Fossil fuels, family values and forward planning: PWM Tea Break

Family office, charity and foundation expert Juliet Valdinger speaks with PWM about advising clients on succession planning, ethics and investment priorities which differ vastly between generations.

Speaking with PWM's Yuri Bender and Ali Al-Enazi over cups of tea, Ms Valdinger talks about the challenges of communication and dialogue between age-groups, how a family legacy can be assured and why disastrous consequences can result from families which lack a sense of purpose.

The discussion also addresses the need for authenticity when branding investment management firms, the fast-changing parameters of ethical investments and how family members' views of celebrity business figures can lead to portfolio positions being liquidated.

Ali Al-Enazi: Hello and welcome to this week's Tea Break. I'm Ali Al-Enazi, joined today by PWM Yuri Bender and Juliet Valdinger, an expert advisor to family offices, charities and foundations on philanthropy and impact investments. Juliet, how are you?

Juliet Valdinger: Thank you for having me.

Ali Al-Enazi: Last week, our guests went for a coffee. So I'm gonna have to ask you, have you gone for the tea?

Juliet Valdinger: I've gone for the tea. If I have a coffee, I'm gonna talk so fast and so much, it'll be longer than a few minutes.

Yuri Bender: It's a nice cup of Chinese green tea, which I'm enjoying today — with the sad news that our readers and viewers in the US, they will struggle to buy high-quality tea and coffee in the future due to the tariffs likely to send these commodities skyrocketing. President Donald Trump is clearly thinking about his family succession, with his sons Eric, Don Jr, daughter Ivanka, all in the frame. And of course, there's the son-in-law, Jared Kushner.

Juliet, you've been working on the STEP report for family inheritance. It mentions the anguish, the procrastination, the avoidance of succession issues. When you're giving advice to these high-level, often colourful families about these inheritance and succession issues, how do you begin this conversation?

Juliet Valdinger: Well, I think, first of all, the STEP report is fantastic. It is so packed out with information, and one of the points it really identifies is the lack of communication in the families — it's such a big problem, and it has been for ages.

And really, if you're going to talk about values, it's big, like airy, fuzzy kind of words — and succession and legacy is more associated with the principal passing on and how we're going to survive. And so, really, using philanthropy as a toolkit, it gets everybody around a table. There's still values as quite abstract. So think about what are your motivations of giving?

So we've, you know, got £100 million for philanthropy. What motivates you? What interests you? What articles do you read? Are you interested in AI or climate change? I was talking to an heir in waiting, as it were, the other day, and she was explaining that they know all this wealth will come, but her and her siblings were both given a million pounds in their twenties as a present.

Her brother is now a drug addict, her sister is going through all sorts of trauma because they've completely lost any form of self-identity, self-purpose, self-ownership. And if the family had come together about a purpose, a reason, a mission, it just gets everybody on the same playing field.

Yuri Bender: Ali, you've been delving very deeply into these family dynamics in your last article, and you spoke to the head in Zurich of the Centre for Sustainable Finance and Private Wealth, Dr Falko Paetzold, who is also affiliated with the University of Zurich, and discussed the science of studying family dynamics. What did the good doctor tell you?

Ali Al-Enazi: Wealthy investors must shift from scattered impact portfolios to systemic investing — in understanding and influencing entire systems for meaningful change. That is, institutions like LGT support this shift by encouraging education, co-decision-making and thematic ownership among next-gen holders.

And Juliet, your STEP report reveals lots of talk about social responsibility, but very little action. Do you feel that families you advise are also looking for a much more systemic approach to philanthropy and impact investing?

Juliet Valdinger: Another example — I was talking to an inheritor who's got some money to their foundation, and he's very into climate change, and he's investing his money through climate change investments.

However, he is having to manage that a lot of his inheritance is still being managed by his father, and a lot of it's going through fossil fuels, and he completely disagrees with all the inheritance that's coming. So how does he manage the emotional baggage of parents? Here's an inheritance, here's how you could use it. But we're actually going to get you more money by doing things you disagree with.

We've still got the Baby Boomers, you know, following what they wanted — to generate wealth for the next generations, full stop.

Yuri Bender: I mean, this interaction between the generations is absolutely crucial at every level of society, in every country.

And Ali, you're really churning out the articles and videos at the moment, and we were all watching your studio interview with Özge Doğan, a young lady from Turkey who runs one of the country's largest family offices, Karman Beyond.

And obviously we've seen the challenges in Turkey, where there's the younger generation out on the street. They've got different values to the older generation there — politically, socially. What was she telling you about the values and attitudes of different age groups?

Ali Al-Enazi: She emphasised the next generation's desire for flexible, value-aligned financial models, a greater role in decision-making, and preserving family legacies.

Turkish youth, she says, are ambitious, adaptive and ready to innovate different wealth strategies. Let's have a look and see what she says.

It seems clear that when there is no agreement found between generations, it can lead to people on the streets and a potential revolutionary situation. Do you think most societies are aware of problems caused by lack of dialogue between the next gen and their parents and grandparents?

Juliet Valdinger: Tailoring the question about, you know, the wealth holders and their society, there is a big difference, and it comes back to generations wanting different things.

I mean, I don't — you know, Patriotic Millionaires, big organisation — and I don't know how many of their fathers or principals agree whether they're trying to advocate for us to pay more tax, but that matches their values and everything else.

And so there is a dialogue change between the generations. And people do know about it — they really just struggle to understand how to communicate between each other to address the problems that they wanted.

Ali Al-Enazi: And of course, when we look at these generational values, Yuri, related to investments, they change significantly. What have you found recently about these changes?

Yuri Bender: Well, it's an area that I've been covering for quite a long time — as you can see by my grey hairs. And I think there used to be this hair dye, Grecian 2000. One of my friends said to me, you've obviously been using the Grecian 1000, but it hasn't been working too well.

It was all about avoiding gambling stocks, about avoiding investment in weapons. And I think that's really changed significantly.

Ali, the dual-use technology now — which is used in peacetime and then adapted for wartime use — we've really seen that in Ukraine with the drone technology. If you're helping a society like that defend itself, why should that not be ethical? Why should that not be a socially responsible investment?

And of course, we've seen countries such as China — they've come in and out of the acceptable bucket. They're slowly coming back in now that the US president is alienating so many investors, so it can be quite a cyclical discussion.

And Ali, you've worked with our RIBI in Switzerland, which has ranked portfolio managers according to their ethics and their branding. Which have been the leading firms this year?

Ali Al-Enazi: Well, the Responsible Investment Brand Index reveals a major shift in asset management. Firms are expected to go beyond basic ESG compliance and authentically embed responsible investment into their identity.

DEPAM tops the index, emphasising sustainable investing as its core philosophy. Pictet is also praised for its long-term auto strategy. And Nuveen, the only US firm in the top ten, highlights fifty years of responsible investing leadership.

Yuri Bender: And a lot of female chief investment officers and heads of sustainability, which is very interesting.

Ali Al-Enazi: Yes, indeed.

And Juliet, we're finding that investment firms simply reacting to the latest ESG trends or meeting minimal compliance standards risk being exposed as inauthentic. You know, this call for authenticity in brand, in word, and in deed — is this central to your conversations with younger generations?

Juliet Valdinger: The world is going to change. They are the new clients. They're growing up on a planet that's falling apart, all the social issues and all the global crises we're facing.

They need to address what their clients want, or they're just not going to be sustainable. Everyone uses the word "sustainable" all the time, but if you want your company to survive, you need to tailor your work to your new clients.

Yuri Bender: Well, these new clients — it's something we've been looking at in an opinion piece from Alex Hughes, which I’ve just finished editing. And he's saying that the next gen — their decisions are informed by technology as well as social consciousness, and it's a tricky time for the next gen when their previously liberal heroes suddenly change their mindset and become more reactionary or conservative.

Do you encourage families, Juliet, to have conversations about these ethics and these values?

Juliet Valdinger: There has to be a reason why the family's going to talk about it. And if you have inheritors of wealth who invest in Tesla as part of the family, but then Tesla is one their parents are like, "Why are you doing this?" — but it brings everybody around a table as a topic of discussion.

So it feeds into family unity, family cohesion, and makes everybody feel valued and part of the group. And so that is a really good example of — this is a hiccup. Let's get around a table and discuss it.

Yuri Bender: And our values, Ali — they're not really changing here, because we really appreciate a good cup of tea.

Ali Al-Enazi: I mean, yeah — that's never changing, every week. Juliet, thank you so much for joining us.

Juliet Valdinger: My pleasure. Thank you for having me.

Ali Al-Enazi: Those tech bros and sisters will be in town for the PWM WealthTech Awards this May. For all the details, head over to the PWM website.

That's it from us for now. Thanks for joining this week's Tea Break. Don't forget to catch our weekly episodes on the PWM website or the YouTube channel. And if you've got questions for our guests or just want to dive deeper, you'll find everything you need online.

See you next week.

Further reading:

Wealthy families embrace systemic rethink to impact investing

Next-gen leadership and the future of wealth in Turkey: Family Matters

DPAM, CANDRIAM and Pictet embrace responsible investment branding

How private banks can win Gen Z clients with tech-led transformation

Attitudes to wealth