Transferring wealth to the next generation is one of the core needs in wealth management, and getting these transitions right is key to building relationships that are measured in decades and not years.
Private banks devote significant resources to getting appropriate structures and strategies in place to do this effectively when the time comes, but getting the technical side correct may not be enough. An equal, if not greater, amount of effort needs to be placed on getting to know the next generation to build familiarity with the brand. Banks historically have not been very good at this, but they might want to look at the automotive industry for a roadmap.
Mercedes Benz provides a good example with Mercedes World, a complex built on the famous Brooklands race circuit south of London. Mercedes World provides an immersive experience of the Mercedes brand that goes far beyond a traditional test drive.
A day out already gives families the chance to learn about the history of the brand and motor cars in a museum, watch as a crack team of drivers put the latest supercars to the test on a closed track, gives teenagers over 1.5m tall the chance to drive a real car, and adults the chance to drive a SL coupe at up to 155mph with an instructor alongside to guide you.
While these experiences will appeal to the senior members of the family, Mercedes have introduced their new “Little Learners” programme to introduce the brand to an even younger audience.
Children between three and seven years old have the chance to drive a miniature battery-powered version of an SL roadster on a closed track. While getting the chance to drive is enjoyable, Mercedes has cleverly wrapped the experience in an educational vein and teaches the kids road safety at the same time. They finish off the session with a Mercedes-branded drivers licence for the kids to take home. The company says this is “a perfect way to spark a lifetime’s interest in smart driving” but it also cements the brand at a very young age.
The results of this experience might be hard to measure as most schoolchildren are not in the market for a new car, but creating an experience for a family to enjoy together builds a touch point for the organisation across generations, and could bear fruit in the years to come.
Visiting a vault might not be as sexy as driving around a racetrack – so how can banks achieve a similar result? Several banks are already reaching out to clients’ children with educational programmes, but there may also be opportunities to partner with other brands such as Mercedes to piggyback off the experience and introduce new clients to both sides at an earlier age.
Bill Yelverton is executive director at wealth management think-tank Scorpio Partnership
