The report observes that whilst adapting the family investments to a new geopolitical reality is key globally and navigating the tax landscape remains an evergreen, other topics such as Family Governance seem to play a key role in the Middle East and political stability is a big concern specially in the Americas and Asia.  
 
Dubai, United Arab Emirates: Julius Baer’s 2023 Family Barometer shows that the "Rising Generation”(aged between 18 and 40), is ready to take on more responsibility and wants to leave their personal footprint and legacy. The next generation of ultra-wealthy are willing to take bigger risks than their parents and have clear expectations towards the advisors they choose to take on their personal wealth journey. 
 
The report highlights that navigating complexity remains key for wealthy families and spotlights on the top 5 topics for client families in the last 12 months. It is interesting to note that families across the region including, Europe, Asia, the Middle East, Africa, and the Americas share similar challenges mainly driven by complexity and political events, whereas health seems to shift out of focus for now.
 
Overall key findings - simplifying complexity takes centre stage.

The findings confirm that the past few years’ ‘black swan’ events have increased complexity for global families.

While the overall results are similar to 2022, taxes and regulation along with political stability are discussed more often.

Simplifying today’s complexity often requires international expertise from trusted advisors.

For wealthy global families, the past year has only confirmed the greater complexity of the world we currently live in. Geopolitical tensions have intensified, central banks have raised interest rates to contain resurgent inflation and asset prices have corrected. 
 
Middle East findings 
For the first time, Julius Baer’s 2023 Family Barometer provides fascinating regional insights into the minds of wealthy families. 
 
The survey found that geopolitical risk and inflation is a concern especially in the Middle East and place importance on navigating the tax and regulatory systems as it has become ever more intricate, and wealthy families are turning to specialist advisors for help. 

Family Governance seem to play a key role in the Middle East given good governance helps to preserve legacy through generations. 

Looking into the future wealthy families in the region favor real estate and direct investments compared to other markets. 

Families in Middle East seem interested in discussing family wealth-related topics as families have spread across the globe, making their affairs naturally complex. 

Like families in Asia, the size of the first substantial investment by Middle Eastern families ranges between one to two million, which is higher than those families in the Americas and Europe. Interestingly, the risk appetite of rising generations versus wealth holder generation is the highest in the Middle East.  
 
Regis Burger, Head of Middle East & Africa at Julius Baer, said, “Family businesses are a key driving force behind the Middle East economies as they make a significant impact to the regional ecosystem as job creators, community builders and drivers of growth.  Given the vital role they play in society and the fact that over USD 1 trillion of assets will move hands in the next decade in the region, wealth and succession planning takes centre stage. Developing the next generation to take over while ensuring effective governance can be quite a challenging process to manage. Given that Julius Baer had its origin as a family business, we have unique insights into this topic, and we continue working closely with our clients to assist them and their families to secure their financial future/”

Ahmad Chahidi, Head of Wealth Planning, Middle East & Africa at Julius Baer (Middle East) Ltd., commented, “We see an increased focus among family businesses on equipping their next generation with the tools to manage the wealth transfer process. As a wealth manager, we have been advising clients in the region on setting up an efficient family and corporate governance structure while managing multiple jurisdictions. We also work closely with our clients to better understand the risk appetite of the next generation in order to manage the wealth transition process seamlessly. Though a relatively recent development, we increasingly see families in the region especially in the UAE, use local trusts and Foundations to support them in their succession planning journey. We are happy to note that propositions such as DIFC Foundation and ADGM Foundation which provide governance insight are gaining momentum. This, complemented with the establishment of centres such as the DIFC Family Wealth Centre (DFWC) by the Dubai International Financial Centre play an important role in developing the regional ecosystem for family businesses.”

What does all of this mean for the future of family wealth?
What the 2023 survey confirms is that global families, once again, face a less predictable world, where greater instability appears to be normal and ‘black swan’ events have a habit of materialising on a regular basis. It’s a more difficult world for preserving legacies, as well as the family’s wealth and purpose.
 
That makes careful long-term planning and structuring more important than ever. Achieving this is not just a one-off exercise but an ongoing journey involving the whole family. Yet, if properly addressed, this journey can be one that provides many opportunities and can even act as a driver for cohesion within a family. So, while there can be much to lose, there is a lot that can be won, too.
 
Julius Baer’s Family Barometer is our authoritative annual survey that monitors the shifting opinions of financial services experts who work with and advise wealthy clients. For the 2023 edition, the Julius Baer has collaborated with PwC Switzerland and has canvassed more than 1,500 internal and external experts to enable more relevant insights and share common views. 

Appendix: 
2023’s top five discussion topics
Experts participating in this year’s survey reveal that families are primarily interested in discussing wealth-related matters beyond investments. These include the structuring of their assets and wealth, as well as establishing collaborations with advisors. While this is much the same as last year, when taken together with the greater emphasis on tax and regulation, and political stability, it’s evident that families are seeking to work more with trusted experts to organise their wealth and plan family governance.
 
Here’s an overview of what the experts had to say about their top five topics beyond investment, ranked in order of importance:
 
1. Family wealth-related topics beyond investments and collaboration with advisors is a topic as old as time. As families become more global, their affairs naturally grow more complex. Geopolitics have also made constant challenges a normal state of affairs. As a result, wealthy families need more specialist advice, not only to cater for complexity, but also to manage inherent risks raised by exposure to a multitude of legislations. 
 
2. Taxes and regulation is the second highest ranked topic, rising from fourth in 2022. Ongoing political instability and pressure on public-sector finances mean that changes to tax and regulation are likely to continue. Yet these adjustments require an understanding of fine details in each country, making local specialist expertise essential. 
 
3. Family governance is a perennial topic that has become more important as wealthy families have expanded to span several generations. After one generation has expended a tremendous effort accumulating wealth, good governance helps to preserve its legacy through the generations. Good communication regarding a family’s constitution, shared values, education, succession and even purpose, can translate into good governance.
 
4. Political stability is the fourth highest ranked topic for discussion this year on a global basis, a little higher than its position of fifth in 2022. The results show that wealthy families are taking political stability and geopolitics into account far more than before, not just in their investment decisions but also in how they structure their overall wealth. 
 
5. Philanthropy retains its place as the fifth most discussed topic, as it was in 2022. Talking about how philanthropy aligns with family values can foster cohesion between an extended international family’s different branches and generations. What’s more, involving the next generation of a family at a young age can instill pride, responsibility and identification with the family values. 
 
Prerna Agarwal
Senior Consultant
Hanover Middle East