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[Zúrich / Londres, 25 de Reuters]- Last year, when the world was turbulent due to the outbreak of the new coronavirus and suffered the worst recession after World War II, the wealth of the ultra-rich increased even more and reached a record high. high. Reached.
Although traces of the corona pandemic have spread around the world, some ultra-rich people are consulting with asset managers on ways to maintain and strengthen their wealth. There are also ultra-rich people who are considering a proactive response method, assuming that the government and society as a whole will have to bear the cost of reconstruction.
Morris Pearl, the head of the Patriotic Millionaires, a political group that argues that the rich should work harder to bridge the gap between rich and poor, said the US stock market crashed a year ago. around July of last year, and now they are well above this level. “The fundamental problem is that overall inequality is getting worse,” he said.
Millionaires are pursuing a wide range of measures, from funding philanthropy to transferring funds and businesses to trust funds and moving to tax-friendly countries and states. It was revealed in an interview with seven “millionaires” and “billionaires” and about 20 asset managers.
“It’s clearer than seeing the fire that the whole world will understand,” said Rob Weaver, chief executive of wealthy Swiss wealth management firm Tiedemann Constantia. Some clients are also considering selling key assets, such as businesses, before the tax increase.
According to a wealthy asset management company, the US is expected to push President Biden to raise taxes on the wealthy, and clients are particularly demanding about setting up a trust.
Currently, if you use a trust, you can receive a deduction of up to $ 11.7 million (approximately 1,278 million yen) per person per inheritance. Biden had proposed returning the deduction limit to the 2009 level of $ 3.5 million during the election.
Under Wilmington Trust’s Albino Act, most of its clients were on the lookout until the fourth quarter of last year, but the move accelerated after the US presidential and parliamentary elections in November last year.
According to Forbes, large-scale economic stimulus measures have helped nearly two-thirds of the ultra-wealthy increase their wealth last year, with the largest increase in wealth at a record high. As of mid-December of last year, the wealthy population had an estimated 20% increase in wealth.
According to Maximilian Kunkel of UBS, many ultra-rich people enjoy investment opportunities that are unrelated to ordinary individual investors and take full advantage of short-term derivatives transactions, etc., from sudden fluctuations in market price.
When asset prices plummet, UBS’s largest HNWI clients expect the market to eventually rebound and profit by selling put options or taking advantage of more complex venture investments.
“Some of our clients have been extraordinarily nimble, taking advantage of one of the biggest market shifts in history,” said Kunkel.
Now that governments are inflating debt and social unrest is mounting, ultra-rich people are aware that attention to their wealth will increase.
Many wealthy individuals are accelerating their plans to transfer funds to inheritance trust funds, recognizing the impending demands from the tax authorities.
According to Jason Kane of Boston Private, the millionaire family will benefit from the unique environment created by the Corona disaster, such as ultra-low interest rates and falling asset prices, to reduce future tax payments, so the unfunded assets such as businesses. You are also about to move into a trust fund.
Some people make the boldest decision to move to a country or region that is kind to the millionaire. According to Credit Suisse’s Babak Dustmartoshi, countries and regions that are highly transparent, open and internationally recognized are candidates, with Switzerland, Luxembourg and Singapore being popular …
According to Henry and Partners, the number of inquiries about the transfer of wealthy people increased during the corona epidemic. Last year, the number of inquiries from US clients increased by 206% over the previous year and from Brazil by 156%.
In many emerging economies, there is growing concern that restricted public services will cause social unrest, with relatively young wealthy people looking to move abroad.
Julius Baer’s Beatrice Sánchez said: “Corona stripped the king naked. People suddenly noticed that their health care system was fragile and that social safety nets weren’t really available. I said.
According to Cindy Ostrager of Clairefeld Citizens Private Wealth, many millionaires have moved from New York City to the Hamptons, a luxurious vacation spot on Long Island. Initially it was to avoid corona infection, but later it was due to the light tax burden.
Light tax states like Texas, Florida and Washington are also popular, according to Private Wealth Group Christie Hanson.
Countries continue to struggle to cope with the Corona disaster, but economists say a bigger problem is imminent. It’s a gap between general economic trends and the ultra-rich.
According to a study by the Think Tank Institute for Policy Research and Americans for Tax Fairness, the wealth of wealthy Americans has increased by nearly $ 1.3 trillion, or nearly 50%, from the start of the Corona epidemic to early March. of this year. The rich have $ 4.2 trillion in wealth, about 20% of last year’s gross domestic product (GDP). This is twice the total wealth of the lower half of the 330 million people with income levels.
Nobel laureate in economics and Columbia University professor Joseph Stiglitz said: “It has been four years to praise inequality, and now people are right.” I said no “.
According to Judy Sparsov of UBS, the corona epidemic has turned many ultra-rich people into a focus of social philosophies. In particular, the issue of the disparity among rich young people has become more and more talked about.
“Sure, we succeeded. We worked hard and succeeded. But let’s stop closing our eyes to the world around us. Let’s get out of our own world,” Sparsov said frequently among the clan.
For many wealthy people, it means funding philanthropy.
Sparsov’s team saw an increase in clients partnering with UBS’s Optimus Foundation to fund anti-poverty activities like Action Against Hangers, with last year’s donations of $ 168 million, up 74% from the previous year. .
(Reporter for Brenna Hughes Neghaiwi, Reporter for Simon Jessop)
