Banks are helping to smooth the process of wealth moving from one generation to the next
'Catch them young' has long been the marketing ploy of fast-food chains and theme park operators, and certain private banks are now using similar tactics.
'We try to encourage the parents to involve the kids,' said Michael Troth, managing director and head of global wealth structuring for Citi Global Wealth Management Asia-Pacific, explaining some of the discussions about succession planning. 'You don't have to tell them how much they are going to get and when, but it helps to discuss the psychology of money, particularly when the children are fairly young.'
In this context, young usually means anything from early 20s to mid-30s, and the basic aim of the bank is two-fold. Firstly, to 'coach' the parents so they understand the methods and structures to put in place so that wealth, when passed to the next generation, helps rather than harms. Secondly, to ensure those inheriting are prepared to deal with the responsibilities - not to mention the assets - one day coming their way. 'We are finding that parents are more willing to engage us and their kids in these discussions,' Mr Troth said. 'Some are very open and transparent and the children come to meetings.'
Complementing that, Citi also runs regular 'next generation' conferences. At these, the scions of wealthy families attend lectures and workshops on topics as varied as equities, foreign currency, the latest trends in capital markets, and even the finer points of public speaking. It is all seen as part of the process of building long-term relationships.
'Yes, they know they are wealthy, it is what they are used to,' Mr Troth said. 'But they may not have been prepared for dealing with everything when it is theirs.'