By Will Annan, Director at Fort
The wealth management landscape is evolving
rapidly, driven by a generational shift in values.
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As millennials and Gen Z rise to prominence, trustees are facing growing expectations to align wealth strategies with social and environmental responsibility. We have witnessed a great deal of change within the trust industry and what was once an industry dominated by traditional investment strategies is now one where trustees have increasingly needed to embrace sustainable and conscious investing.
The global investment landscape for trustees is undergoing a profound transformation. Today, sustainable investing is no longer a niche market but a mainstream expectation. Investors, especially the younger generations, are demanding that their wealth not only generates financial returns, but also contributes positively to society and the environment.
Sustainable investing includes a focus on renewable energy, sustainable agriculture and companies with strong ethical practices.
Most, if not all of the investment managers we work with, have responded to these changes by offering tailored investment portfolios that prioritise these sectors, ensuring that our clients’ assets are growing and also contributing to a sustainable future.
One significant challenge has been educating clients about the benefits of sustainable investing.
Historically, there has been a perception that sustainable investments might underperform compared to traditional investments. However, recent data shows that ESG-focused investments often match or outperform conventional portfolios, particularly over the long-term. By integrating these insights into our client consultations, we are helping to shift mindsets and demonstrate that sustainability and profitability can go hand in hand.
Philanthropy and building legacies
Building a lasting legacy has always been a cornerstone of trust structures. Trust structures with a strong philanthropic aim or purpose can be powerful vehicles for creating an enduring, positive impact on society.
We have seen a rise in the use of charitable trusts and foundations with a sustainable focus. These structures allow clients to ask trustees to consider funding causes that they are passionate about, such as environmental conservation, education and social justice. Moreover, by incorporating sustainability into the trust’s philanthropic efforts, clients are ensuring that their legacies will contribute to a better world for future generations.
Trusts and foundations can be structured to support green initiatives or social enterprises, providing long-term funding that aligns with beneficiary values. This not only enhances the trust or foundation’s impact, but also sets a powerful example for younger beneficiaries, encouraging them to continue the philanthropic tradition.
Next-gen wealth
Millennials and Gen Z are poised to inherit an unprecedented amount of wealth, and their values are driving significant changes in the trust industry. Unlike previous generations, these younger cohorts place a strong emphasis on sustainability, transparency and social responsibility.
We are also seeing younger clients becoming not just passive beneficiaries, but active participants in shaping the ethos and objectives of trust structures so that they align with their own ethical and sustainable values.
Practise what we preach
While Fort is fortunate (no pun intended!) that it has a long-serving and extremely experienced workforce, we are fully aware that we must strive to be a sustainable and both environmentally and socially responsible business ourselves.
We have a team in place that has embedded sustainability into our culture and how we operate and Fort has a long and proud record of philanthropy and social engagement with our beautiful island of Guernsey.
By embracing sustainable investing, facilitating philanthropic legacies, and adapting to the values of millennials and Gen Z, trustees can ensure that our industry survives and thrives in the decades to come.
