UBS’s Dialogue programme takes an innovative approach to the financial education of its key clients, from teenagers to tycoons, says Christopher Silvester.
Not long after he was appointed as global head of key-client education for UBS, Walter Rambousek wondered whether the bank was spending its marketing budget for key clients in the right way. Inviting them to Formula One grand prix races and similar events was all very well, but did they value such invitations?
He decided to commission a survey from Scorpio Partnership, the wealth-management consultancy. It asked hundreds of UBS’s key clients what they would like the bank to offer them. ‘They said what I’d hoped they’d say: “All these tickets we can buy by ourselves. If you force me to take it I will give it to my son or cousin — somebody will go — but we would be much more interested to learn from you what you think, feel the expertise of your people, have an interaction. If you do that we may open up a bit more, tell you a bit more about what we think and what our experiences are.”’
Rambousek came up with the name of a proposed programme: the UBS Dialogue. He had organised investor seminars and the summer education programme for the 20- to 28-year-old children of key clients. ‘All the other banks do a similar thing,’ he says. ‘But I wanted to take it to the next level and offer a road map, a whole curriculum. A key-client successor can start at twenty — he might be second- or third-generation — then he can move on, attend a Dialogue event every two years until he is 60 or 65, when we have what we call the Dialogue Summit, which is our top event.’
Rambousek first took his proposal to the business committee of UBS’s wealth-management division in March 2007. By the time he had fully developed the business case in August the financial world was beginning to change. Nonetheless, he was given the green light and began developing the UBS Dialogue programme, on behalf of which he received the 2008 Spear’s award for Best Private Bank for the Next Generation.
‘The other banks all have great programmes, but they may just have one segment, perhaps the youngsters, and then it’s maybe only two or three days. Perhaps two years later they hold a symposium and the chairman and CEO are invited, and they invite famous people. One day and it’s over.’
Based on the Scorpio survey, Rambousek was certain of which topics UBS would have to cover in its Dialogue module series. There were three topic areas. ‘The first was managing family wealth: how can I leave a legacy behind, how can I resolve family issues, with children and grandchildren all hoping for big money? It’s quite tricky, because it gets extremely emotional and personal. The second was investment strategies — hedge funds, derivatives, structured products, alternative investments, all these fancy things. The third was corporate finance: what is my company worth, how to sell it, how to merge, how to buy, how to organise corporate succession. We offer these three topic streams on two levels: level one is called foundation and level two is called specialisation.’
Another interesting component that comes into play is the Dialogue programme’s global reach. ‘Today we offer these topics mainly out of Zurich, because Zurich is an attractive place for people to come to, an extremely beautiful city, it’s easy to get around, it’s safe. Then some topics we offer in London. We offer the entire programme also in either Hong Kong or Singapore. It’s a 3½-hour flight, so that’s fine. Later on, when we have a little more certainty about what’s happening in the US, we will offer the whole programme over there, especially to Latin American clients.’ A client can choose first the topic, then the level, and then the location. None of UBS’s competitors is offering that degree of specialisation, Rambousek assures me.
The ‘summer camp’ lasts for two weeks and mentors 50 successors of key clients, in Zurich and Singapore. This summer was the fourth such education event in Zurich, with 50 key-client successors attending out of 28 countries. ‘The only requirement is that they must be of legal age,’ Rambousek says. ‘It’s a mini-United Nations. The Saudi guy works with the Jewish guy on the same case study and it works. It’s generally one-third women, two-thirds men, but that’s a minority that carries weight. We have many participants from Eastern Europe, from Kazakhstan, from Ukraine, from Russia, from all major countries in Asia, all the countries in Latin America as well as in Europe.’
Different UBS markets get allocations based on the number of key clients they contain, key clients as a segment being defined as those with assets of $50 million-plus, and it is up to them to decide who to send. ‘Of course, you don’t send somebody who is not interested. There are different reasons why you send somebody. Also, these very rich families are families like other families: they have generational conflicts. Very often the kids are not very much interested in what the parents are doing, sometimes they don’t know that they have a lot of money, or they’re very critical about their parents’ business activities. The father says: “Would you mind taking my son because he should learn about finance and economics and global questions.”
‘We have very interesting topics on climate change, ethics in business, all in a global setting. We can bring generations together in families and we can make them all aware of what our institution can do for them, how we care about the clients. Sometimes the kids are MBA students who want to have hands-on banking experience, because they may wish to go into wealth management or investment banking or global-asset management.’
One reason for hosting such events, obviously, is to get to know the key-client successors. Another is to share the bank’s expertise, to have well-informed clients and client advisers — because client advisers can meet their clients several times during the course. Another reason may be retention, when a client relationship is in danger, and a fourth reason may be the hope of increasing the bank’s share of a key client’s assets. ‘We get to know the client, the client gets to know the bank, and we want to make more business with the client,’ Rambousek emphasises. ‘It’s a give and take for both sides — again, the Dialogue concept.’
The ultimate event is the Dialogue Summit, a four-day seminar extravaganza, which is planned to take place every year and which Rambousek declares is absolutely unique, a one-time opportunity for family patriarchs from very wealthy families.
‘You cannot just be nominated,’ he says. ‘You are invited to attend by the bank’s senior management. The first summit is planned for Vancouver, Canada, next summer. We have a topic, which is power — political power, economic power, and the power of having a vision and putting it into reality. We have one day of excursions. And we shall have very high-level speakers for half a day each: scientists, government ministers, representatives of the economic community — people who have something substantial to say. When we speak about the power of having a vision and its implementation, then we want people who literally could make such a vision happen.’
He cites as an example of the sort of vision implementation he has in mind José Antonio Abreu, the Venezuelan entrepreneur who invested millions in founding youth orchestras to take young people away from the slums and streets of his country. He then approached the Venezuelan government and lobbied it to match his contribution. The result was the creation of 130 youth orchestras, 60 children’s orchestras and a network of choirs, all training children from the age of two onwards. ‘That’s very powerful and influential. Again it has to do with succession and creating a legacy: “How can I make sense of the money I have?” It’s a very pressing question for these people.’
Heading a team of four and supported by the UBS wealth-management division’s marketing department, Rambousek is well aware of the need to get two things right: the topic and the infrastructure, ‘because these are very demanding clients. So far the Dialogue modules have been held at attractive locations in Zurich.
There are privacy issues, security issues and status issues to be resolved, since key clients want to know that they are learning alongside genuine peers. And — of course — the offered content has to match their expectations. ‘You only have one opportunity,’ Rambousek emphasises. ‘Either you get it right or you’re lost.’