“I’m alone. I’m alone and I’ve got lots of money. That’s not a fun place to be. Trust me. How do I know who to trust? Who do I turn to and have comfort and reassurance that what we talk about won’t restrict what I see ahead of me and what opportunities I could take to do something valuable with all this money? Rather than just keep it in a safe, investment pot, property or something?”

Those were the words a friend shared with me the other day. We’ve only been friends a few months, and we’ve never talked about her father’s death and what money he left their family. When I worked at Macmillan Cancer Support and the Paul Hamlyn Foundation (PHF), I’d always been in awe about how passionate and committed both sides are: charities and donors.  It was evident at Macmillan why people were driven to make change, but since then I’ve met an assortment of funders. Working at PHF, was an eye-opening experience. I was lucky to meet many funders, as having exposure to that space is hard to gain; and working in it is quite isolated and insular. However, it was in this network that I saw a genuine example of ‘there is no right or wrong, there is only opinion’. I asked myself, ‘how do donors form these opinions’? It was evident that if you don’t have a clear direction of desired change from the beginning, it’s not going to be a good (or effective) journey to be on. And it’ll be even harder if you’re going on that journey alone.

I (naively) assumed that people who were professionally managing other people’s wealth would be the people who would ask these questions. If they are suggesting ways high net-worth individuals (HNWIs) could invest their money, surely they would ask if they were interested in charitable giving and provide them with guidance – or would at least signpost them to other resources. With the transfer of wealth to the next-gen being anywhere up to $130 trillion over the next 40 years, who is curating its distribution?

For the dissertation for my MSc at Cass Business School, I looked into the relationship between HNWIs, wealth advisors and philanthropy. I found it exciting that academic papers from the US, Canada and Australia showed these questions and discussions were taking place. But was disappointed that there were no UK academic papers. Why were the UK researchers and advisors not looking into this? There were a few reports released about how the UK advisors were starting to pick up on the interest of HNWIs in philanthropy, so that was reassuring. But the few of those there are, were published pre-financial crisis in 2008.

It all seems to have gone downhill since then.

My reading showed how much philanthropic giving and activities are led by societal-led expectations and conversations in the US (name and shame those who don’t do anything). Philanthropic giving is also an acceptable conversation in Canada and Australia; even more so in Asia.

But for the HNWIs in the UK, who can they speak to? Although there are next-gen groups such as Nexus, not everyone is aware or part of those groups. Who can these people speak to, if they don’t have any ‘philanthropic-peers’?  Or maybe they do have these peers but, with the English discomfort about even talking about how much money you have laying around, maybe they just don’t know they have friends like these.

I conducted 18 semi-structured interviews with a mix of advisors and HNWIs and sent an online survey to 348 wealth advisors, using the questions that that had been asked in similar studies in Australia and Canada as the framework for my studies.

It seems quite a few advisors don’t know if they’re coming or going. 40% of respondents think it will be advisors who drive the philanthropic advisory market forward over the next 5 years. 43% think it will be the clients who will be in the driving seat. So it’s moving forward (somehow) – good thing, yes? Why is it happening?

40% think that advisors have a moral responsibility and there is also a business need to raise the topic of philanthropy with their clients. 35% disagree with both of these points. So what is pushing it forward? What are their incentives for offering this service?

58% said it increases client retention, 52% said it raises the public image of the organisation, 44% said it helps to compete with their peers and 42% said it increases client referral. So what are the barriers stopping this happening?

56% said advisors lack knowledge about the different facets in the charitable sector, 41% said advisors aren’t informed about the need for this service and 38% said there is no clear information about what ‘best practice’ looks like for this service. So what could be done to address these issues?

38% said that discussions about philanthropy would be part of their general discourse if they received more information/training on giving and tax-related issues and chartable vehicle options. 29% said that if they received more training for soft skills, how to start personal conversations with their clients about their values and how they can nurture this relationship, it would be an incentive to have these conversations. And 95% said that if there was shared learning between advisors, this would stimulate demand from their clients and this would develop this market.  

A 2004 article in the Harvard Business Review, stated that the most important characteristic of America’s leading business figures in the last 100 years is ‘contextual intelligence’. It’s ‘the ability to understand and capitalise on the sweeping trends influencing the marketplace of their time’. We live in a world in which the transfer of wealth is going above and beyond expectation, to a group of next-gen and millennials who are open about how their values shape their expectation, demand and activities. If the purpose of a business is to manage someone else’s money in a way that benefits the clients, they are walking along a tightrope if they have not woken up to this fact. My wealthy friend, far from being alone, is very much part of a growing crowd.

The next-gen are the next round of customers, clients, employees (and CEOs). Companies need to realise this and action it by upping their game in the philanthropy space.

In 2013, Mark Carney, Governor of the Bank of England said “banks need to have a culture change and reconnect with society before they become socially useless”. I wonder if anyone in the UK banks was listening? I think my friend who is feeling so alone right now might show hardly anyone was listening – but let’s hope they start to. It’s in their best interest after all.