July 15, 2026 • 27 mins
In the first of a two-part special recorded live at Bloomberg's London offices, Merryn Somerset Webb brings together Bloomberg's John Stepek, Bytetree's Charlie Morris and Jean-Damien Marie, Global Head of Investments for Barclay's Private Bank and Wealth Management to discuss how the next generation of investors is changing the wealth management industry. From Bitcoin and gold to private equity, ESG and the future of the 60/40 portfolio, the panel explores what tomorrow's wealthy clients want — and whether traditional investment advice is keeping up.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:17):
Welcome to Merrindalk's Your Money, the personal finance edition of
Merindalk's Money. In these bonus podcasts, we talk about the
best strategies for making the most of your money. I'm
Maren Zumset, Web Editor at Large for Bloomberg UK Money,
and across the next two weeks, we aren't going to
bring you highlights from a special broadcast we recorded at
the Bloomberg offices in London on the fourteenth of July.
It was an hour long panel focused on how the
(00:39):
world of wealth management is changing, about the rise of
next generation wealth clients and the growing role of alternatives in.
Speaker 3 (00:45):
Modern portfolio construction.
Speaker 2 (00:47):
The banelers were John Steppeck, senior reporter and author of
the Money Disgital newsletter, Charlie Morris, chief investment officer and
founder of byte Tree, a leading provider of investment research
in traditional finance and digital. We also as Jean dam
and Marie Global head of Investments for Barkley's Private Bank
and Wealth Management. Here's the first part of our conversation.
(01:11):
Thank you all for joining me today. Now we are
going to define our terms. We are talking about the
next gen of clients. What do we mean when we
talk about the next gen?
Speaker 4 (01:21):
That's a good question, I think for us, next gen
are you know, typically children who are really developing a
sense of wealth.
Speaker 5 (01:29):
They're they're interested in investing.
Speaker 4 (01:32):
They're curious. Often, they're active. They're very active, and they
want to be in control often and excited. And next
gen for us is there's a period for our clients
where it's about engagement and trying to understand them better.
Speaker 5 (01:49):
I think, OK.
Speaker 2 (01:50):
So we're talking about the newly well off young correct, yes,
and be inherited, the beneficiaries of the great well trend wealth.
Speaker 4 (01:58):
Tund which is the big happening soon as we know.
And yeah, they're learning, and they're they're they're passionate, often
with purpose beyond returns. So capital is not the only
thing that we discuss. There's a lot going on at
family level, family dynamics, capital capital more than returns. So yeah,
(02:20):
the discussion often with next gen goes in many directions.
And what is the same as as the old gen
is a sense of having some kind of gross end
preservation at the same time, which is interesting. You see,
(02:41):
it's a different dynamic than entrepreneurs are creating the wells.
Often next gen for us are taking the wells and
try to figure out what's going to be the purpose
of that as wells for the next generation.
Speaker 3 (02:53):
Okay, excellently.
Speaker 2 (02:54):
We'll definitely talk about that bit more in a minute,
but I want to continue defining our terms and ask you, John,
perhaps to explain what we mean when we say alternatives.
Speaker 6 (03:04):
Yeah, all ternators are basically anything that isn't listed equity
or listed bonds. So you'd be talking about private assets,
private equity, private credit obviously in the news a lot recently.
Also in the more kind of financial side of things,
commodities pretty much every commodity either direct investment commodities are
other ways into commodities, the derivatives like futures and options.
(03:29):
And also I suppose in its slightly further away from
the financial side, kind of like collectibles, so in trophy assets,
so anything like art or wine or coins, even.
Speaker 2 (03:44):
Gems on gems, vintage jewelry.
Speaker 6 (03:47):
Vintage jewelry, anything that fits into the sort of almost
like a kind of hobby turned into financial vehicle, classic cars,
that kind of thing.
Speaker 3 (03:56):
Real estate. Did you mention in real estate?
Speaker 6 (03:58):
I mean real estate, Yeah, that is a form of
alternative is probably in the cost I think, but yeah,
commercial property would be the other one I mean.
Speaker 3 (04:07):
And also anything.
Speaker 6 (04:07):
That's somewhat less liquid I think you can almost think
of like an alternatives is often something that's less liquid,
although that's not always the case. Obviously, plenty of commodities
up there for the liquid, and obviously gold is broadly
an alternatives.
Speaker 3 (04:24):
And commodities we divide up between.
Speaker 2 (04:26):
You list listed miners for commodities, for example, would not
be an alternative, but holding about a gold in your
basement or buy proper uti would be an alternative. Yeah, yeah, okay,
fair enough, right, Sarlie. There's one more alternative right which
I'm slightly newer. Alternative is that a big one?
Speaker 7 (04:44):
That is that where that question is crypt in general?
Speaker 3 (04:49):
Okay, do pick up on I want to pick.
Speaker 7 (04:52):
Up on the definition of alternatives, and I would say
that you could also talk about cash flow and non
cash flow, So if financial and non financial assets. Yeah,
and so you know, when you look at hedge fund,
you know, I say, if it's long short equity or something,
it's a strategy. It's not really an asset class. And
I would say the same is true for many things
(05:13):
like private equity. It's just a liquidity thing.
Speaker 6 (05:17):
You know.
Speaker 7 (05:17):
It's obviously long long term money and that sort of thing.
But the true alternatives don't don't revolve around money. There's
something else. So you've got the commodity sphere, you've got
the digital asset sphere or the crypto sphere, and the
collectibles that John pointed out, and also that you know,
liquidity is essential to that. So when you look at
the liquidity, you know, something like gold is the vast
majority of the community market, and there's also oil, but
(05:39):
of course there's not an investment, you know, oil, it's
a future contract, whereas whereas gold can be held. And
then again when you come to crypto, seventy five percent
of all crypto is bitcoin, and twenty five percent of
the other one million coins or however many there are,
it's not bitcoin. And it's very similar to gold versus
the above ground supply of gold against the above ground
supply of of other commodities. So I just think that's
(06:01):
a very good way to think about it. I think
the financial service industry has been hoodworking people for years
trying to call things alternatives. Put the fees up and
that sort of thing.
Speaker 3 (06:10):
But then not really can I pick you up them.
Speaker 2 (06:13):
Let's stop on private equity, which is constantly called an alternative.
And John and I talk about this a lot on
the podcast, and we say, well, private equity is just equity,
just equity, that's more expensive.
Speaker 3 (06:23):
It's the same thing.
Speaker 7 (06:24):
Yeah, absolutely, I mean private equity, I mean it can
be very good. But of course the just parity of
returns in private equity funds is vast, whereas if you
buy an index fund, everyone gets the same out. So
there is a very different sort of fundamental thing going
on there.
Speaker 2 (06:39):
Okay, but go back to crypto as Can I call
it an asset class?
Speaker 3 (06:43):
Well, I think so they coin an asset class.
Speaker 7 (06:46):
Has it been granted permission from somewhere high up in
financial circourse?
Speaker 3 (06:51):
I don't know. I don't know what the rules are here.
Speaker 7 (06:52):
Well, there are rules, of course, and that is that
if it's created by the Federal Reserve, the Bank of
England or Golden Sacks or someone like that, then of
course it's a legitimate thing. But because it's because it
came from chaos, and it came from the cypherpunks and
that sort of thing, it's never been accepted by the
financial services industry. So that's it. It's where it came from.
It came from the wrong the wrong postcode, and that's
(07:15):
why they don't like it. And you know everything else
that you know, if it comes out of Gonvi Sex,
then it's always very good, you must buy it. And
so there's that. But I think that is an asset class. Absolutely.
It's something completely different. And you know, you go back
to the history of asset classes. You know, we probably
started off with I would think commodities must have come first,
(07:35):
you know, the first loafe of bread, and then we
progressed from there with debt and then equity in the
thirteenth century or something, and then it really kicked off
in Amsterdam a few hundred years later. And most of
the other things aren't really asset classes. But crypto has
come along. It is completely different. It is definitely non
financial and it is definitely not equity or bond or commodity.
(07:57):
It's something different. It's digital, it's very but it's real.
Speaker 3 (08:01):
Okay, so we know what it doesn't. It will come
back to what it is. Yeah, we know what it doesn't.
Speaker 6 (08:06):
What is it?
Speaker 3 (08:07):
What is it?
Speaker 2 (08:07):
What's that We'll come back to use cases and all
that in the minute we'll have we'll have a nice
row everybody in about twenty minutes when we become of
some of.
Speaker 3 (08:13):
The other stuff. Right, let's go back to actual portfolios.
Speaker 2 (08:16):
So maybe your older gen have classic, old fashioned or
did at least have old fashions sixty forty portfolios, and
apart from maybe a little bit in their vintage cars
and jurry collections, they were very clear equity bond.
Speaker 3 (08:28):
But that portfolio construction is no longer the default.
Speaker 4 (08:32):
No, I think to Charlie's point earlier, I think we've
seen really the adoption of more asset classes. We can
give it with an assad classes later, but clearly today
I would say the need for an extry terms and
dovestication has led to portfolios being more than equities and bonds.
Not new right, because we've been discussing headshants for a
(08:53):
very long time. Pract equally in markets in general are
more popular, so they are becoming really part of any
asset education you can find on the street today. Being
the question is the quantum and the question is how
you access for what kind of returns? But this is
usually back to either skills alpha or in liquidity premium
one way or another. So today, yeah, I would say
(09:14):
so for our own clients, if you come and you're
not constrained and we can have a very very broad discussion,
the starting point is going to come from what we
call a holistic asset. That location discussion will come first
and foremost with liquid liquid long only long short, and
it will be a lot more than sixty foury for
sure that we see increasingly going into I would say
(09:39):
more mainstream portfolio. I think it's been the norm for
a long while, right, a lot of families. I've been
studying us En doughnuts for a very long time and tried,
you know, to be as good as another topic we
can discuss. And you see this kind of endoormant spirit
now tricking down up to or down to very small
(10:00):
portfolio because it's easier today to actually build a fifty
fairly something.
Speaker 2 (10:06):
Maybe it's friddling down exactly the point where it's maybe
not going to work so well anymore. Those in downward
portfolios have work brilliantly during the great heyday of private equity.
Speaker 3 (10:14):
Yeah, I think it depends on how it is an end.
Speaker 4 (10:18):
I think, yeah, Look for us, really the key part
of the job is to define a plan like a
goal and a plan for a plant, and plan that
plants can survive over time.
Speaker 5 (10:29):
To your point on the way than the likes.
Speaker 4 (10:31):
I do think that if you can have the time
to compound, which is such a wonder being long, you know,
and full on equality risk is a good thing usually,
whereas if your time arison is shorter, clearly should be
a little bit less like in the US and no
and at more yield in a portfolio. So I think, look,
(10:52):
the toolkit is wider. What doesn't change is the need
to get the right to advice and construct right portfolio
so you get the right outcome. I think the problem
you have is maybe there's a bit of fashion going
on right and it's all about that thing or the
other thing that may go to the lower and client,
maybe not always for the right reason.
Speaker 2 (11:12):
And say, what's in fashion that maybe some people are
having too much of in their portfolios.
Speaker 5 (11:17):
So well, a good question, I think the with the
next gen.
Speaker 4 (11:23):
To Charlie's point, we've been having a lot of discussions
on digital assets for sure that they own one way
or another. I think most things, any interesting topic this
is really probably something an asset class can debate, but
it's really something that's all across the spectrum, like from
very very wealthy families to actually mainstream investors because it's
(11:44):
easy actually to get to it.
Speaker 5 (11:46):
Again, it depends how you want to get to it it. Yeah,
for real crypto et cetera.
Speaker 4 (11:51):
So that that piece, for sure, I think the the
more private market the it's all about the democratization right
now of inequid stuff, which you know, for me, you
need to stay true to having quality investment in those
portfolio so you need to know what you're trying to
harvest and what you're giving.
Speaker 5 (12:11):
Up for more equity on all the way.
Speaker 2 (12:13):
Okay, well let's let's imagine, all right, say, good argument
that I'm a thirty year old investor now and I've
come to you and I haven't really got any sense
of what I want, but I know I'm a long
time investor. I don't require much in a way yield
at the moment. What am I going to get from you?
Am I going to get budiocent equity, twenty percent bonds
and forty in alternatives?
Speaker 3 (12:34):
How's it going to work? Is the very default that
you have.
Speaker 4 (12:37):
So we have we have a framework and clearly a
thirty year old. You know you've been an accumulation, so
should be a really equity or his premium.
Speaker 5 (12:48):
One way or another if you are.
Speaker 4 (12:49):
And then question again is like what kind of inequality
can you fall in bad times? You need to forecast
for those bad times we've seen right back in the day,
I used to be a secondary as well.
Speaker 5 (13:03):
It's good not to be shotcast. It's a good idea
in general. So we built a plan you can survive
in good time by times.
Speaker 4 (13:10):
So equality will be a big part, and the alternative
part will probably be around the combination of equity or
retain seeking portfolio type strategy, some more equality and a
bit of diversification on the way.
Speaker 5 (13:22):
So but equality will be.
Speaker 3 (13:24):
Will be them.
Speaker 2 (13:26):
Even though we can label somethings alternatives, et cetera, et cetera,
in the end, it's going to still be a majority equity.
Speaker 3 (13:33):
It's going to be a ninety ten in the end
sort of thing.
Speaker 4 (13:36):
Yeah, we'll define what the right cushion is for you
so you can sleep at night.
Speaker 5 (13:41):
But the point we just made earlier around.
Speaker 4 (13:44):
Private equity, it's equity leverage right and equity again.
Speaker 3 (13:50):
And are concerned.
Speaker 2 (13:50):
I'm John and I have been talking about this, say,
just the democratization of private equity is not not necessarily ideal.
Speaker 6 (13:55):
All right, Well, they's aiming, isn't it, because I suppose
this is the other thing, isn't it? The like private
equity benefited from ultra low interest rates for a long time,
but also from the fact that it was small and
I was big. And I think one of the things
you were mentioning kind of made me think, if for
toalking about ill liquidity, you should be getting rewarded for
(14:16):
taking illiquidity risk. Obviously, it was at one point in
this particular cycle that actually tipped and people were saying, actually,
you were paying an illiquidity premium as a psychological buffer
to stop you from taking your money out at the
wrong time. And I just thought it was fascinating how
it's so smoothly changed that the sale pitch went from
(14:37):
being you're getting paid more for taking this eliquidity risk,
so the eliquidity premium vanishing and saying, oh, that's because
you're paying more for the psychological protection. And I have
to say it left me a little bit skeptical about
what the exact purposes of adding private equity to a
portfolio of publicly listed, equally easily accessed liquid equities, and as.
Speaker 2 (15:01):
John always says, you know, if you if you want
access to small companies in the UK at least inexpensively, boy,
have we've got a deal for you a list of market.
Speaker 5 (15:09):
Yeah, but I think the no, you make a very
good point. I think you know that. As we mentioned before,
it's about being selective.
Speaker 4 (15:18):
You know, is it a good idea to invest in
the private equity market overall?
Speaker 5 (15:22):
Can debate. Now we can see.
Speaker 4 (15:25):
People who've been able managers, who being able to actually
deploy capital and actually make most of the return through
operational improvement from story shops, less leverage, less multiple expansion.
Speaker 5 (15:37):
If you can repeat that over time, probably you're happy to.
Speaker 4 (15:39):
Pay for alpha over over over over better or equally better.
Not your point, Yeah, I can see the point. I
will always remember and point out a few clients towards
the you know seven vintages, right, seven intagers you make
money or so many people just time and get got out.
Speaker 5 (15:56):
Right, you made money because you were stuck. But I
here's a good thing to be start with skills. I
agree that's important. But yeah, I can see your point.
Speaker 4 (16:06):
I do think the again for the right portfolio with
the right construction, it makes sense.
Speaker 5 (16:11):
Is it the holy Grail? And you know the magic one? No?
Speaker 2 (16:15):
No, yeah, let's go back to crypto. Let's go back
to a bitcoin. You know, we talk about gold a lot, right,
John and I we talk about gold.
Speaker 3 (16:23):
We right aback, gold a lot.
Speaker 2 (16:24):
And when we talk about how much gold did you
have in your portfolio, even if.
Speaker 3 (16:27):
You're a gold bug, how much should you have?
Speaker 2 (16:28):
And the answers comes down to and this is Amsbatian
Lion at Troy always puts us very well. He says,
you want enough for it to make a difference in
a crisis.
Speaker 3 (16:36):
Right, So one percent isn't enough, Two percent isn't enough?
Question what is enough?
Speaker 2 (16:41):
So in a crisis, you want your portfolio to have
enough that you know it saves you two degree of
it works as the head when it is working, which
it isn't always. But you don't want so much in
the good times, remembering that the majority of times are
good times. You don't want so much that it pulls
your returns down too much when things are going fine.
So what is the answer for I think some of
(17:01):
the trop portfolios it ends up being.
Speaker 3 (17:03):
Nine ten percent.
Speaker 2 (17:03):
And then sometimes it goes down seven and sometimes we've
got fourteen, so we tend to think maybe minimum five ish.
Speaker 7 (17:11):
Yeah. Well, I think the answer ied point people too
is the World Gold Council's study which they did about
ten years ago, which came to it concluded eight five
to eight percent, which means eight percent and they and
they were being a bit cautious there. The central banks,
of course, are now at twenty nine percent of their reserves,
so they're taking it pretty seriously. And you mentioned the
good times, Well, we've had most of the times. The
(17:33):
last twenty five years have been the good times. But
gold has beaten the S and P including after dividends,
and so that's into twenty six years, gold is ahead
of the SMB.
Speaker 2 (17:42):
Still has gold been constantly anticipating the bad times?
Speaker 7 (17:45):
Perhaps, Well, gold doesn't have to. I think it's a
bit of a bitsnoment that gold necessarily goes up all
the time because of bad news. I think, you know,
a very simple way to think about it, particularly in
the moment, particularly post Ukraine twenty twenty two, is that
gold's ordn't piece of the central bank reserves, always has been.
When those reserves are growing very very quickly, the gold
(18:07):
price is very very strong, and when those reserves have
been growing more slowly or in decontracting than the goal
price has been weak. And so you know, people ask
them out this year, Well, you know, when they have
got problems in the straight of the Moose, and the
central banks who are very wealthy in that region, they've
got problems right now. They need some liquidity, so they're
selling gold, not all of them, but some of them.
(18:28):
And so in the margin, there's less gold buying in
twenty twenty six and there was in twenty twenty five. Yeah,
and that could be one of the reasons. There's also
the unwinding of speculation, but that's all another story. But
I think you know, the bottom line is, you know,
what's the right weight of gold in the portfolio? My
view would probably be five percent of you bearish gold
and twenty percent of your bullish gold.
Speaker 2 (18:48):
Have a view, okay, have of you and take a
bit no less than five, all right, So with that
in mind, With that in mind, what about boitcoin.
Speaker 7 (18:56):
Well, there's a question, and I have to have to
my bold index because I couldn't possibly know the answer intuitively,
I would have to go and deliver the financial mass,
and if you do some volatility I mean interested, I
mean the bark is, do you'd use volatility to do allocation?
It's part of it, yeah, I mean it's an important
input for a lot of people who do decide how
(19:18):
much allocation to have to various things and cross correlations
and so forth. But you're a bigcoin of gold, have
low correlation high at the moment, possibly, but generally speaking
of the last five ten years, that've been very low,
and the volatility matching the risk rating would would come
out and say about forty two percent in bitcoin about
(19:39):
fifty eight gold. Okay, so on that basis, if you're eight,
if you're eight in gold, then you probably should be
six or seven in bitcoin. That might seem high to people,
but the logic stacks up.
Speaker 3 (19:49):
I got it.
Speaker 2 (19:49):
Was you ever put that much into a portfolio? You
ever give someone a portfolio with a percent bitcoin?
Speaker 5 (19:55):
So that's a really good question. So I was willing
for it.
Speaker 3 (20:00):
You were ready. Don't say we didn't give you a
prep time?
Speaker 4 (20:02):
No, well no, so yeah, so it is not part
of our set location framework.
Speaker 5 (20:07):
I do have discussions.
Speaker 4 (20:09):
Regularly, almost less so am I said those days was
clients so they're for now. So I grew with Charlie
on all side, but we have not made the point
of make it an investible assets as part of our
set location.
Speaker 5 (20:26):
Framework for now.
Speaker 3 (20:27):
Okay, can we ask.
Speaker 7 (20:29):
About that because to my mind, there's not a single
private bank or wealth management firm in Europe that I
can identify that is publicly allocated to bitcoin on the
discretionary basis. Not one firm that's it might be the
execution only desks might have taken client orders, but not
one single firm. And and then there must be in
it because we speak to people who are really bulleted
(20:50):
and you really like it, who with senior roles of
these firms and they get blocked by the system. What
is the influence, sorry to take over? What is the
influen It's of the system on allocating to Bigoin to.
Speaker 4 (21:03):
Your point, I think on the one end, clients are
less constrained, right, so think family offices allocations have happened, right,
They've happened already, and and already the discussion usually where
I'm quite often out of my debt is the real
crypto allocation versus CUBI antf Right. Uh, this is really
to me the kind of a deselling factor of those families.
Speaker 5 (21:24):
Some people are actually really into it.
Speaker 4 (21:26):
Uh, which is fine because if you actually go to
the actual logic of crypto, you should actually go full
speed right on the thing.
Speaker 6 (21:34):
That's a that's a difference between owning your physical gold
and holding ant called the same sort of.
Speaker 5 (21:41):
The same, same story. I agree, except that the world
think that I did spend time on uh.
Speaker 4 (21:47):
Gets complicated readily quick on the actual thing, whereas uh, yeah,
I think you have a point on like you know,
you move to more retail investing. I think a lot
of us are watching a lot of bit the environment
and what's the spirit in terms of having a recommendation
on digital assets, which I think I said that we've
(22:08):
seen very varied.
Speaker 5 (22:12):
Behavior on that spirit. So I do think that T
is starting a load it.
Speaker 2 (22:17):
Let's pick up on this idea of the next gen
client wanting something different to the older client, and exposure
to digital assets is part of that. So I would
assume that everything that you worry about, no private banks,
et cetera providing it over time. If this is what
the next gen client wants, this is what they're going
to get. Right at some point, someone's going to override
that system and make sure that everyone can put an
(22:39):
allocation into digital assets one way or another.
Speaker 3 (22:42):
So that's one thing that we know that they want,
or we hear a lot that they want.
Speaker 2 (22:45):
And the other thing we hear a lot about it
is what you mentioned earlier, which is about them wanting
a portfolio that has some social purpose or has some
impact to it, or they want to have a ESG
overlay that maybe older clients don't necessarily have. And we
hear this an awful lot of John and I talk
about it a lot on the podcast. But in the end,
when people say what does your client want, what the
client really want in the end just to make more money,
(23:07):
is to protect the money.
Speaker 3 (23:07):
That they have and make more of it CPS.
Speaker 2 (23:10):
In the end, while you have all these conversations and
I know that wealth management is becoming a much more
empathetic business than.
Speaker 3 (23:15):
Perhaps it used to be.
Speaker 2 (23:16):
A client empathy with your client being a big deal,
is it really the case in the end that the
new generation of clients is prepared to give up return
in return for social purpose or impact.
Speaker 5 (23:30):
Wow, great question. I think it depends a little bit.
Speaker 4 (23:33):
There's clear that we're facing more questioning more dialogue on
the impact of capital beyond returns. I think that that's true,
and from where I see it, I think, you know,
we're active from Asia to year Africa at least, it's
a relatively common theme takes different shapes and questions. But
(23:57):
I think next gen, as in common across geographic to
question a little bit more the impact of capital when
it comes to.
Speaker 5 (24:06):
Looking at returns.
Speaker 4 (24:07):
So the way you think about it is to have
actually benchmark for instance, which are the same. We don't
adapt the benchmark and perform whatever the way. So I
think that's usually the trade off, and this is where
you end up back to purpose having not really new
discussions frankly, in terms of do you actually bias your
actions towards capital with impact or do you maximize return
(24:30):
to actually have more philanthropy going on and that well
helping if you're not without the return or with the return,
but with the capital and no return expectation for pilanthropy
and these kind of actions.
Speaker 5 (24:43):
I think right now.
Speaker 4 (24:45):
The topic is really more about understanding our processes and
what do we take into account, you know, do we
have ESG integration, how do we look at the impact
of capital of companies we're investing into. It's difficult quantify
the trade off, which is why again we're not using
sand benchmarks for everything. I think where you do see
(25:06):
difference probably in prict markets where you have pure impact investing,
which really comes with spell those first, that's different, like
you know, you go articule line type spirit. But further
actually in pride market that's probably the closest expression, and
we do have more queries on that. Interesting, at the beginning,
it's clearly stated its impact first.
Speaker 3 (25:26):
Yeah. Yeah, and you may get low returns and can
accept that.
Speaker 7 (25:31):
Yes.
Speaker 2 (25:31):
Interesting, don We've talked about this a lot along the way,
and we keep seeing surveys, don't we showing that people
are very very keen on the purpose of their investments
until they see themselves losing money.
Speaker 6 (25:42):
Yeah, I mean I think you are an average person
feels like that because the wasn't the case, then we
wodn't constantly have bubbles, because you know, in bubbles are
just people chasing the money regard let's say what the
bubble is and and and I think it's absolutely fine
to you should have your own lines about what you
invest in. I think that people need to think very
(26:04):
hard about what those are low like lost of people.
For example, you know, the obvious one is tobacco. Lots
of people won't invest in tobacco because it's often had
to see any kind of upside from providing you know,
that kind of product. But at the same time, every
other kind of overlay comes with trade offs. You can't
just turn around and say that, well, I'm not going
(26:26):
to invest in an oil major, because they you know,
pull oil out of the ground and it gets burned
in cars, and then you know, we'll are you can
give up driving yourself partically if you'll Arguably people who
are using these services at this level will be fairly
wealthy and presumably consumers of fossil fuels and things like
(26:46):
that themselves. So I tend to think is as a
luxury item and it's a nice to have if that's
something you want. But if if there was an obvious
way kind of detracting from the most people would probably
thank you all.
Speaker 2 (27:03):
And al Durian jury is probably out on what the
next Jay client really wants. That was the first portion
of our special broadcast on the Next Generation of Wealth Management.
Next week we'll bring you more from that panel.
Speaker 3 (27:18):
Thanks for listening to this.
Speaker 2 (27:19):
Week's Maren Talk to Your Money. If you like our show,
rate review, and subscribe wherever you listen to podcasts also
be showed. Follow me and John on ex or Twitter
at marins w and John Underscore Stepic. This episode was
produced by Semisadi and Moses and sound designed by Blake
Maple's and Aaron Casper. Questions and comments on this show
and all our shows are always welcome. Our show email
is Merren Money at Bloomberg dot net
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:17):
Welcome to Merrindalk's Your Money, the personal finance edition of
Merindalk's Money. In these bonus podcasts, we talk about the
best strategies for making the most of your money. I'm
Maren Zumset, Web Editor at Large for Bloomberg UK Money,
and across the next two weeks, we aren't going to
bring you highlights from a special broadcast we recorded at
the Bloomberg offices in London on the fourteenth of July.
It was an hour long panel focused on how the
(00:39):
world of wealth management is changing, about the rise of
next generation wealth clients and the growing role of alternatives in.
Speaker 3 (00:45):
Modern portfolio construction.
Speaker 2 (00:47):
The banelers were John Steppeck, senior reporter and author of
the Money Disgital newsletter, Charlie Morris, chief investment officer and
founder of byte Tree, a leading provider of investment research
in traditional finance and digital. We also as Jean dam
and Marie Global head of Investments for Barkley's Private Bank
and Wealth Management. Here's the first part of our conversation.
(01:11):
Thank you all for joining me today. Now we are
going to define our terms. We are talking about the
next gen of clients. What do we mean when we
talk about the next gen?
Speaker 4 (01:21):
That's a good question, I think for us, next gen
are you know, typically children who are really developing a
sense of wealth.
Speaker 5 (01:29):
They're they're interested in investing.
Speaker 4 (01:32):
They're curious. Often, they're active. They're very active, and they
want to be in control often and excited. And next
gen for us is there's a period for our clients
where it's about engagement and trying to understand them better.
Speaker 5 (01:49):
I think, OK.
Speaker 2 (01:50):
So we're talking about the newly well off young correct, yes,
and be inherited, the beneficiaries of the great well trend wealth.
Speaker 4 (01:58):
Tund which is the big happening soon as we know.
And yeah, they're learning, and they're they're they're passionate, often
with purpose beyond returns. So capital is not the only
thing that we discuss. There's a lot going on at
family level, family dynamics, capital capital more than returns. So yeah,
(02:20):
the discussion often with next gen goes in many directions.
And what is the same as as the old gen
is a sense of having some kind of gross end
preservation at the same time, which is interesting. You see,
(02:41):
it's a different dynamic than entrepreneurs are creating the wells.
Often next gen for us are taking the wells and
try to figure out what's going to be the purpose
of that as wells for the next generation.
Speaker 3 (02:53):
Okay, excellently.
Speaker 2 (02:54):
We'll definitely talk about that bit more in a minute,
but I want to continue defining our terms and ask you, John,
perhaps to explain what we mean when we say alternatives.
Speaker 6 (03:04):
Yeah, all ternators are basically anything that isn't listed equity
or listed bonds. So you'd be talking about private assets,
private equity, private credit obviously in the news a lot recently.
Also in the more kind of financial side of things,
commodities pretty much every commodity either direct investment commodities are
other ways into commodities, the derivatives like futures and options.
(03:29):
And also I suppose in its slightly further away from
the financial side, kind of like collectibles, so in trophy assets,
so anything like art or wine or coins, even.
Speaker 2 (03:44):
Gems on gems, vintage jewelry.
Speaker 6 (03:47):
Vintage jewelry, anything that fits into the sort of almost
like a kind of hobby turned into financial vehicle, classic cars,
that kind of thing.
Speaker 3 (03:56):
Real estate. Did you mention in real estate?
Speaker 6 (03:58):
I mean real estate, Yeah, that is a form of
alternative is probably in the cost I think, but yeah,
commercial property would be the other one I mean.
Speaker 3 (04:07):
And also anything.
Speaker 6 (04:07):
That's somewhat less liquid I think you can almost think
of like an alternatives is often something that's less liquid,
although that's not always the case. Obviously, plenty of commodities
up there for the liquid, and obviously gold is broadly
an alternatives.
Speaker 3 (04:24):
And commodities we divide up between.
Speaker 2 (04:26):
You list listed miners for commodities, for example, would not
be an alternative, but holding about a gold in your
basement or buy proper uti would be an alternative. Yeah, yeah, okay,
fair enough, right, Sarlie. There's one more alternative right which
I'm slightly newer. Alternative is that a big one?
Speaker 7 (04:44):
That is that where that question is crypt in general?
Speaker 3 (04:49):
Okay, do pick up on I want to pick.
Speaker 7 (04:52):
Up on the definition of alternatives, and I would say
that you could also talk about cash flow and non
cash flow, So if financial and non financial assets. Yeah,
and so you know, when you look at hedge fund,
you know, I say, if it's long short equity or something,
it's a strategy. It's not really an asset class. And
I would say the same is true for many things
(05:13):
like private equity. It's just a liquidity thing.
Speaker 6 (05:17):
You know.
Speaker 7 (05:17):
It's obviously long long term money and that sort of thing.
But the true alternatives don't don't revolve around money. There's
something else. So you've got the commodity sphere, you've got
the digital asset sphere or the crypto sphere, and the
collectibles that John pointed out, and also that you know,
liquidity is essential to that. So when you look at
the liquidity, you know, something like gold is the vast
majority of the community market, and there's also oil, but
(05:39):
of course there's not an investment, you know, oil, it's
a future contract, whereas whereas gold can be held. And
then again when you come to crypto, seventy five percent
of all crypto is bitcoin, and twenty five percent of
the other one million coins or however many there are,
it's not bitcoin. And it's very similar to gold versus
the above ground supply of gold against the above ground
supply of of other commodities. So I just think that's
(06:01):
a very good way to think about it. I think
the financial service industry has been hoodworking people for years
trying to call things alternatives. Put the fees up and
that sort of thing.
Speaker 3 (06:10):
But then not really can I pick you up them.
Speaker 2 (06:13):
Let's stop on private equity, which is constantly called an alternative.
And John and I talk about this a lot on
the podcast, and we say, well, private equity is just equity,
just equity, that's more expensive.
Speaker 3 (06:23):
It's the same thing.
Speaker 7 (06:24):
Yeah, absolutely, I mean private equity, I mean it can
be very good. But of course the just parity of
returns in private equity funds is vast, whereas if you
buy an index fund, everyone gets the same out. So
there is a very different sort of fundamental thing going
on there.
Speaker 2 (06:39):
Okay, but go back to crypto as Can I call
it an asset class?
Speaker 3 (06:43):
Well, I think so they coin an asset class.
Speaker 7 (06:46):
Has it been granted permission from somewhere high up in
financial circourse?
Speaker 3 (06:51):
I don't know. I don't know what the rules are here.
Speaker 7 (06:52):
Well, there are rules, of course, and that is that
if it's created by the Federal Reserve, the Bank of
England or Golden Sacks or someone like that, then of
course it's a legitimate thing. But because it's because it
came from chaos, and it came from the cypherpunks and
that sort of thing, it's never been accepted by the
financial services industry. So that's it. It's where it came from.
It came from the wrong the wrong postcode, and that's
(07:15):
why they don't like it. And you know everything else
that you know, if it comes out of Gonvi Sex,
then it's always very good, you must buy it. And
so there's that. But I think that is an asset class. Absolutely.
It's something completely different. And you know, you go back
to the history of asset classes. You know, we probably
started off with I would think commodities must have come first,
(07:35):
you know, the first loafe of bread, and then we
progressed from there with debt and then equity in the
thirteenth century or something, and then it really kicked off
in Amsterdam a few hundred years later. And most of
the other things aren't really asset classes. But crypto has
come along. It is completely different. It is definitely non
financial and it is definitely not equity or bond or commodity.
(07:57):
It's something different. It's digital, it's very but it's real.
Speaker 3 (08:01):
Okay, so we know what it doesn't. It will come
back to what it is. Yeah, we know what it doesn't.
Speaker 6 (08:06):
What is it?
Speaker 3 (08:07):
What is it?
Speaker 2 (08:07):
What's that We'll come back to use cases and all
that in the minute we'll have we'll have a nice
row everybody in about twenty minutes when we become of
some of.
Speaker 3 (08:13):
The other stuff. Right, let's go back to actual portfolios.
Speaker 2 (08:16):
So maybe your older gen have classic, old fashioned or
did at least have old fashions sixty forty portfolios, and
apart from maybe a little bit in their vintage cars
and jurry collections, they were very clear equity bond.
Speaker 3 (08:28):
But that portfolio construction is no longer the default.
Speaker 4 (08:32):
No, I think to Charlie's point earlier, I think we've
seen really the adoption of more asset classes. We can
give it with an assad classes later, but clearly today
I would say the need for an extry terms and
dovestication has led to portfolios being more than equities and bonds.
Not new right, because we've been discussing headshants for a
(08:53):
very long time. Pract equally in markets in general are
more popular, so they are becoming really part of any
asset education you can find on the street today. Being
the question is the quantum and the question is how
you access for what kind of returns? But this is
usually back to either skills alpha or in liquidity premium
one way or another. So today, yeah, I would say
(09:14):
so for our own clients, if you come and you're
not constrained and we can have a very very broad discussion,
the starting point is going to come from what we
call a holistic asset. That location discussion will come first
and foremost with liquid liquid long only long short, and
it will be a lot more than sixty foury for
sure that we see increasingly going into I would say
(09:39):
more mainstream portfolio. I think it's been the norm for
a long while, right, a lot of families. I've been
studying us En doughnuts for a very long time and tried,
you know, to be as good as another topic we
can discuss. And you see this kind of endoormant spirit
now tricking down up to or down to very small
(10:00):
portfolio because it's easier today to actually build a fifty
fairly something.
Speaker 2 (10:06):
Maybe it's friddling down exactly the point where it's maybe
not going to work so well anymore. Those in downward
portfolios have work brilliantly during the great heyday of private equity.
Speaker 3 (10:14):
Yeah, I think it depends on how it is an end.
Speaker 4 (10:18):
I think, yeah, Look for us, really the key part
of the job is to define a plan like a
goal and a plan for a plant, and plan that
plants can survive over time.
Speaker 5 (10:29):
To your point on the way than the likes.
Speaker 4 (10:31):
I do think that if you can have the time
to compound, which is such a wonder being long, you know,
and full on equality risk is a good thing usually,
whereas if your time arison is shorter, clearly should be
a little bit less like in the US and no
and at more yield in a portfolio. So I think, look,
(10:52):
the toolkit is wider. What doesn't change is the need
to get the right to advice and construct right portfolio
so you get the right outcome. I think the problem
you have is maybe there's a bit of fashion going
on right and it's all about that thing or the
other thing that may go to the lower and client,
maybe not always for the right reason.
Speaker 2 (11:12):
And say, what's in fashion that maybe some people are
having too much of in their portfolios.
Speaker 5 (11:17):
So well, a good question, I think the with the
next gen.
Speaker 4 (11:23):
To Charlie's point, we've been having a lot of discussions
on digital assets for sure that they own one way
or another. I think most things, any interesting topic this
is really probably something an asset class can debate, but
it's really something that's all across the spectrum, like from
very very wealthy families to actually mainstream investors because it's
(11:44):
easy actually to get to it.
Speaker 5 (11:46):
Again, it depends how you want to get to it it. Yeah,
for real crypto et cetera.
Speaker 4 (11:51):
So that that piece, for sure, I think the the
more private market the it's all about the democratization right
now of inequid stuff, which you know, for me, you
need to stay true to having quality investment in those
portfolio so you need to know what you're trying to
harvest and what you're giving.
Speaker 5 (12:11):
Up for more equity on all the way.
Speaker 2 (12:13):
Okay, well let's let's imagine, all right, say, good argument
that I'm a thirty year old investor now and I've
come to you and I haven't really got any sense
of what I want, but I know I'm a long
time investor. I don't require much in a way yield
at the moment. What am I going to get from you?
Am I going to get budiocent equity, twenty percent bonds
and forty in alternatives?
Speaker 3 (12:34):
How's it going to work? Is the very default that
you have.
Speaker 4 (12:37):
So we have we have a framework and clearly a
thirty year old. You know you've been an accumulation, so
should be a really equity or his premium.
Speaker 5 (12:48):
One way or another if you are.
Speaker 4 (12:49):
And then question again is like what kind of inequality
can you fall in bad times? You need to forecast
for those bad times we've seen right back in the day,
I used to be a secondary as well.
Speaker 5 (13:03):
It's good not to be shotcast. It's a good idea
in general. So we built a plan you can survive
in good time by times.
Speaker 4 (13:10):
So equality will be a big part, and the alternative
part will probably be around the combination of equity or
retain seeking portfolio type strategy, some more equality and a
bit of diversification on the way.
Speaker 5 (13:22):
So but equality will be.
Speaker 3 (13:24):
Will be them.
Speaker 2 (13:26):
Even though we can label somethings alternatives, et cetera, et cetera,
in the end, it's going to still be a majority equity.
Speaker 3 (13:33):
It's going to be a ninety ten in the end
sort of thing.
Speaker 4 (13:36):
Yeah, we'll define what the right cushion is for you
so you can sleep at night.
Speaker 5 (13:41):
But the point we just made earlier around.
Speaker 4 (13:44):
Private equity, it's equity leverage right and equity again.
Speaker 3 (13:50):
And are concerned.
Speaker 2 (13:50):
I'm John and I have been talking about this, say,
just the democratization of private equity is not not necessarily ideal.
Speaker 6 (13:55):
All right, Well, they's aiming, isn't it, because I suppose
this is the other thing, isn't it? The like private
equity benefited from ultra low interest rates for a long time,
but also from the fact that it was small and
I was big. And I think one of the things
you were mentioning kind of made me think, if for
toalking about ill liquidity, you should be getting rewarded for
(14:16):
taking illiquidity risk. Obviously, it was at one point in
this particular cycle that actually tipped and people were saying, actually,
you were paying an illiquidity premium as a psychological buffer
to stop you from taking your money out at the
wrong time. And I just thought it was fascinating how
it's so smoothly changed that the sale pitch went from
(14:37):
being you're getting paid more for taking this eliquidity risk,
so the eliquidity premium vanishing and saying, oh, that's because
you're paying more for the psychological protection. And I have
to say it left me a little bit skeptical about
what the exact purposes of adding private equity to a
portfolio of publicly listed, equally easily accessed liquid equities, and as.
Speaker 2 (15:01):
John always says, you know, if you if you want
access to small companies in the UK at least inexpensively, boy,
have we've got a deal for you a list of market.
Speaker 5 (15:09):
Yeah, but I think the no, you make a very
good point. I think you know that. As we mentioned before,
it's about being selective.
Speaker 4 (15:18):
You know, is it a good idea to invest in
the private equity market overall?
Speaker 5 (15:22):
Can debate. Now we can see.
Speaker 4 (15:25):
People who've been able managers, who being able to actually
deploy capital and actually make most of the return through
operational improvement from story shops, less leverage, less multiple expansion.
Speaker 5 (15:37):
If you can repeat that over time, probably you're happy to.
Speaker 4 (15:39):
Pay for alpha over over over over better or equally better.
Not your point, Yeah, I can see the point. I
will always remember and point out a few clients towards
the you know seven vintages, right, seven intagers you make
money or so many people just time and get got out.
Speaker 5 (15:56):
Right, you made money because you were stuck. But I
here's a good thing to be start with skills. I
agree that's important. But yeah, I can see your point.
Speaker 4 (16:06):
I do think the again for the right portfolio with
the right construction, it makes sense.
Speaker 5 (16:11):
Is it the holy Grail? And you know the magic one? No?
Speaker 2 (16:15):
No, yeah, let's go back to crypto. Let's go back
to a bitcoin. You know, we talk about gold a lot, right,
John and I we talk about gold.
Speaker 3 (16:23):
We right aback, gold a lot.
Speaker 2 (16:24):
And when we talk about how much gold did you
have in your portfolio, even if.
Speaker 3 (16:27):
You're a gold bug, how much should you have?
Speaker 2 (16:28):
And the answers comes down to and this is Amsbatian
Lion at Troy always puts us very well. He says,
you want enough for it to make a difference in
a crisis.
Speaker 3 (16:36):
Right, So one percent isn't enough, Two percent isn't enough?
Question what is enough?
Speaker 2 (16:41):
So in a crisis, you want your portfolio to have
enough that you know it saves you two degree of
it works as the head when it is working, which
it isn't always. But you don't want so much in
the good times, remembering that the majority of times are
good times. You don't want so much that it pulls
your returns down too much when things are going fine.
So what is the answer for I think some of
(17:01):
the trop portfolios it ends up being.
Speaker 3 (17:03):
Nine ten percent.
Speaker 2 (17:03):
And then sometimes it goes down seven and sometimes we've
got fourteen, so we tend to think maybe minimum five ish.
Speaker 7 (17:11):
Yeah. Well, I think the answer ied point people too
is the World Gold Council's study which they did about
ten years ago, which came to it concluded eight five
to eight percent, which means eight percent and they and
they were being a bit cautious there. The central banks,
of course, are now at twenty nine percent of their reserves,
so they're taking it pretty seriously. And you mentioned the
good times, Well, we've had most of the times. The
(17:33):
last twenty five years have been the good times. But
gold has beaten the S and P including after dividends,
and so that's into twenty six years, gold is ahead
of the SMB.
Speaker 2 (17:42):
Still has gold been constantly anticipating the bad times?
Speaker 7 (17:45):
Perhaps, Well, gold doesn't have to. I think it's a
bit of a bitsnoment that gold necessarily goes up all
the time because of bad news. I think, you know,
a very simple way to think about it, particularly in
the moment, particularly post Ukraine twenty twenty two, is that
gold's ordn't piece of the central bank reserves, always has been.
When those reserves are growing very very quickly, the gold
(18:07):
price is very very strong, and when those reserves have
been growing more slowly or in decontracting than the goal
price has been weak. And so you know, people ask
them out this year, Well, you know, when they have
got problems in the straight of the Moose, and the
central banks who are very wealthy in that region, they've
got problems right now. They need some liquidity, so they're
selling gold, not all of them, but some of them.
(18:28):
And so in the margin, there's less gold buying in
twenty twenty six and there was in twenty twenty five. Yeah,
and that could be one of the reasons. There's also
the unwinding of speculation, but that's all another story. But
I think you know, the bottom line is, you know,
what's the right weight of gold in the portfolio? My
view would probably be five percent of you bearish gold
and twenty percent of your bullish gold.
Speaker 2 (18:48):
Have a view, okay, have of you and take a
bit no less than five, all right, So with that
in mind, With that in mind, what about boitcoin.
Speaker 7 (18:56):
Well, there's a question, and I have to have to
my bold index because I couldn't possibly know the answer intuitively,
I would have to go and deliver the financial mass,
and if you do some volatility I mean interested, I
mean the bark is, do you'd use volatility to do allocation?
It's part of it, yeah, I mean it's an important
input for a lot of people who do decide how
(19:18):
much allocation to have to various things and cross correlations
and so forth. But you're a bigcoin of gold, have
low correlation high at the moment, possibly, but generally speaking
of the last five ten years, that've been very low,
and the volatility matching the risk rating would would come
out and say about forty two percent in bitcoin about
(19:39):
fifty eight gold. Okay, so on that basis, if you're eight,
if you're eight in gold, then you probably should be
six or seven in bitcoin. That might seem high to people,
but the logic stacks up.
Speaker 3 (19:49):
I got it.
Speaker 2 (19:49):
Was you ever put that much into a portfolio? You
ever give someone a portfolio with a percent bitcoin?
Speaker 5 (19:55):
So that's a really good question. So I was willing
for it.
Speaker 3 (20:00):
You were ready. Don't say we didn't give you a
prep time?
Speaker 4 (20:02):
No, well no, so yeah, so it is not part
of our set location framework.
Speaker 5 (20:07):
I do have discussions.
Speaker 4 (20:09):
Regularly, almost less so am I said those days was
clients so they're for now. So I grew with Charlie
on all side, but we have not made the point
of make it an investible assets as part of our
set location.
Speaker 5 (20:26):
Framework for now.
Speaker 3 (20:27):
Okay, can we ask.
Speaker 7 (20:29):
About that because to my mind, there's not a single
private bank or wealth management firm in Europe that I
can identify that is publicly allocated to bitcoin on the
discretionary basis. Not one firm that's it might be the
execution only desks might have taken client orders, but not
one single firm. And and then there must be in
it because we speak to people who are really bulleted
(20:50):
and you really like it, who with senior roles of
these firms and they get blocked by the system. What
is the influence, sorry to take over? What is the
influen It's of the system on allocating to Bigoin to.
Speaker 4 (21:03):
Your point, I think on the one end, clients are
less constrained, right, so think family offices allocations have happened, right,
They've happened already, and and already the discussion usually where
I'm quite often out of my debt is the real
crypto allocation versus CUBI antf Right. Uh, this is really
to me the kind of a deselling factor of those families.
Speaker 5 (21:24):
Some people are actually really into it.
Speaker 4 (21:26):
Uh, which is fine because if you actually go to
the actual logic of crypto, you should actually go full
speed right on the thing.
Speaker 6 (21:34):
That's a that's a difference between owning your physical gold
and holding ant called the same sort of.
Speaker 5 (21:41):
The same, same story. I agree, except that the world
think that I did spend time on uh.
Speaker 4 (21:47):
Gets complicated readily quick on the actual thing, whereas uh, yeah,
I think you have a point on like you know,
you move to more retail investing. I think a lot
of us are watching a lot of bit the environment
and what's the spirit in terms of having a recommendation
on digital assets, which I think I said that we've
(22:08):
seen very varied.
Speaker 5 (22:12):
Behavior on that spirit. So I do think that T
is starting a load it.
Speaker 2 (22:17):
Let's pick up on this idea of the next gen
client wanting something different to the older client, and exposure
to digital assets is part of that. So I would
assume that everything that you worry about, no private banks,
et cetera providing it over time. If this is what
the next gen client wants, this is what they're going
to get. Right at some point, someone's going to override
that system and make sure that everyone can put an
(22:39):
allocation into digital assets one way or another.
Speaker 3 (22:42):
So that's one thing that we know that they want,
or we hear a lot that they want.
Speaker 2 (22:45):
And the other thing we hear a lot about it
is what you mentioned earlier, which is about them wanting
a portfolio that has some social purpose or has some
impact to it, or they want to have a ESG
overlay that maybe older clients don't necessarily have. And we
hear this an awful lot of John and I talk
about it a lot on the podcast. But in the end,
when people say what does your client want, what the
client really want in the end just to make more money,
(23:07):
is to protect the money.
Speaker 3 (23:07):
That they have and make more of it CPS.
Speaker 2 (23:10):
In the end, while you have all these conversations and
I know that wealth management is becoming a much more
empathetic business than.
Speaker 3 (23:15):
Perhaps it used to be.
Speaker 2 (23:16):
A client empathy with your client being a big deal,
is it really the case in the end that the
new generation of clients is prepared to give up return
in return for social purpose or impact.
Speaker 5 (23:30):
Wow, great question. I think it depends a little bit.
Speaker 4 (23:33):
There's clear that we're facing more questioning more dialogue on
the impact of capital beyond returns. I think that that's true,
and from where I see it, I think, you know,
we're active from Asia to year Africa at least, it's
a relatively common theme takes different shapes and questions. But
(23:57):
I think next gen, as in common across geographic to
question a little bit more the impact of capital when
it comes to.
Speaker 5 (24:06):
Looking at returns.
Speaker 4 (24:07):
So the way you think about it is to have
actually benchmark for instance, which are the same. We don't
adapt the benchmark and perform whatever the way. So I
think that's usually the trade off, and this is where
you end up back to purpose having not really new
discussions frankly, in terms of do you actually bias your
actions towards capital with impact or do you maximize return
(24:30):
to actually have more philanthropy going on and that well
helping if you're not without the return or with the return,
but with the capital and no return expectation for pilanthropy
and these kind of actions.
Speaker 5 (24:43):
I think right now.
Speaker 4 (24:45):
The topic is really more about understanding our processes and
what do we take into account, you know, do we
have ESG integration, how do we look at the impact
of capital of companies we're investing into. It's difficult quantify
the trade off, which is why again we're not using
sand benchmarks for everything. I think where you do see
(25:06):
difference probably in prict markets where you have pure impact investing,
which really comes with spell those first, that's different, like
you know, you go articule line type spirit. But further
actually in pride market that's probably the closest expression, and
we do have more queries on that. Interesting, at the beginning,
it's clearly stated its impact first.
Speaker 3 (25:26):
Yeah. Yeah, and you may get low returns and can
accept that.
Speaker 7 (25:31):
Yes.
Speaker 2 (25:31):
Interesting, don We've talked about this a lot along the way,
and we keep seeing surveys, don't we showing that people
are very very keen on the purpose of their investments
until they see themselves losing money.
Speaker 6 (25:42):
Yeah, I mean I think you are an average person
feels like that because the wasn't the case, then we
wodn't constantly have bubbles, because you know, in bubbles are
just people chasing the money regard let's say what the
bubble is and and and I think it's absolutely fine
to you should have your own lines about what you
invest in. I think that people need to think very
(26:04):
hard about what those are low like lost of people.
For example, you know, the obvious one is tobacco. Lots
of people won't invest in tobacco because it's often had
to see any kind of upside from providing you know,
that kind of product. But at the same time, every
other kind of overlay comes with trade offs. You can't
just turn around and say that, well, I'm not going
(26:26):
to invest in an oil major, because they you know,
pull oil out of the ground and it gets burned
in cars, and then you know, we'll are you can
give up driving yourself partically if you'll Arguably people who
are using these services at this level will be fairly
wealthy and presumably consumers of fossil fuels and things like
(26:46):
that themselves. So I tend to think is as a
luxury item and it's a nice to have if that's
something you want. But if if there was an obvious
way kind of detracting from the most people would probably
thank you all.
Speaker 2 (27:03):
And al Durian jury is probably out on what the
next Jay client really wants. That was the first portion
of our special broadcast on the Next Generation of Wealth Management.
Next week we'll bring you more from that panel.
Speaker 3 (27:18):
Thanks for listening to this.
Speaker 2 (27:19):
Week's Maren Talk to Your Money. If you like our show,
rate review, and subscribe wherever you listen to podcasts also
be showed. Follow me and John on ex or Twitter
at marins w and John Underscore Stepic. This episode was
produced by Semisadi and Moses and sound designed by Blake
Maple's and Aaron Casper. Questions and comments on this show
and all our shows are always welcome. Our show email
is Merren Money at Bloomberg dot net
Host
Merryn Somerset Webb
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