Traditionally, most private bank customers have been on the older side; the banks’ interaction with the younger generation used to be limited to maybe some seminars on succession planning. But as the current younger generation starts to take control of family wealth, those banks have discovered that their needs and priorities are different, and that the banks need to work a lot harder to engage them.

As a result, over the past decade or so private banks have developed suites of so-called next-generation programmes with the aim of deepening their involvement with such customers. The aim is to go beyond offering financial advice, partnering with clients in building their careers and training them for future leadership, and also to plug into the sorts of subjects they’re most likely to be passionate about, which these days often means investing with a social or environmental impact.


For private banks, this is both a threat and an opportunity. On the one hand, millennial customers are used to being saturated with information, are less likely to trust the advice of traditional financial institutions, and take a bit more convincing of the value of a private bank. “It is a challenge for all banks,” says Christopher Blum, Asia head of investments for JP Morgan. “Any private bank or other financial institution out there that doesn’t recognise that the way this generation acts is materially different from any other generation is going to be in trouble.”

On the other hand, next-generation programmes provide a chance for banks to find out more about the clients’ needs, and also to gain a deeper level of engagement with customers, involving themselves in areas of their lives, like leadership and career planning, that they weren’t involved with before.


Steven Lo, Asia-Pacific regional head of Citi Private Bank, which was a pioneer with its Next Gen programme, says that programme has become more holistic over time as client demands have evolved. It has also launched special events, including the Foundations Conference, concerning family wealth and legacy; the Frontiers Conference, about disruptive technology; and the self-explanatory Empowering Leaders Program. In all cases, says Lo, the real power of the events is in the relationships they help to foster.

“We look for continued engagement with attendees post-conference and communicate with them on an ongoing basis,” he says. “They are invited to many of our events throughout the year, and often they come with alumni from a particular conference they attended because their relationship continued after the programme ended.”


Credit Suisse operates a particularly broad range of activities, including its Young Investor Program, Young Investor Organisation, Young Founders School, Family Ties Program, Family Office Forum, and Philanthropists Forum. The aim, says François Monnet, head of Greater China for Credit Suisse Private Banking Asia Pacific, is to partner with clients at every stage.

“We aim to provide not just a one-off experience but rather a continued journey, from setting the foundation of an entrepreneurial education when they are at school age, to preparing them in inheriting their family business and helping them and their family manage wealth transfer and succession planning or leaving legacy,” he says. “These programmes help the next generation to feel more confident in asking the right questions and dealing with finance, helping to better prepare them for the responsibility of running the family business or managing the family’s wealth.”


Jan Boes, who as head of UHNW positioning at UBS Wealth Management Asia Pacific leads the bank’s next-generation programmes in the region, agrees that the initiatives help to build connections both with the bank and between different participants. UBS’s suite includes the four- day Leadership Excellence and Development Series Certification Program, a generalist course aimed at graduates; the Second Generation Organization, aimed at elite next- generation successors in business families; and the 20/20 Social Impact Leaders Group, for 25-35-year-olds, about philanthropy or social investments.

“If you want to develop a relationship with someone, I think that is something that only develops over a period of time,” says Boes. “These programmes are definitely an answer to that. People can meet three or four times a year in an organised setting, and then interact more regularly on specific projects. “We want to be a partner for the younger generation to find their purpose—to really be there for them as a mentor. If you look at the content we’re providing in these programmes, it’s not only focused on investments; it’s also about topics such as leadership, entrepreneurship, family governance, and topics related to their passions.”

Because a lot of issues are universal—and because people rarely like discussing their issues with their local competitors—the regional or global nature of the groups can make the sharing aspect particularly valuable for participants, he adds. “A lot of clients are trying to build a legacy over the generations and a lot of them face the same issues,” says Boes. “Families really appreciate being able to share challenges and best practice from around the world. We help in identifying values for the family and use that to design a family legacy.”


For the younger generation, that legacy often involves impact investing in passion projects, from sustainable products to green energy to education to affordable housing. “This generation don’t always want to get as directly involved in investments as previous generations, but the area where we get by far the most engagement is sustainability and social impact,” says Blum of JP Morgan.

“Next Gen care deeply about sustainability and climate change,” agrees Kevin Herbert, managing director and co-head for North Asia for HSBC Private Banking. “Starting last year we are engaging clients through the Sustainability Leadership Programme, which was originally developed as an internal training curriculum for senior leaders within HSBC, but which has since expanded to include suppliers and clients,” he says. An immersive experience, it includes a week-long trip to the Borneo rainforest.

Whatever the priorities of different generations, the aim of all these programmes is to get all the generations singing from the same song sheet. Says Monnet of Credit Suisse: “We find that in many Asian families, while the current-generation family leaders tend to be more local, traditional or orthodox by virtue of their own life experiences, the next generation have in many cases been sent away to be educated and professionally trained in some of the best institutions globally and are therefore willing and able to bring new perspectives into the family businesses.

“Families that are really thoughtful about such differences consider them in the perspective of generational timeframes. This allows them to see the old as the best of legacy, inspiration and experience, and the new as the best of a willingness to explore and the energy to pursue.”


See Also: How World's Richest People Are Changing The Nature Of Philanthropy

Tags: Wealth, Leadership, Invest, PrivateBanking