Super-rich warned of ‘pitchforks and torches’ unless they tackle inequality
In the ballroom of the five star Savoy hotel on the Strand in central London, the super-rich and their advisers were this week advised that they may soon need to watch out for people with “pitchforks and torches” unless they do more to use their fortunes to help the millions struggling with the cost of living crisis.
At an investment conference organised by Spear’s wealth management magazine, members of the global elite and their financial teams were told by progressive advisers that there was a “real risk of actual insurrection” and “civil disruption” if the yawning inequality gap between rich and poor was allowed to widen as a result of energy and food price hikes hitting squeezed households.
Julia Davies, a founding member of Patriotic Millionaires UK, a group of super-rich people calling for the introduction of a wealth tax, warned that global poverty and the climate emergency were going to get “so much worse” unless the wealthy did more to help poorer citizens.
“Everyone can say it is somebody else’s responsibility,” Davies said. “But it is the wealthiest in society who are the people who can actually really do something about it.
“Unfortunately, it is the wealthiest in society who are right now advocating to slow down the pace of tackling these huge issues. Maybe they think that they are going to be OK. I don’t honestly believe they are, and I definitely don’t think their kids and their grandkids are going to be OK.”
She told the audience of about 500 members of the global super-rich and their advisers they had the opportunity to be “the heroes”.
“You guys could be part of the turning point that protects your children, your grandchildren and your client’s children and grandchildren. Isn’t that worth something?”
Alexandra Loydon, the director of partner engagement at the wealth management firm St James’s Place, asked the audience to look around the Savoy’s 113-year-old Lancaster Ballroom and “at the level of wealth collectively in this room”.
“[The wealth] that we manage, and the impact that we could have, that is absolutely enormous. And, I do genuinely believe that we all have a role to play and not just in facilitating what the next generation of clients want, but educating the current generation of clients as well.”
Clare Woodcraft, a fellow at the Centre for Strategic Philanthropy at the University of Cambridge, said wealthy people’s philanthropic efforts had a “bad reputation” because the industry was “poorly understood, poorly executed and poorly regulated”.
“There is often, unfortunately, too much focus on the passion behind philanthropy and the feelgood factor and not the actual need,” said Woodcraft, who works as an adviser to the super-rich. “Philanthropists are all too keen to jump in when they surmise that there might be a need, without actually having the data.”
She said many rich people wanted to set up their own educational or health foundations without checking whether there was a need or an existing charity or government-funded programme working to address the issue.
“I still see way too often family offices that come to me and say: ‘We want to do education, we want to set up a foundation and we want to do it in market X’,” she said.
Woodcraft said in these cases she would ask the family for their rationale, only for them to reply: “It doesn’t matter. Let’s just get some quick wins, let’s get the money out there.
“That is the challenge. We need to step back, and have a clear methodology for investing philanthropic capital, because that’s how you’re going to maximise impact and hence mitigate some of the risks of reputational damage.”