COVID-19 Wealth Structuring Trends

Since March 2020, we have watched with considerable interest to determine whether the COVID-19 crisis has been a motivator for wealth structuring or not. It is well regarded that fear of loss – be it of one’s health or wealth are strong drivers for wealth structuring so you would think that the current crisis would significantly increase the level of interest in wealth planning. 

Whilst it is no doubt too early to draw conclusions on the level of interest in wealth planning from the COVID-19 crisis, an immediate observation is the number of people who are drawing up their Will, Lasting Powers of Attorney and for those with Trusts, amending their Memorandum of Wishes. 
Although we have not seen or heard of a rush of HNWI establishing trusts being established at this stage, there are clearly on-going conversations with those who were considering their options before the crisis. 

This could be for the following reasons:

• Drawing up a Will is something which is probably considered urgent, straightforward, and inexpensive, whereas setting up a trust is a much bigger decision
• Since setting up a Trust is a bigger financial decision and many HNWI will have experienced considerable financial loss, with remaining uncertainty about whether there will be further loss to follow, many will be nervous about spending money on trust solutions until the markets are on firmer footing
• HNWI probably want to meet their advisor in person to discuss their options
• Fear is often a driver for wealth planning, and if this holds true, once we can travel and meet clients, we ought to expect a strong rebound in wealth structuring services after this crisis is over