World Shaping Wealth - The impact of affluence on the next economy

Market focus on Germany
<strong>World</strong> <strong>Shaping</strong>
<strong>Wealth</strong>
A new legacy for Germany’s wealthy,
as world’s most proactive entrepreneurs
invest in world’s biggest challenges
Investments from ultra high net
worth (UHNW) individuals in
Germany are expected to
ensure a greater legacy for
future generations, not just
their families.
95
Our new report, based on recent research among
215 UHNW individuals and 225 advisers, explores the
aspirations and motivations driving the deployment
<strong>of</strong> private wealth today and in years to come.
Findings reveal the ultra-rich in Germany are
among the world’s most proactive, with 95%
describing themselves as active wealth creators –
entrepreneurs who are proactive, future orientated
investors. <strong>The</strong>y prefer to invest liquid wealth in
unique investment opportunities as they arise.
%
<strong>of</strong> Germany’s ultra-rich
describe themselves as
active wealth creators.
This independent global opinion research was conducted in late 2021 and analyzed
shortly after in January 2022. <strong>The</strong> study does not take into account current events.
1

Market focus on Germany
While the German economy has been driven by
research and innovation, and the start-up scene
has seen a significant boom in recent years,
German private investors seem less inclined than
others throughout the world on prioritising the
adoption <strong>of</strong> more new technologies. Instead,
they’re focusing on actively engaging with leaders
and governments to deploy their wealth to find
solutions to worldwide issues.
Further data collected from Germany’s most
affluent reveals that they are advocates for a
better future. 78% want to use their wealth to
solve global problems, such as public health crisis,
availability <strong>of</strong> food, environmental issues and
energy dependencies. <strong>The</strong> same percentage <strong>of</strong>
individuals also want to create a legacy they will
be remembered for. While this is the lowest <strong>of</strong> all
the markets studied it’s clear these opportunities
are intrinsically connected, for UHNW individuals in
Germany to create their own legacy and still secure
their family’s future through the creation <strong>of</strong> a better
world.
78 %
<strong>of</strong> Germany’s most
affluent want to use their
wealth to solve global
problems.
<strong>The</strong> desire to protect the family’s assets is also linked
to the desire to ensure the continuation <strong>of</strong> the family
business. In order to guarantee this, comprehensive
planning and provision tailored to the family’s wishes
and goals is required at various levels, for example
through a partnership agreement, prenuptial
agreement or will.
Dr. Cornelia Maetschke–Biersack | Partner
Taylor Wessing, Duesseldorf, Germany
2

Market focus on Germany
ESG is no longer just an add-on, it is indispensable.
Especially for the younger generation <strong>of</strong> UHNWIs,
ESG plays a big role in their investment decisions,
not only because they are simply interested in it or
following a trend, but also because it is important
to them to leave an <strong>impact</strong>.
Martin Kraus | Partner
Taylor Wessing, Munich, Germany
Complex tax legislations pose major challenges for
our clients and reduce their international mobility.
From the very beginning, many UHNWIs have to
consider the global context in their tax structuring.
Pr<strong>of</strong>. Dr. Jens Escher, LL.M. | Partner
Taylor Wessing, Duesseldorf, Germany
3

0 20 40 60 80 100
Market focus on Germany
Key findings for Germany
<strong>The</strong> changing face <strong>of</strong> private wealth
A new generation <strong>of</strong> self-made wealth creators is dominating the market and
advocating for a better future. While UNHW individuals in Germany could create
<strong>impact</strong> with their investment decisions, they also have an opportunity to be an
advocate for change, pushing for the needed adoption, within their own businesses.
78% <strong>of</strong> UHNW individuals in
Germany believe that they have a
responsibility to use their wealth to
solve important global problems,
including environmental issues,
public health crises and conflicts.
This was close to the global
average <strong>of</strong> 81%.
Asia 93%
Switzerland 93%
USA 85%
France 80%
Austria 80%
81% Avg
Germany
UK
Middle East
78%
75%
72%
0%
100%
Additional findings
62 % 65 %
Compared with the global average <strong>of</strong> 67%, 62% <strong>of</strong>
UHNW individuals in Germany consider the effect
that geopolitical issues can have on their wealth
and proactively seek advice to protect it from
those <strong>impact</strong>s, including risks in their global supply
chain, their international asset allocation and due
to interplay <strong>of</strong> complex tax regimes.
Family businesses play a big role in the private
wealth market in Germany, but 65% <strong>of</strong> UHNW
individuals say that they are actively engaged
with leaders and governments on global issues,
which is marginally above the global average
<strong>of</strong> 62%.
4

Market focus on Germany
Key findings (continued)
Leaving a legacy <strong>of</strong> positive change
This new breed <strong>of</strong> UHNW individual is considering how they can use their wealth to
make lasting change that they will be remembered for.
Building a legacy is a strong driver
<strong>of</strong> success for UHNW individuals in
Germany, and some are still creating
a clear path to hand over a strong
portfolio <strong>of</strong> assets to their families.
But the majority (72%) are taking a
wider view, passing wealth primarily
to charity, foundation trusts and
philanthropy. This is slightly less than
the global average <strong>of</strong> 77%.
0%
77% Avg
100%
France 100%
Asia 79%
USA 74%
Switzerland 79%
UK 78%
Austria 78%
Middle East 77%
Germany 72%
Additional findings
48 %
“Creating a legacy that I will be remembered for”
came out as the number one consideration for
48% <strong>of</strong> UHNW individuals in Germany, compared
to 50% globally.
28 %
<strong>of</strong> UHNW individuals in Germany are focussing
their succession planning on their family, more
than the global average <strong>of</strong> 23%.
5

0.000000 16.666667 33.333333 50.000000 66.666667 83.333333 100.000000
Market focus on Germany
Key findings (continued)
Investing for <strong>impact</strong>
In their quest to create a positive legacy, UHNW individuals around the world are
investing in ESG funds and directing their wealth towards some <strong>of</strong> the greatest
global issues we are facing.
<strong>The</strong>re’s a distinct momentum on sustainability
that has been visible in this market:
Corporate ESG and CSR activities, ESG criteria
incorporated in investment decisions, Impact
Investing and Green Finance. <strong>The</strong>y <strong>impact</strong> our
lives by mitigating climate change as well as
energy dependencies and demand action
from everyone. As a result, 56% <strong>of</strong> German
intermediaries believe we will not achieve
the Sustainable Development Goals (SDGs)
by 2030 unless future UHNW individuals help
close the private sector financing gap by
investing alongside institutional investors.
This is slightly higher than the global average
<strong>of</strong> 55%.
France 60%
UK
Asia
Middle East
USA
Germany
Switzerland
Austria
0%
60%
57%
56%
56%
56%
52%
35%
55% Avg
100%
Additional findings
62 %
<strong>of</strong> UHNW individuals in Germany make ESG
investments with the aim <strong>of</strong> making a difference,
compared to 66% globally. <strong>The</strong>se can range from
more sustainable investments, innovations to reduce
carbon emissions and waste, and new technologies
to reduce carbon footprints and increase efficiencies
for their properties.
68 %
believe that ESG investments will be central to
growing their future wealth, potentially with a higher
return than other investment opportunities. This is
lower than the global average <strong>of</strong> 74%. In Germany,
there could be slightly more hesitance here than in
other areas <strong>of</strong> the world, as UHNW individuals in the
region prefer to wait for more EU guidance, regulation
or tax implications, in addition to the SDGs set.
65 %
Germany proved to be very active in helping to tackle
the COVID-19 crisis, with organisations developing
vaccines and fast tracking the production <strong>of</strong> masks.
So it’s no surprise that 65% <strong>of</strong> UHNW individuals in
Germany want to use their wealth to help mitigate
the <strong>impact</strong> <strong>of</strong> a future pandemic – it is however lower
than the global average <strong>of</strong> 73%.
6

0.000000 16.666667 33.333333 50.000000 66.666667 83.333333 100.000000
Market focus on Germany
Key findings (continued)
<strong>Wealth</strong> barriers and drivers
Today’s UHNW individuals are active, opportunistic wealth creators, not afraid to
go against the grain. But against a backdrop <strong>of</strong> increased legislation, geopolitical
threats and economic volatility, many are struggling to protect their wealth.
Germany has seen a significant
increase in the foundation <strong>of</strong> family
<strong>of</strong>fices over the last few years, and
the results from individuals surveyed
emphasise the <strong>impact</strong> <strong>of</strong> this in the
market further. 95% <strong>of</strong> Germany’s
wealthiest describe themselves as
active wealth creators identifying
their own investment opportunities
to grow their wealth, whereas only
5% leave their wealth management
to experts. This was the joint highest
market, along with the US. Globally,
91% <strong>of</strong> UHNW individuals identified
as active wealth creators and 9% left
their wealth management to experts.
Germany
Middle East
Switzerland
USA 95%
Austria
France
0%
100%
Additional findings
62 % 72 %
UK
Asia
95%
92%
90%
88%
87%
87%
87%
91% Avg
UNWH individuals need to anticipate any potential
future changes to their international diversified
wealth. 62% <strong>of</strong> UHNW individuals in Germany are
considering the effect that geopolitical issues can
have on their wealth and proactively seek advice
to protect it from those <strong>impact</strong>s, but this is lower
than the global average <strong>of</strong> 67%.
Transparency is emerging as one <strong>of</strong> the most serious
barriers to wealth creation. 72% <strong>of</strong> UHNW individuals in
Germany cited reputational issues as a challenge to
protecting their wealth. While this is slightly lower than
the global average <strong>of</strong> 74%, issues from misconduct
at company level or disputes with other investors
or disputes within their own family should still be a
consideration for protecting their wealth.
7

Market focus on Germany
Succession planning for UHNWIs can be extremely
complex, as the family and assets are <strong>of</strong>ten highly
internationalised. This has the effect that a large
percentage has to take geopolitical developments
and issues into account when making their decisions.
Dr. Holger Schrewe, LL.M. (London) | Partner
Taylor Wessing, Hamburg, Germany
We see that our clients are active wealth creators. <strong>The</strong>y
develop their family business further, building market
leaders with acquisitions or by creating an innovative
business on their own.
Dr. Lilian Klewitz–Haas | Partner
Taylor Wessing, Munich, Germany
8

Market focus on Germany
To view our <strong>World</strong> <strong>Shaping</strong> <strong>Wealth</strong> report and for more
insights across other markets please click below.
Methodology
This global study - <strong>World</strong> <strong>Shaping</strong> <strong>Wealth</strong>: <strong>The</strong> Impact <strong>of</strong> Affluence on the Next Economy - explores
the <strong>impact</strong> that UHNW individuals want to have, what is motivating them, and the actions they are
taking to achieve their goals. Within this research UHNW individuals are defined as having a net
worth <strong>of</strong> at least $100 million.
Independent opinion research was conducted in late 2021 among 215 UHNW individuals, with an
estimated combined wealth <strong>of</strong> over $69.4 billion, and 225 <strong>of</strong> the intermediaries who manage their
wealth (private banks, multi-family <strong>of</strong>fices, single family <strong>of</strong>fices and fiduciary providers).
Respondents were based in Austria, China, France, Germany, Kuwait, Saudi Arabia, Singapore,
Switzerland, the UAE, the UK, and the US.
9

Market focus on Germany
Contacts
Dr. Martin Bartlik,
LL.M. (McGill)
Partner, Frankfurt
Pr<strong>of</strong>. Dr. Jens Escher,
LL.M.
Partner, Duesseldorf
Dr. Axel Godron
Partner, Munich
Dr. Klaus Grossmann
Partner, Duesseldorf
+49 69 97130-125
m.bartlik@taylorwessing.com
+49 211 8387-250
j.escher@taylorwessing.com
+49 89 21038-179
a.godron@taylorwessing.com
+49 211 8387-230
k.grossmann@taylorwessing.com
Dr. Lilian Klewitz–Haas
Partner, Munich
+49 89 21038-492
l.klewitz@taylorwessing.com
Olaf Kranz
Managing Partner, Duesseldorf
+49 211 8387-288
o.kranz@taylorwessing.com
Martin Kraus
Partner, Munich
+49 89 21038-235
m.kraus@taylorwessing.com
Dr. Cornelia Maetschke-
Biersack
Partner, Duesseldorf
+49 211 8387-217
c.maetschke–biersack
@taylorwessing.com
Dr. Joachim Mandl
Salary Partner, Duesseldorf
Dr. Carsten Müller, LL.M.,
Maître en Droit
Partner, Duesseldorf
Clemens Niedner
Partner, Frankfurt
Dr. Alexander Peinze
Partner, Hamburg
+49 211 8387-421
j.mandl@taylorwessing.com
+49 211 8387-280
c.mueller@taylorwessing.com
+49 69 97130-142
c.niedner@taylorwessing.com
+49 40 36803-123
a.peinze@taylorwessing.com
10

Market focus on Germany
Contacts
Dr. Tillmann Pfeifer
Partner, Hamburg
Dr. Maraike Ruhe
Salary Partner, Duesseldorf
Dr. Elisabeth Schalk
Salary Partner, Munich
Dr. Holger Schrewe, LL.M.
(London)
Partner, Hamburg
+49 40 36803-1315
t.pfeifer@taylorwessing.com
+49 211 8387-426
m.ruhe@taylorwessing.com
+49 89 21038-227
e.schalk@taylorwessing.com
+49 40 36803-143
h.schrewe@taylorwessing.com
Hassan Sohbi
Partner, Frankfurt
+49 69 97130-375
h.sohbi@taylorwessing.com
Pia Thress, Maître en Droit
(Paris II)
Salary Partner, Munich
+49 89 21038-216
p.thress@taylorwessing.com
Hermann-Ulrich Viskorf
Of Counsel, Munich
+49 89 21038-207
h.viskorf@taylorwessing.com
Robert Wethmar,
LL.M. (NYU)
Partner, Hamburg
+49 40 36803-218
r.wethmar@taylorwessing.com
11

2000+ people 1100+ lawyers 300+ partners 29 <strong>of</strong>fices 17 jurisdictions
Austria
Belgium
China
Czech Republic
France
Germany
Hungary
Netherlands
Poland
Republic <strong>of</strong> Ireland
Slovakia
South Korea
UAE
Ukraine
United Kingdom
USA
Klagenfurt | Vienna
Brussels
Beijing | Hong Kong | Shanghai
Brno | Prague
Paris
Berlin | Duesseldorf | Frankfurt | Hamburg | Munich
Budapest
Amsterdam | Eindhoven
Warsaw
Dublin
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Dubai
Kyiv
Cambridge | Liverpool | London | London TechFocus
New York | Silicon Valley
* In association with DR & AJU LLC
© Taylor Wessing LLP 2022 | 2201-001966-02-04-GE-2
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