Rich kids' boot camps return as private banks woo next-gen clients

Participants at an entrepreneur boot camp for next-generation clients hosted by the Bank of Singapore in May. PHOTO: BLOOMBERG

SINGAPORE – For years, Covid-19 froze one of private banking's best tools for keeping customers loyal – invite-only events for the children of wealthy clients. Now, as global borders finally reopen, they are starting to return.

In the bowels of Singapore's Ritz-Carlton hotel, 12 young people in grey hoodies sipping bubble tea could be mistaken for a university study group on first glance, that is, until you look down and see the Balenciaga sneakers and US$4,000 (S$5,700) Christian Dior book totes.

The sessions that include the nuances of crypto art are part of a week-long event run by the Bank of Singapore, one of those tentatively resuming physical programmes despite the awkward potential risk of infecting some of their richest scions.

Trillions of dollars in Asian wealth will likely shift to the next generation this decade as the region's elders – many of whom built businesses that dominate their respective economies – transfer their fortunes.

Financiers who fail to build loyalty among the affluent young and prove their value will likely lose out on lucrative accounts and access to deals.

Seventy-two of Asia's 141 richest people are older than 60 and have fortunes of US$1.1 trillion, according to the Bloomberg Billionaires Index.

For the banks, it is vital to get clients while they are young – the wealthiest clans will typically have several private banking relationships across the breadth of their personal and professional lives despite the added cost each one entails; demonstrating value and building rapport is key to keeping the account when the children take over or become independently wealthy.

The Bank of Singapore's "entrepreneur boot camp" in May was the first in a series of real world events slated for this year. Another is planned for October, with around 40 attendees expected – masks optional. Others are also gearing up.

Citi Private Bank has resumed group dinners in key cities and Lombard Odier is planning to hold its first physical next-gen gathering in Singapore within months. Outside of Asia, the banks say things are resuming more rapidly.

"We are not targeting next-gens where we think 'he's likely to get in the money and will probably open an account in the next two years'," said Ms Lee Wong, the Singapore-based head of family office services in Asia at Lombard Odier.

"It's more that we believe they come from a family that we either already have a banking relationship with, or a family we hope to build a relationship with and entrench it."

One big change for most banks as they return has been a decline in organised revelry. Where the Bank of Singapore's 2019 event featured cocktail events and a gala dinner at an award-winning restaurant, 2022 involved bento box lunches, dessert plates and a single post-event drinks session.

For Ms Donna Leong, Citi's head of marketing and sales based in Hong Kong, the era of the epic "boondoggle" is largely over.

Instead, the bank is experimenting with smaller events, from a 40-person lunch about the metaverse and non-fungible tokens to intimate dinners allowing small groups of about 30 next-gens to meet top banking executives in key cities including London, New York, Mexico City and Singapore.

In September, it hosted a small group of scions from each region at the University of Cambridge Judge Business School. There, they learnt how to take over the family business, mastering emotional intelligence and leadership, and pivoting operations in the face of disruption.

"The new firms that want to get in the game will be more gimmick-centric but I think the larger institutions tend to be more content-based," Ms Leong said.

"And when you're talking about next-gens, they have the resources – it's just a matter of getting them together. Once they meet up, who's to say they can't go on their own boondoggle?" BLOOMBERG

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