Old money vs new wealth: Four WMs’ client-centric formulas
By Jill Wong
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It is fair to say that all private banks and family offices with an eminent history were founded on old money. For these older-generation clients, preserving and growing their inheritances, succession and trust issues are key to the wealth management agenda.
Any old-school private banker will probably say the business is all about relationships – dining with clients, playing golf and being the trusted confidante.
But millennial clients, including social media gurus and tech entrepreneurs, have presented private banks with new challenges. Having the cutting edge technology to impress today’s tech-savvy clients is just the start.
Wealth managers are racing to build out the full service architecture, while tailoring their approaches to cater to the evolving needs of astute clients who are just as tuned into investments as their private bankers.
We asked five private banks and family offices how they tailor different approaches to service old-generation clients and millennial investors.
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Evonne Tan
Head of Barclays Private Bank, Singapore
Private banking is a people business and, as we focus on the UHNW segment, our approach will always be highly customized as we look to meet the needs of our clients. As client profiles and needs evolve over time, we also need to continuously adapt our approach to stay relevant.
Whilst in the past the typical UHNW client profile is one of the 1st generation business owner, we are starting to see this change in recent years. One of the key trends we see is the significant intergenerational wealth transfer that is taking place leading to many of the second or third generation stepping up to take over the reins in the business and/or managing of the family wealth.
Another more recent trend has been the emergence of young millennial multi-millionaires who have created immense wealth within a very short period of time in new economy industries such as tech, media, entertainment etc.
In customizing our approach to cover different types of clients, we need to focus on the 3Ps of People, Products and Platform.
People – Getting the right banker to cover the right segment of clients. This is a basic but often overlooked factor and oftentimes we see the same banker covering multiple generations of a family. It may be a better fit to get a younger banker to cover the next generation where common interests allow for better conversations and understanding of needs.
Products – Millennials may be passionate about different topics such as sustainability, impact, fintech etc. We need to ensure we continuously innovate and curate the right kind of products and engagement topics with this client segment.
Platform – Millennials are naturally more open to embracing digital platforms and hence digitalization is a key focus to enable us to continue to stay relevant to this new generation of clients.
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Youssry Henien, Windsor Family Office
Chairman
Customizing the approach to meeting the needs of both the older-generation and millennial clients are indeed a challenge but can be solved with having an open mind. This strategy has defined my personal success and I recommend this to all advisors.
What we have witnessed during the ongoing global pandemic has been a big wake-up call to advisors, banks and of course the end client for the continuous need for scalable compliant technology solutions. This would be positioned to help support new and existing relationships.
Smart advisors and banks who digitally positioned themselves at the right time and with the right angle have most certainly reaped those rewards. As we all know, the future generation of growth depends on a very specific segment of consumers – millennials.
Of course, serving this segment of consumers we know there are many approaches. One of the trending approaches we frequently see is by building a brand that can create a personalized connection with the end client. Brand building if correctly established can be the foundation to the tapping into other growing consumer segments.
This scalable approach could be best formed and developed of course in partnership with compliance through digital means. For instance, a podcast with industry experts to talk about relevant subjects that may resonate well with the end client. Videos demonstrating ways to evaluate alternative investments and or the challenges of managing money held amongst multiple accounts in banks and in different jurisdictions.
Clients have a lot of questions and through a compliant digital front, many of those questions could be answered. Advisors should always have an open mind with the rapid changes we continuously encounter and strategize the right technology solutions when formulating their approach in serving their end clients.
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Gary Tiernan, Golden Equator Wealth
Managing partner
We recognise the different needs between clients of different generations, but what’s more important is our ability to lead good communications to truly understand their needs, perspectives, and our initiatives that help bridge the differences.
Our team of advisors and specialists brings deep, varied expertise, and diversity in culture, gender and age. This breadth allows us to connect with clients at different levels, whilst our multi-person engagement straddles the generational gaps.
In recent years, we have noted differing and passionate generational views on subjects such as cryptocurrencies, private investments, and frontier markets. Through private educational seminars for small numbers of family clients and their friends, we further facilitate healthy discussions and learning about these topics.
As a multi-family office, our mantra is to help clients preserve, build and enjoy their wealth for generations. One of the unique ways we do this is through our NextGen Programme. Detailed discussions involving the elder and younger family members help form a bespoke programme, designed for the growth needs of the NextGens.
The NextGens then work at Golden Equator to develop deep knowledge ranging from areas of wealth management, creating and managing an investment fund, etc. to elements of legacy planning including family governance, philanthropy, etc. working closely with their family members.
Through initiatives like this, we ensure frequent communications guided by our advisors that help enhance the ability to re-focus discussions towards common objectives of the family.
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Kenneth Ho, Carret Private Capital Limited
Managing partner and CEO
As with private banking in general, we spend a tremendous amount of time at the outset in terms of establishing both short term and long term goals and risk appetite.
These goals are actually quite varied across the region but we have found and a distinct pattern from families depending on which countries they are from and depending on which generation actually established the wealth of the family.
Within the family setting, we can generally categorise three key players: the patriarch, the family member and the family gate keeper. Each player plays an important role and we have to cater to each party within the framework when we set the baseline.
A. The patriarch is typically the key individual who establishes his wishes bar the outset. This individual(s) is typically the one who controls the entity as he was the one who sourced the wealth. As the source of the wealth is typically the key source of the overall risk, he/she would want to (a) want to take a more conservative approach to the management of that wealth, (b)establish structures for proper wealth planning and assignment to future generations and (c) ensure that the next generations are properly trained to mange that wealth.
B. The family members typically must operate within the frameworks set by the patriarch. They will be more concerned about their education and preparedness for the future. These individuals would tend to have more interests in looking at alternative assets such as Impact investing, ESG, charitable contributions and the like. The next generation want to figure out ways they can make an impact impact, and it’s the MFOs job to enlighten them.
C. Finally, MFOs have to work very closely with the gate keepers, typically full time employees focussed on the implementation of the family office structures. It is very important for MFOs to work closely with the gate keepers, some of which may be family members, to ensure a smooth transition for generations to come.
We spend a tremendous amount of time both at the outset and on a day-to-day basis to work with all the players to ensure long term satisfaction for the integrity of the family wealth.
Source: https://citywire.com/asia/news/old-money-vs-new-wealth-four-wms-client-centric-formulas/a1547909