Another day, another billionaire leaving the UK: what does it mean for family office recruitment?
The UK has long been regarded as a safe and sophisticated base for global wealth and family offices. However, recent political and fiscal developments are prompting a number of ultra-high-net-worth individuals (“UHNWIs”) and families to reconsider their presence in the country. Of particular note is the growing list of billionaires choosing to relocate and we ask what impact this will have on the family office recruitment landscape in London/UK. Analysis by Henley & Partners, suggests 78 centi-millionaires and 12 billionaires left the UK in 2024.
Barely a day goes past when there isn’t a headline about another billionaire leaving the UK. The recent “Sunday Times Rich List” (“Rich List”) witnessed a further reduction in billionaires this year to 156 but more significant is the fact that this was the third successive year of decline in overall wealth and fall in the number of billionaires in the UK – unprecedented in the 36-year history of the Rich List. Many leaving the UK have pointed to the unfavourable non-dom legislation initiated by the previous Conservative administration and there is no doubt that the ending of this 225 year old legislation is a key consideration.
Other headwinds (all self-inflicted) have not helped. The Labour government’s inheritance tax plans will make the United Kingdom the most expensive place in the world to die – not exactly a recipe for retaining UHNWIs. We also cannot forget the influence of BREXIT. This has been a factor in families leaving albeit a slow burning one. As one head of a single family office said to me: “London has lost its glitter.” Remember London when it held the Olympic Games? Something intangible has been lost since then as BREXIT dominated headlines and political bandwidth for years. Many of my clients in overseas jurisdictions looked on aghast at what was going on.
Impact on Family Office Recruitment
I am aware of a number of family offices closing or downsizing their London/UK operations. Preferred locations include, among others, the United Arab Emirates (Dubai and Abu Dhabi), Italy, Switzerland, Monaco and the Channel Islands. Italy is seen as an increasingly attractive option for families leaving London with its revised lump sum tax regime. One CEO of a single family office commented to me that most of the families she knew had either left the UK, seriously thinking of leaving or planning to leave. There will be opportunities emerging in these jurisdictions for family office professionals who are mobile.
However, this does not signal the end of the United Kingdom’s relevance. According to one recent report (“With Intelligence”), the UK/Ireland/Channel Islands/Isle of Man is home to a significant 9% of single family offices worldwide. The majority of established family offices will stay – London/UK is and will remain a major centre for family offices. A large proportion of those UHNWIs leaving do not have a formal family office entity in the UK – some will just have staff relating to their property portfolio and day-to-day administrative tasks.
Others who are exiting will continue with a family office presence in the UK as the infrastructure, advisory ecosystem, and quality of talent available (painstakingly recruited over years and with it, that all important trust) in the UK are not easily replicated elsewhere. Family offices with significant AUM will struggle to shut up shop in quick order – these things can take time to unravel and in some cases, a continued presence will be required to manage domestic investments, philanthropic interests, property portfolios or maintain operational continuity.
Whilst the UK does retain some distinct competitive advantages, new family offices may well think twice now before establishing a permanent base and this may impact recruitment. Family offices don’t exist in isolation; they rely on the stability, foresight, and long-term thinking of their host jurisdictions, something the United Kingdom has arguably lacked over the past few years.
How did we get here?
Some, including me, point to a deeper issue: the lack of commercial understanding in Westminster. The naivety of politicians is quite astonishing. Having met cabinet members and backbenchers during my twelve years’ experience as a councillor (for the London Borough of Richmond upon Thames), it doesn’t surprise me in the least. There’s no simple solution I’m afraid – with the odd exception, it never ceased to amaze me how many of the politicians I met were utterly clueless about business and lacked any “real world” experience – you only have to look at the current cabinet for proof.
While the UK’s professional services infrastructure remains world-leading, some policy decisions have raised concerns. The recent NIC increase is a prime example and the scrapping of VAT refunds under the previous administration for tourists was another poor decision although not on the scale of NIC in terms of impact. Without a healthy business environment contributing to the economy, most other things are secondary as improvement in public services cannot be afforded and the national debt increases alongside huge interest payments. Attracting candidates who do understand business and investment (paying our Members of Parliament more?) and simplifying the labyrinthine selection process might be a start.
The average person (e.g. not connected, well known, etc) who wants to make it to Westminster must, as a minimum, spend years canvassing, delivering leaflets, etc for their chosen party to have any chance of being considered for selection. For most, this is an impossible time commitment, thereby leaving an incredibly narrow cohort who can consider being a Member of Parliament. Does this qualify these individuals to be any good at the job and provide some desperately needed commercial nous in the House? I think you know the answer!
This article is written by Paul Avon, Founder of True House Partners. True House Partners specialises in recruitment for single family offices worldwide. For more information, please visit our family office recruitment pages on this website.