Business

Philanthropy support to ‘generous generation’ could unlock money for society

Published

2 months ago

August 5, 2024

PRO BONO Economics research estimates that there are around 230,000 people under 35 in the UK with net financial assets exceeding £100,000
Nearly all wealthy young people surveyed express a strong desire to have a positive societal impact with their money, with 88% already donating to charity
However, around 110,000 wealthy people under 35 may not have a relationship with a financial or wealth adviser at present.

New research reveals that, while a significant percentage of young people in the UK are keen to contribute to good causes, many are not receiving advice on how best to invest their money.

The research, by Pro Bono Economics (PBE)1, found that while there are around 230,000 people under 35 with net assets exceeding £100,000, roughly 110,000 of those may not be in contact with a financial or wealth adviser.2

As well as unlocking large charitable donations, providing philanthropy support for young wealthy clients would be a significant growth opportunity for financial advisers given their ability to understand and cater to the philanthropic inclinations of what PBE has coined the ’generous generation’ and build long-term relationships with the high-net-worth individuals of the future.

To address this issue PBE brought together the Financial Conduct Authority, the Treasury, and the Department of Culture Media and Sport, as well as an alliance of accredited bodies, government entities, and philanthropy experts, to enhance philanthropy training for advisers.3

An estimated £5.5 trillion is expected to be passed down to younger generations over the next 20 to 30 years – the so-called ‘Great Wealth Transfer’. Financial advisers and firms seeking to attract the business of the 230,000 under-35s who already possess net financial assets exceeding £100,000 will need to adapt.

Encouragingly, 88 per cent of wealthy young people already donate to charity and PBE found that 90 per cent of those surveyed expressed a strong desire to have a positive societal impact with their money. With this generation giving more to charity – and in greater numbers – than ever before, financial advisers will need to tap into their philanthropic instincts.4 Last year 38% donated more than £2,000 to charity last year, compared to 5% of over-55s. This makes them eight times more likely to have made a substantial gift to charity or charities. Despite straitened times, 63% of those surveyed said they would consider increasing their charitable donations, compared to 13% of over-55s.

While this generation is also more likely to seek financial advice – 78% compared to 61% of those over 55 – more than half of wealthy under-35s also indicated they would be more likely to choose a financial adviser who offers philanthropy advice.

One compelling route to engaging with younger clients and potential clients on their giving is through Donor Advised Funds, a convenient charitable giving vehicles which can be funded through cash, shares or third-party entities. Encouragingly, 65% of under 35s5 said they would be interested in investing in a DAF in the future.

Sisters Lauren Gupta and Becky Holmes founded the Helvellyn Foundation, which provides philanthropic grants to individuals and organisations involved in biodiversity and the education of young people. When they first started they found almost no philanthropic advice from financial advisers.

Becky said:

“I found that most advisers focused on just growing your money, with philanthropy always being a secondary consideration. That immediately lost me because that’s not the go-to motivation for everyone. It’s a big deal to push against the status quo – it’s very difficult to get out of that box. A lot of wealth advisers will also not talk about the impact of how money is invested for fear of offending clients, such as whether it will be to the detriment of a habitat or a community.

“My advice to people wanting to give philanthropically is to speak to foundations in the UK and other people who have had that experience before speaking to advisers.”

Lauren said:

“We all live in a society affected by global issues, and advisors need to talk about how wealth management can impact, positively or negatively, these issues. But they don’t seem to offer that, it’s presumed that you are looking to preserve and grow the wealth regardless of the impact – there’s such a protective mindset on it.

“I have also been speaking to advisers about how they engage the next generation of wealth holders, because we were not engaged by the advisers around our family. My caveat is that advice should be more holistic and impact-focused; we are probably more progressive because we didn’t get that engagement and ended up seeking more forward-thinking advice elsewhere! One thing that helped us early on was a wealth coach who talked us through the emotional as well as the planning side of wealth, which we had not seen anywhere else. To anyone thinking about giving money away, you don’t have to start big. Initially a large sum seemed scary, but now we feel more secure and are braver in what we are doing.”

David Clarke set up a project called Wealth Shared which saw 12 people decide how to spend his £100,000 inheritance.

David said:

“My mum died in 2014 and I inherited this amount of money and I had this feeling of not being comfortable with inherited wealth – I don’t think it’s how the world should work so I decided to give it away.

“I went through a thought process of wondering what to do with it, and sent out 600 letters in my local area. The task was they could do anything with the money – and they had to give it away rather than having any lasting relationship with that money – but it could go to any individual or organisation in the world. In the end the money went to organisations in the L8 postcode – an area where there’s a lot of deprivation.

“A lot more people are in a position like me and the amount of wealth inherited is going to massively increase over the coming decades. We’re also in a time where people are more socially aware. “If you’re ever in a position about what to do with the money there’s power in democratising that decision and dispersing the pressure so it’s not all on the individual.”

Nicole Sykes, Director of Policy and Communications at Pro Bono Economics and co-author of the report, said:

“This is an opportune moment for financial advisers with the Great Wealth Transfer, and the time to act is now. By championing philanthropy, advisers can ensure they remain relevant and tap into the significant good will of the generous generation.

“Firms and advisers that do not currently offer philanthropy services or limit their philanthropy offerings to the ultra-wealthy risk being left behind by demographics, demand, and by governmental action. But by evolving and embracing this challenge they can attract the next generation of clients in a competitive market and contribute to a more giving, socially-conscious society.”

Business

Role of Tourism Minister disappears – again

Published

9 hours ago

September 20, 2024

Tom Sinclair

WELSH tourism leaders have once again found themselves in the position where they have to ask a new First Minister to appoint a Minister with explicit responsibility for Tourism, following the recent Cabinet reshuffle.

The Wales Tourism Alliance, together with the Chairs of Welsh Government’s own Regional Tourism Fora wrote to Eluned Morgan when it was unclear what had happened to the express reference to a tourism Minister or Deputy Minister as in the past. The letter was also signed by Wales’s main independent destination management and marketing organisations; Visit Mid Wales, Visit North Wales and Visit Pembrokeshire. Representatives of the primary sectors within the industry, notably accommodation, added their signatures, as did representatives of the rural and retail economies of Wales.

Suzy Davies, Chair of the Wales Tourism Alliance said: “It’s a shame we have to make this case yet again. Unlike other nations of the UK, responsibility for tourism as an industry – it’s not just promotion – is retained within Welsh Government. It’s not an arms length body with the ability to make its own partnerships to raise money, or with a route to change leadership without a Senedd election.

“As a result it needs a Minister who has the time and focus to lead, find resources, accept accountability and champion the industry at Cabinet level.

“In the meantime, we welcome Rebecca Evans to her role as Cabinet Secretary for the Economy and look forward to meeting her soon. Tourism has faced yet another difficult year, with the poor weather really not helping to extend the season on top of well-rehearsed challenges around the cost of doing business, the pressure in holidaymakers’ own purses, and a slew of government policies, so we need that champion within Welsh Government.

‘’It will also be a chance for us to reinforce our position that the relationship between governments and the tourism industry should not be about setting fires and putting them out. It’s less exhausting and more productive to give weight to industry voices as we saw during lockdown. We all want our industry to prosper safely, sustainably and responsibly.

“We also hope that looking at policy through the lens of the economy rather than the finance brief will be a help in understanding the value of the tourism ecosystem; its role in a number of areas of government policy, and why it’s so important to protect it from collateral damage as well focusing on Visit Wales’s much-appreciated promotion work.”

Business

Welsh Secretary champions world-leading compound semiconductor cluster

Published

1 day ago

September 19, 2024

Tom Sinclair

SECRETARY of State for Wales, Jo Stevens, has commended Newport’s compound semiconductor cluster for its significant contribution to the UK’s economic prosperity while exploring avenues for its continued growth.

Compound semiconductors are integral to a multitude of products, including electric vehicles, solar panels, and smartphones. These materials are expected to play a critical role in the evolution of emerging technologies such as driverless cars and artificial intelligence.

During her visit, Stevens witnessed the cutting-edge research and innovation taking place at Newport’s compound semiconductor cluster. She met with staff at CSA Catapult and CSconnected, part of the South Wales Semiconductor Cluster, and was given a tour of their state-of-the-art facilities.

CSA Catapult is recognised as the UK’s leading authority on compound semiconductor applications. The organisation collaborates with industry, start-ups, and academic institutions to advance research and bring commercially viable solutions to market.

A recent report from the Welsh Economy Research Unit at Cardiff University revealed that CSA Catapult’s projects have created or safeguarded over 4,000 jobs from 2019 to 2023. This includes the creation of 1,325 full-time positions, contributing an estimated £600 million in gross value added (GVA) to the UK economy.

Welsh Secretary Jo Stevens told The Pembrokeshire Herald: “Wales has incubated this high-tech, world-leading industry in Newport, which has so much potential for the future. Their work forms a critical part of the technology we rely on day-to-day, but also makes a huge contribution to our clean energy ambitions and even national security.

“The compound semiconductor cluster is vital for our economy, with innovative businesses supported by the Catapult creating high-skilled, well-paid jobs that bring prosperity and opportunity to South Wales.

“We will back innovative businesses like this to the hilt as we fulfil the UK government’s mission to drive economic growth.”

Howard Rupprecht, Director of CSconnected, said: “We have seen exceptional economic growth over the last five years as our local industry takes advantage of a semiconductor market that is set to surpass $1 trillion per annum by 2030.

“Our semiconductor jobs are knowledge-intensive, highly paid, and are very ‘sticky,’ not being susceptible to global ‘offshoring’. We are positioned to further accelerate growth through the SE Wales Investment Zone and look forward to working with the UK government on the development of their forthcoming Industrial Strategy.”

Martin McHugh, Chief Executive Officer of CSA Catapult, added: “We were pleased to be able to show the Secretary of State our facilities and how our work contributes to the local Welsh and UK economies. Through our collaborations with organisations in Wales and across the country, we’re helping to create growth and safeguard jobs and are making a significant contribution to the UK’s productivity.”

The compound semiconductor cluster in Newport continues to position Wales as a leader in this crucial technology sector, promising further economic growth and high-quality job creation in the years to come.

Business

Carmarthenshire celebrates 60% gigabit connectivity milestone

Published

1 day ago

September 19, 2024

Tom Sinclair

THE RURAL Welsh county of Carmarthenshire is celebrating a major achievement in its quest for improved digital infrastructure, as it reaches the milestone of 60% gigabit broadband connectivity. This is a significant leap from just 25% in 2021, marking a pivotal step in the region’s digital transformation.

The Swansea Bay City Deal’s Digital Infrastructure Programme has been instrumental in driving this progress, with a focus on enhancing broadband access in hard-to-reach areas. The success is largely attributed to the county’s Digital Champions, who have worked tirelessly with stakeholders, including alternative network providers (AltNets) Voneus and WeFibre, mainstream providers like Openreach, and local communities. Their efforts have been key in raising awareness of the benefits of high-speed connectivity and how to achieve it.

Carmarthenshire’s commitment to its ‘connectivity through collaboration’ ethos has been a cornerstone of its strategy. By strengthening digital infrastructure, the county aims to ensure reliable connectivity for all residents and businesses, promoting both social and economic growth.

Cllr Hazel Evans, Cabinet Member for Regeneration, Leisure, Culture and Tourism, praised the achievement:
“This is a huge leap in progress for a county that has many harder-to-reach areas. It’s encouraging to see so many more people now have the improved connectivity needed to thrive both socially and economically. I’m confident that we shall take this much further to achieve a fully digital inclusive Carmarthenshire in the future.”

The achievement not only offers immediate social and economic benefits but also opens the door for further inward investment, particularly in sectors like tourism and agriculture that stand to benefit from emerging technologies.

The county’s success has been bolstered by close collaboration with the UK Government’s Department for Science, Innovation and Technology (DSIT) and the Welsh Government. These partnerships have facilitated crucial funding streams and empowered local communities to advocate for better digital infrastructure in their areas.

Behind the scenes, the work of Carmarthenshire County Council has been integral to reaching this milestone. Key contributors include supportive community and county councillors, as well as the planning, infrastructure, and highways departments, all of whom have played a role in the successful delivery of broadband projects.

Simon Davies, Head of Economic Development and Property at Carmarthenshire County Council, lauded the collective effort:
“Reaching the 60% full fibre milestone in the county is a fantastic achievement. It wouldn’t have been possible without the dedication of our Digital Champions and the collaborative efforts of numerous internal departments. Working closely with the Digital Infrastructure Team, I’m certain we will continue to increase that percentage, ensuring no one is left behind.”

Carmarthenshire’s journey towards digital inclusion is already having a marked impact. With 60% gigabit connectivity now a reality, the Digital Infrastructure Programme team is aiming even higher, working in collaboration with UK Government initiatives such as Project Gigabit. The goal is to position Carmarthenshire as a leading digital county, supporting the prosperity of its businesses and communities.