Managing Uncertainty to maximise impact
Over the years we have seen some trends fluctuate, including concerns around the impact of inflation and a potential change in government. So too, the definition of financial wellbeing has evolved from being a relatively broad concept to a more specific set of financial goals, often driven by more open conversations with advisers and self-reflection.
On the flip side, many of the findings and insights we identified several years ago still hold true today. General health and physical wellbeing is an integral part of financial wellbeing. HNWIs want to use their wealth to support beneficiaries but not in a way that demotivates them.
RESPONDENTS’ DEFINITION IN 2018
A sense of happiness and confidence with current finances and future financial plans, which supports broader feelings of wellbeing. It incorporates a plan to address uncertainty, while recognising there are some things that are out of personal control.
RESPONDENTS’ DEFINITION IN 2023
Feeling confident and secure in your finances, allowing you to live comfortably and sufficiently meet or exceed your financial goals and expectations, without feeling any strain. These goals may include having the ability to support family members, pay for long-term care or pass on wealth after death.
What our respondents think of Financial Wellbeing
FINANCIAL CONCERNS OVER TIME
Fears and worries are generally less than they were post Covid and post Ukraine; although fears of a change in government have risen since 2020 and worries about geopolitical instability and inflation are greater than 2020 and 2021 but less than last year.
TOP FINANCIAL WELLBEING CONCERNS – FEMALE VS. MALE
A deterioration in wellbeing in other walks of life seems to be fairly consistent over the last 5 years although this is a greater worry for females than males who worry more about inflation and geopolitical instability.
Our research suggests that women tend to value family financial conversations, whereas men are more likely to speak to their adviser. We found that a greater share of HNWI men (28%) have had more conversations with their adviser over the past year compared to HNWI women (21%), whilst more women (19%) have had more family financial conversations compared to men (16%).
When it comes to passing on wealth as tax efficiently as possible, our research shows that the importance-ability gap for women (21%) is lower than men (31%), with a higher percentage of women feeling able to pass on their wealth tax efficiently.
TOP FINANCIAL WELLBEING CONCERNS – NORTH VS. SOUTH
Big difference in the importance of later life care between North vs. South. The gap between importance and the perceived ability to pay for care is larger in the South.
Southern HNWIs view themselves as less able to pay for later life care compared with their Northern counterparts. Whilst 87% of Northern HNWIs regard paying for later life care as important and 74% believe they have the ability to do so, 61% of Southern HNWIs regard this as important and only 28% believe they have the ability.
Providing a deposit for a home is the most common form of financial support provided by all HNWIs to beneficiaries (selected by 55% of respondents), but this rises to 61% of respondents from London compared to 44% of respondents from Scotland.