Wealth Blog | Private banker must seek their inner geek
The heady days of the early tech boom seem to be back. Increasing amounts of cash are sloshing through the world’s Silicon Valleys as the new generation of “technorati” launch, develop, and flog profitable technology start-ups. Apparently the cost of setting up an online business is 95 per cent less than it was in 2000. So even if you fail, the financial barriers to entry are so much lower and you can have several start-ups at once without losing your shirt. And you really only need one to fly, which brings me to private banking.
But those poor old wealth managers, doggedly focusing on family governance and succession planning and persuading their Ultra High Net Worth customers that philanthropy is much better for their souls than evading tax. Their work is even more cut out here, being a low tax regime, but I digress. As wealth research site Wealth X says, the private banking industry is now wondering how to appear valuable to these super-rich geeks, all in their twenties and probably viewing private banking as something from the dark ages.
If wealth managers can succeed, the rewards are high. According to Wealth X, the top ten most loaded technology entrepreneurs under 30 are worth US$25 billion (HK$154.3 billion) between them. They’ve amassed this cash by growing their own companies, mostly in the decade since the dotcom bubble burst and sent them scampering back to their drawing keyboards. Some of them were still in nappies back then. These include names such as Facebook’s Mark Zuckerberg (aged 29, with assets of US$17.3 billion (HK$106.8 billion), Dustin Moskovitz of Asana (aged 29, with a net worth of US$4.2 billion (HK$26 billion), and Christopher Hughes of Jumo, (also 29, with a fortune of US$950 million (HK$5.86 billion). All figures courtesy of Wealth X.
Wealth managers get with the program
These guys all know how to run lean, mean companies, and as the website suggests, private bankers might appear “stuffy, old-fashioned and expensive” to them.
Wealth X says the wealth managers who win in the “technopreneurial” space must be nimble, have access to quick funding, a flawless digital and social media interface, provide introductions to wealthy investors, give forward-thinking estate and tax planning advice, and – have access to investment banking for initial public offerings. And they must deliver value-for-money. Phew.