On a recent summer night in New York City, a group of about 30 young adults, ages 20 to 30, went to the Studio Museum in Harlem to hear about the impact that art is having on the community, followed by dinner at famed neighborhood restaurant Red Rooster Harlem. The following night, the same group visited the New York headquarters of charity: water, a non-profit working to provide clean water around the world, followed by a party at the loft offices of Urban Zen, Donna Karan's philanthropic program.
It was not your average tour of New York, and the attendees were not your average 20-somethings. They were all either existing young clients of or members of ultra-high net worth families whose parents are clients of UBS Wealth Management Americas. The tours were part of the second annual Young Successor Program, an initiative by UBS to lure or retain young clients who are on the brink of controlling vast amounts of wealth.
The three-day event includes sessions on everything from investing basics to philanthropy. The setting provides UBS's young and prospective clients with the opportunity to interact with peers who are like them. The minimum total personal or family net worth to qualify for the event is $50 million. The ultimate goal is to strengthen these current and potential clients' ties and hopefully establish a relationship that will last for decades to come.
The U.S. version of UBS's program was inspired by the firm's Zurich headquarters, which has hosted a similar program for seven years. UBS hopes the program will allow it to better compete with its peers, which have long-standing young investor programs. Credit Suisse's young investor program is in its 10th year and Citibank Private Bank's initiative is in its 11th year.
"Focusing on the next generation is a business imperative for Credit Suisse and all of the financial services firms," says Bill Woodson, co-head of Credit Suisse Private Banking Americas ultra-high net worth business. "These are truly our clients of the future and we need to be able to get to know them and allow them to get to know us. We need to learn from them how they would like us to serve them."
Credit Suisse will host its next Young Investor Program this month in Zurich, one of two per year. Participants either have or are from families that have $100 million or more in assets. The five-day agenda for the August event includes lessons from the firm's senior executives and professors of the University of St. Gallen in Switzerland on topics like understanding various asset classes and the psychology of money.
The event is divided into three sections, split evenly between education, family governance and networking/social activities, according to Woodson. Credit Suisse also recently hosted a young investors' forum on philanthropy solely for U.S. families. All its forums encourage open conversation, Woodson says, so the firm can understand the kinds of services younger clients want.
Citi Private Bank's Global Next Generation program wrapped up its weeklong NextGen 2013 programs in New York, London and Singpore earlier this summer. The programs focus on growing a family business and entrepreneurship, says Money K., head of Citi Private Bank's Global Next Generation program. (A Tamil Indian based in Singapore, K. is the first letter of his long surname.)
Citi's New York program included a mock art auction at Christie's and conversations with successful family business owners and entrepreneurs. The program is open to the children, aged 20 to 30, of Citi Private Bank clients with a net worth of $25 million and over. The program includes courses on investing, wealth transfer and inheritance, family legacy, succession planning and philanthropy. More importantly for Citi, it lets the firm connect with both parents and their children.
"The bankers love it because it's a nice thing to offer parents. It deepens our relationship with them," Money K. says. "The program also shows how Citi can help the children and begins the process of building a professional relationship so when the time comes, they will think of Citi as their bank of choice," he says.
Citi doesn't share how many new clients this program has generated. But it does say the program has helped the firm retain its existing clients, the parents of attendees.
The three-day UBS program includes current and potential clients, says Judy Spalthoff, head of business development for the firm's Private Wealth Management and Wealth Management Advisor Group. After an optional half-day financial literacy course, the program offers an advanced session on asset allocation by the firm's professionals. Financial advisors are allowed to attend earlier sessions, but they are barred from later sessions on leadership and philanthropy, at which attendees are left to themselves to forge new bonds. Last year's group has a Facebook page, Spalthoff says, and attendees have traveled together or considered starting businesses.
"They're a special group with privileged backgrounds, and just having the threshold of $50 million and above guarantees they'll have a lot more in common," Spalthoff says.
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