share their experiences. It also assists in providing legal, emotional and practical help and advice with local community leaders, law enforcement and health professionals.

Amref – Community Led Alternative Rights of Passage and Water Sanitation and Health

Amref’s mission is to increase sustainable health access to communities in Africa through solutions in human resources for health, health services delivery and investments in health. Its water tanks project involves the building of water tanks in rural pastoral communities of the Maasai which allows water to be channelled to households and schools, eliminating the need for women and young girls to walk for many miles just to fetch water. The water tanks project allows Amref to be accepted by and talk to members of the community including the elders, facilitating education with the goal of changing practices such as female genital mutilation, and long held cultural issues such as teenage pregnancies and child marriages.

Brooke East Africa – Action for Working Horses and Donkeys

This charity works on the frontline with donkey-owning communities, funding community-led initiatives to protect their donkeys and adding resources on the ground to expand lobbying for animal welfare and community engagement. Young members of the donkey users and owner community groups shared their stores about how the charity has given them economic empowerment and allowed them to get away from the lure of drugs and alcohol dependency by organising sports such as football.

Accuro’s Alex Zomparelli said in relation to all of the projects visited, “Despite hearing some heart-wrenching stories, what shines though is a huge sense of optimism for the future. The optimism and positivity displayed by the survivors of gender-based violence and intimate partner violence is hugely inspirational. Providing economic empowerment has encouraged small shoots of entrepreneurialism to spring up and help local communities to develop their own businesses – from forming groups to care for and support working donkeys, to survivors of violence making and selling homemade products, putting together business plans and taking products to market. All of which empowers people to support themselves and become more financially independent.”

As well as visiting the projects in the communities, the team were also able to spend some time at the offices of the respective charities. This provided a valuable opportunity to obtain an overview of the governance procedures on the ground that each charity maintains, and it was clear from the outset that the in-house capabilities of each charity would not be out of place in a FTSE 100 listed company. There were very strong processes and procedures together with in-house accountants, internal compliance, IT resources as well as teams to carry out their own checks and balances on the partner organisations they work with.

This has also allowed us, as representatives of the trustee, to see how the charities we support apply funds in the most practical and value for money way whilst still adhering to their respective internal policies and procedures. It also provides excellent first-hand accounts and evidence which can be used for our discussions with our own financial regulator, the Jersey Financial Services Commission, as part of their National Risk Assessment (NRA).  Additionally, it has provided the opportunity to deepen our understanding of the charitable work carried out and our relationship with the Grant Committee members and the family that established the structure.

The next generation – challenging the status quo in favour of sustainability

Kelly Watson
As a trustee I consider our role as being focused on helping to steward families through the challenges of life whilst assisting to protect them and their wealth. In my experience, a key part of being able to achieve this is communication, particularly listening, not something that always come naturally but which is so important. Whether it be the settlor who has a story to tell about how they made their wealth, or the beneficiary with ideas as to how to grow the trust assets with the newest biggest investment opportunity, a trustee should always be ready to listen. The needs, requirements and ideals of one beneficiary to the next are often very different, even more so across the generations.
As the world focuses more on preserving our environment and protecting the planet, trustees need to be aware that it is those generations who will feel the impact of any failures in this regard, that are focusing on the subject more and more and recognising that they have a responsibility to fight climate change and its related consequences. Where once beneficiaries might have been content to agree a target return on investments driven solely by the needs of their own lifestyle, now this is increasingly subject to ensuring that no harm is done in the process.

Next-Gen, short for next-generation, was an adjective that originally came into being to describe a product that had been developed using the latest technology and was likely to replace an existing product. In the wealth arena, it seems that it is commonly being used to describe the transfer of wealth from one generation to the next and the significant differences we as service providers are seeing between those generations.

Trustees do not have the prerogative of being able to discard the old generation in favour of the next-gen. As trustee we need to listen to this shift of focus whilst also keeping an eye on / ear out to those generations who haven’t been swept up in the same shift.

Some of the older generation still retain the view that a “traditional family” is formed of a man and a woman who are married and have naturally born children. Now “blended” families are on the rise, with same sex parents, unmarried couples, and / or nonbiological children forming a part of the mix. Legislation is evolving (in some jurisdictions at least) to keep up to date with these altered views but it is also important that trustees keep up to date and ensure that the documentation governing our families’ structures does so too.

It is no surprise that with such a significant change in what is seen as representing the “norm” that views on wealth, its management and the sharing of such wealth by the next-gen differ from those of the past. Such differences can risk leading to conflict between the generations which needs to be managed by the trustees in so far as it relates to trust assets. Where the “next-gen” might assume and expect sustainable investing to reasonably form a part of a portfolio, the “old-guard” often have to be persuaded that this is the correct approach, particularly when, in their opinion, it is only relatively recently (within the last decade or so) that the application of ESG and sustainability to investments has begun to affect returns positively rather than negatively.

As a trustee, we often have to balance the desire to actively include ESG and sustainability to meet the demands of the next-gen, against making sure that this doesn’t lead to the disinterest and refusal of the older generations to engage, whilst also being aware of the fact that as the law currently stands, impact investing should only form a limited part of a trust investment portfolio unless otherwise set out in the trust deed. Genuine arguments that have been used to persuade the older generation include:

  • “Sustainable investing can help future proof returns with regard to tipping points within the market, for example, with regard to climate change” – better to be invested in renewable energy sooner rather than later when the world is moving away from fossil fuels;

  • “Impact investing can be highly complementary to philanthropy giving a direct result in the areas in which families wish to target – e.g. clients buy significant land as a means to saving a patch of the world a piece at a time;

  • “Sustainable companies are being seen to do better long term investments than those that are not, meaning that returns are likely to be better if investments consider ESG matters” – this is something that is not always obvious and sometimes as a trustee it is for us to take the lead and stress test the portfolios against ESG criteria; or,

  • “Impact investing allows the funds to be used again and again with the returns that are generated from such investing thereby allowing ongoing impact in the chosen area to benefit, whereas philanthropy tends to be a donation which even if invested by the recipient, any return and future investment is beyond the control of the donor”.

Notwithstanding the fact that all of these points are valid, we have found that they often need to be gently positioned in the face of negative assumptions and misinterpretation of the impact of ESG and sustainability to those who have operated in a world where they are “new”. This is where the communication skills of trustees are key. The move of the next-gen towards ESG and sustainability is widely known and accepted, understanding the reservations of the older generations and navigating the route towards the requirements of the next-gen is where a trustee can show their worth by listening to each generation and balancing the interests as needed.

The next-gen are the future but as trustee, we should fail to listen to the past at our peril – both the past and present are important as we weave our way forwards.

Accuro expands commitment to matters of equality by signing up to 51 Employers Pledge to raise menopause awareness

51 Employers logo

The signing of the 51 Employers Charter represents Accuro’s commitment to ensuring we are accountable to make positive changes toward being a menopause friendly-business.

Paul Douglas, Managing Director of Accuro’s Jersey office, said: “The recognition of menopausal health is important to us at Accuro as it relates to gender, wellbeing and age equality in the workplace. Our signing of this pledge reflects our commitment to providing a supportive and inclusive environment. In doing so we aim to be a positive force for the change needed in our industry on a subject which people have previously avoided.”

Becky Hone, Chief People Officer of Accuro’s Group added: “We are delighted to publically support this pledge, and as a business with 66% of our workforce as female, we see it as a priority to take the necessary actions across our whole group to bring this pledge to life. We consider fostering an inclusive environment where everyone can be their best and feel supported in doing so as a priority. Menopause awareness is not well understood in most working environments and we want to do what we can to change this.”

Paul Douglas