Switzerland’s boarding schools for the ultra-wealthy are helping the next generation learn how to manage investment portfolios, as are large private banks.
Swiss banks and boarding schools are paving the way to educating the next generation of ultra-high net worth individuals (UHNWI).
These institutions are increasingly helping young people learn portfolio management, and it is now part of the curriculum at many boarding schools in Switzerland.
Additionally, Next Generation analyzes topics such as inflation, interest rates, and the stock market.
“In our experience, next-generation clients need to be included in important conversations with their parents and other elderly family members as soon as possible about their expectations regarding asset transitions and inheritances,” says UBS Global Global said Viola Werner, Head of Next Generation Solutions. Wealth Management (GWM).
“Financial confidence is growing, in part because the ‘next generation’ is willing to learn from each other by sharing experiences such as first investments, first failures and common pitfalls. That’s what we’re seeing,” she added.
UBS says it operates several educational programs and provides access to the next generation. Since 2014, the Swiss bank has been organizing investment games, market trend simulations and money psychology sessions to help the next generation share the experience of talking about money as a family.
In addition, UBS will set up one-on-one sessions with the next generation before major programs.
“These platforms, which provide benchmarking and shared learning experiences, are an opportunity to test and learn outside of the family environment,” says Miss Warner.
“The next generation of ultra-high-net-worth individuals is much more sophisticated and educated earlier in life,” Ms. Wenner says of her experience over the past 20 years. “For example, in 2010, the average UHNWI NextGen participant would have had basic financial knowledge, but now most participants have already set up their own portfolios and have no idea what kind of impact they can create. “I have my own views on what I want to do,” she explains.
This next generation of new cohorts prefers “practical insights” and “personalized content” as well as a “collaborative” approach to learning, rather than standard lecture formats.
“Today, there is also a high demand for reflecting the psychological aspects of dealing with money, wealth, family relationships, and the personal growth of the next generation,” Ms. Warner said.
back to school
Switzerland’s boarding schools for the ultra-wealthy also play a role.
“Educational access is no longer available to all students,” said Bernhard Gademann, chairman of Switzerland’s elite boarding school Institut auf dem Rosenberg. The boarding school caters to some of the world’s wealthiest families, with annual tuition exceeding $160,000. “Finance is not talked about in school. No one really talks about finance, no one talks about investing, no one talks about very basic principles,” he emphasizes.
At Rosenberg, financial learning begins at age 12. Gademan says his school aims to touch on the fundamentals, from what the stock market is to why people invest. Eventually, students move on to more complex topics such as exchange-traded funds.
Mr. Gademan’s students manage a hypothetical $1 million portfolio. This virtual portfolio introduces students to a variety of asset classes. You also have the option to add positions to this portfolio and analyze the performance of each asset class.
“Sometimes there is no movement, but sometimes something interesting happens. In those cases, the choices are also discussed in groups, so students can reflect on their decisions and also incorporate feedback from their peers. ,” says Gademan. “Students who know little about finance tend to do very well. Why? They are more reluctant to invest,” he argues.
For Gademan’s students, topical investments such as health care, water, and sustainability are at the forefront. Cryptocurrency is a popular asset class.
Other schools in the region also claim that cryptocurrencies are a hot topic among young people.
Parents also participate in curriculum development. “We think they are the best sounding board for new ideas,” says Gademan. “In conversations with parents, they point out current challenges and gaps in education,” he added.
One of Mr. Gademan’s goals as principal is to ensure that young people are “sufficiently knowledgeable” so that they can “have a conversation with their parents.” He believes that learning from parents is very beneficial.
Gademan believes it will not hinder students, but emphasizes the threat of economic influencers to young generations. “This is an area of concern because it’s a vacuum that’s being filled simply by a lack of education or a lack of understanding of what can reasonably be expected,” he says. “If you look at social media and get the impression that 20% or 30% profits every year are normal and have been going on for a long time, and that people who can’t make it are losers, then you “There is a lack of information,” he added.
A FINRA study found that more than 60% of U.S. investors under the age of 35 rely on social media for investment information, and 57% rely on financial professionals.
“There’s a lot of wealth that can be created without going down the slippery slope of people promising all sorts of things on social media,” he says.
next generation concerns
A study conducted by Swiss bank Lombard Odier and Capstone Millennials identified five key topics that young people are concerned about. Those topics are sustainability, investment engagement, challenging the financial analysis presented, better communication, networking and knowledge.
“The next generation wants to understand investment opportunities and appreciate an educational perspective,” said Duncan McIntyre, Lombard Odier’s global UK regional director, when discussing knowledge concerns. said.
He also added that the next generation wants investments that are “aligned with their values,” especially when it comes to sustainability. They like to “measure” and “understand” the effectiveness of their investments.
Technology is also a key focus, with Lombard Odier’s research showing that the next generation is setting up better stores based on the bank’s online image, electronic reputation and ease of contacting the bank via digital channels. It became clear. “This means our digital presence must be cutting-edge and competitive.
“The next generation does not want a digital-only relationship with their banker, but they do appreciate human contact for issues that require careful consideration and discussion,” he says.
Swiss Bank holds a “flagship event” known as the LO Generations Summit twice a year. The company claims this is a core element of its next-generation offering. “During the multi-day event, we invite next-generation clients from around the world to interact with innovative entrepreneurs and global thought leaders and network among their peers,” said McIntyre. states.
The bank says the event will allow customers to share their experiences and generate ideas.
In the intervening years, the bank has held a series of community events as part of its LO Generations program, which McIntyre says aims to “connect the next generation in an engaging context.” .
