What the Next Generation Wants From Wealth Managers

Summary

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Podcast Summary: Merryn Talks Money – "What the Next Generation Wants From Wealth Managers"

Podcast: Merryn Talks Money
Host: Merryn Somerset Webb (Bloomberg)
Guests:

• John Stepek (Senior Reporter, Money Distilled)
• Charlie Morris (Chief Investment Officer, Bytetree)
• Jean Damien Marie (Global Head of Investments, Barclays Private Bank and Wealth Management)
  Date: July 15, 2026
  Theme: How wealth management is evolving for the next generation, especially regarding portfolio construction and the role of alternative assets.

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Episode Overview

This episode explores the shifting landscape of wealth management as younger, newly wealthy clients ("next gen") come into play. The panel discusses how investment preferences, risk appetites, and notions of purpose are changing. A key focus is on the growing demand for alternative assets—including digital assets and private markets—and how the industry is grappling with traditional versus new strategies.

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Key Discussion Points & Insights

1. Defining the "Next Gen" Investor

• Who is "Next Gen"?

  • Typically the children of established wealth, beginning to manage assets themselves

  • Highly engaged, seeking control and understanding of their assets (03:20)

  • Often driven by both curiosity and a sense of purpose, not just maximizing returns

  • Different dynamic from entrepreneurs—focused more on stewardship and impact

    "Next gen for us are taking the wealth and try to figure out what's going to be the purpose of that wealth for the next generation."
    — Charlie Morris (03:58)

• Inheritance and Responsibility:

  • Next gen often inheriting in the "great wealth transfer"
  • More conversations around meaning and broader impacts of wealth

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2. What Are Alternatives? (05:03–08:10)

• Broad Definition:

  • Anything not listed equity or listed bond
  • Includes private equity, private credit, real assets (commodities, collectibles), real estate, even art, wine, coins, gems
  • Often, but not always, less liquid

• Debate Over Terminology:

  • Some so-called "alternatives" like private equity are “just equity that’s more expensive and less liquid”

  • Crypto and commodities paint a more distinct alternative picture—true alternatives are non-financial or non-traditional in nature

    "The financial services industry has been hoodwinking people for years, trying to call things alternatives, put the fees up and that sort of thing, but they're not really."
    — Jean Damien Marie (07:40)

• Crypto as an Asset Class:

  • Bitcoin and digital assets seen as “completely different”—not equity, bond, or commodity

  • Financial establishment slow to recognize digital assets due to their unconventional origins

    "Because it came from chaos and it came from the cyberpunks... it’s never been accepted by the financial services industry. It came from the wrong postcode."
    — Jean Damien Marie (08:52)

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3. Modern Portfolio Construction (10:05–13:16)

• Beyond the 60/40 Portfolio:

  • Old standard: 60% equities, 40% bonds. Now, clients want more asset classes

  • Demand for enhanced returns and more diversification

  • "Holistic asset allocation" is now mainstream, blending liquid and illiquid assets, long-only and alternative strategies

    "The need for enhanced returns and diversification has led to portfolios being more than equities and bonds."
    — Charlie Morris (10:32)

• Endowment Portfolio Trends:

  • Influence of US university endowments (e.g., Yale, Harvard), though their success may be hard to replicate at smaller scales
  • Concern that the mass adoption of these models may lead to overcrowding and declining returns

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4. Alternatives in Practice (14:13–18:14)

• Next Gen and Digital Assets:
  • Heightened interest from younger clients in digital assets
  • Easy access via ETFs or direct ownership makes this space appealing
• Private Markets – Democratization & Skepticism:

  • Trend towards buying less liquid assets (private equity, private credit)

  • Key questions: Are investors rewarded enough for illiquidity? Is it beneficial, or do private equity investments simply lock up capital with little added return?

  • The risk of trend-chasing: Are certain "fashionable" assets over-represented?

    "You were getting paid more for taking this illiquidity risk to the illiquidity premium vanishing... it left me a little bit skeptical about what the exact purpose is of adding private equity."
    — Don (16:42)

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5. Gold and Bitcoin: How Much Should You Own? (18:15–22:26)

• Gold in Portfolios:
  • Gold serves as a crisis hedge, but should not dominate the portfolio
  • Central banks up gold allocation to 29% of reserves, suggesting seriousness
  • Historically: 5–8% of portfolio is a standard allocation
• Bitcoin’s Role:

  • Theoretically, risk-matching models suggest a sizable (6–8%) bitcoin allocation—for those willing

  • Reality in wealth management: hesitation remains. Major banks are not yet officially allocating client portfolios to bitcoin.

  • Debate remains within the industry about direct crypto ownership versus ETFs, and about client demand leading eventual change

    "It's not part of our Asset allocation framework. I do have those discussions regularly... but we have not made the point of make it an investable asset as part of our asset allocation framework for now."
    — Charlie Morris (21:54)

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6. Purpose, Impact, and ESG: How Real Is the Shift? (24:17–29:02)

• Next Gen Aspirations:
  • Younger clients often ask about social purpose, impact, and ESG integration
  • For now, most private banks keep the same benchmarks as for traditional portfolios; rare to see actual return-for-impact tradeoffs unless "impact first" (e.g., Article 9 funds)
  • Some clients pursue pure impact investing—most limit to influencing decision-making or screening out “red line” sectors
• Empathy vs. Returns:

  • Conversation and interest growing, but when returns drop, surveys show clients often revert to traditional priorities

  • Impact is seen as important, but may remain a "luxury add-on" unless it comes with commensurate returns or clear personal conviction

    "We keep seeing surveys... showing that people are very, very keen on the purpose of their investments until they see themselves losing money."
    — John Stepek (27:41)

    "I tend to think it’s a luxury item and it’s nice to have if that’s something you want. But if there was an obvious way kind of detracting from the returns, most people would probably think about it twice."
    — Don (28:35)

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Notable Quotes & Memorable Moments

• On the emergence of digital assets in portfolios:

  "The toolkit is wider. What doesn't change is the need to get the right advice and construct right portfolios so you get the right outcome."
  — Charlie Morris (12:17)

• On private equity skepticism:

  "Private equity is just equity. Just equity that's more expensive. It's the same thing."
  — John Stepek (08:10)

• On the social and generational evolution in wealth:

  "NextGen has... in common across geographies, to question a bit more the impact of capital when it comes to looking at return."
  — Charlie Morris (25:29)

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Timestamps for Key Segments

• 03:11 – 04:52: Defining "Next Gen" clients & their motivations
• 05:03 – 08:10: What counts as an alternative asset?
• 10:05 – 13:16: Changing portfolio construction; 60/40 no longer standard
• 14:13 – 18:14: Next gen interest in alternatives, digital assets, and private markets
• 18:15 – 22:26: How much gold and bitcoin? Best practices and current industry thinking
• 24:17 – 29:02: ESG, social purpose, and the next generation's real demands
• Throughout: Lively exchanges and skepticism about industry trends, with a balance of data and anecdote

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Concluding Thoughts

The episode underscores the gradual but not yet revolutionary shift in wealth management priorities for younger clients. While demand for alternatives (especially digital assets) and ESG overlays is real and growing, the core remains a quest for returns and prudence. The industry is cautious, but as demographics change, major practices may be forced to evolve more rapidly—particularly in integrating crypto and giving more room for impact-focused investments.

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For more from this conversation, tune back in for the next episode.

Transcript

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[John Stepek]

Bloomberg Audio Studios podcasts Radio News.

[Merin Sumset Webb]

Welcome to Marion Talks yous Money, the personal finance edition of Marion Talks Money. In these bonus podcasts we talk about the best strategies for making the most of your money. I'm Merin Sumset Webb, 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 14 July. It was an hour long panel focused on how the world of wealth management is changing, about the rise of next generation wealth clients and the growing role of alternatives in modern portfolio construction. The panelists were John Stepek, senior reporter and author of the Money Digital newsletter Charlie Morris, Chief Investment Officer and founder of Bytetree, a leading provider of investment research in traditional finance and Digital, digital assets. We also have Jean Damien Marie, global head of investments for Barclay's Private bank and wealth management. Here's the first part of our conversation.

[John Stepek]

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?

[Charlie Morris]

That's a good question. I think for us next gen, our, you know, typically children who are really developing a sense of wealth, they're interested in investing, 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 a period for our clients where it's about engagement and trying to understand them better, I think.

[John Stepek]

Okay, so we're talking about the newly well off young, correct?

[Don]

Yes.

[John Stepek]

And be inherited. They're beneficiaries of the great wealth trend. Wealth. Yeah.

[Charlie Morris]

Which is the biggest one 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 the, yeah, the discussion often with next gen goes in many directions. And what is the same as old gen is a sense of having some kind of growth and preservation at the same time. Which is interesting. You see it's a different dynamic than entrepreneurs who are creating the wealth. Often next gen for us are taking the wealth and try to figure out what's going to be the purpose of that wealth for the next generation.

[John Stepek]

Okay, excellent. 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.

[Don]

Yeah, alternatives are basically anything that isn't listed equity or listed bonds. So you'd be talking about private assets, private equity, private credit. Obviously been in the news a lot recently. Also in the more kind of financial side of things, commodities, pretty much every commodity either direct investment in commodities or other other ways into commodities derivatives like futures and options. And also I suppose in a slightly further away from the financial side kind of like collectibles. So. And trophy assets. So anything like art or wine or coins, even gems.

[John Stepek]

We did a great podcast on gems. Vintage jewelry.

[Don]

Vintage jewelry. Anything that fits into the sort of almost like a kind of hobby turned into a financial vehicle. Classic cars, that kind of thing.

[John Stepek]

Real estate. Did you mention real estate?

[Don]

Real estate. I mean real estate. Yeah. I mean it is a form of Alternative. It's probably on the cusp, I think, but yeah, commercial property would be the other one. I mean, and also anything that's somewhat less liquid, I think you can almost think of an alternative asset is often something that's less liquid, although that's not always the case. Obviously plenty of commodities are perfectly liquid and obviously gold is broadly an alternative asset.

[John Stepek]

And commodities we divide up between listed miners for commodities, for example, would not be an alternative, but holding a pile of gold in your basement or buying a copper ETF would be an alternative. Okay, fair enough. Right. So Charlie, there's one more alternative, right, Which I'm slightly newer alternative, is that

[Jean Damien Marie]

bitcoin, is that, is that where that question is going?

[John Stepek]

That's right. Can I crypto in general?

[Jean Damien Marie]

Crypto in general, okay.

[John Stepek]

But you know, do pick up on,

[Jean Damien Marie]

I just want to, I just want to pick up on the definition of alternatives.

[Merin Sumset Webb]

Yeah.

[Jean Damien Marie]

And I would say that you could also talk about cash flow and non cash flow, so financial and non financial assets. Yeah. And so, you know, when you look at a 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, for many things like private equity, it's just a liquidity thing. You know, it's obviously long term money and that sort of thing. But the true alternatives don't, don't revolve around money. They're 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 liquidity is essential to that. So when you look at the liquidity, you know, something like gold is the vast majority of the commodity market and there's also oil, but of course it's not an investment. You know, oil is a futures contract, whereas, whereas gold can be held. And then again when you come to crypto, 75% of all crypto is Bitcoin and 25% of the other 1 million coins, or however many there are, is not Bitcoin. And it's very similar to gold versus the above ground supply of gold against the above ground supply of other commodities. So I think that's a very good way to think about it. And I think the financial services industry has been hoodwinking people for years, trying to call things alternatives, put the fees up and that sort of thing, but they're not really.

[John Stepek]

Yeah. Can I pick you up then? Come with, let's stop on Private equity, sure. 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. It's the same thing.

[Jean Damien Marie]

Yeah, absolutely. I mean, private equity, I mean, it can be very good. But of course the disparity of returns in private equity funds is vast. Whereas if you buy an index fund, everyone gets the same outcome. So there's a very different sort of fundamental thing going on there.

[John Stepek]

Okay, but go back to crypto as an as. Can I call it an asset class?

[Jean Damien Marie]

Well, I think so.

[John Stepek]

Bitcoin, an asset class.

[Jean Damien Marie]

Has it been granted permission from someone high up in financial circles?

[John Stepek]

I don't know.

[Don]

I don't know what the rules are here.

[Jean Damien Marie]

Well, there are rules, of course, and that is that if it's created by the Federal Reserve, the Bank of England or Goldman Sachs 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 cyberpunks and that sort of thing, it's never been accepted by the financial services industry. So that's, it's where it came from. It came from the wrong, the wrong postcode.

[John Stepek]

So.

[Jean Damien Marie]

And that's why they don't like it. And you know, everything else that you know, if it comes out of Goldman Sachs, that it's always very good, you must buy it. And so there's that. But I think that it is an asset class. Absolutely. It's something completely different. And you go back to the history of asset classes. We probably started off with, I would think commodities must have come first, the first loaf of bread. And then we progressed from there with debt and then equity in the, what, 13th 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. It's something different. It's digital, it's virtual, but it's real.

[John Stepek]

Okay, so we know what it is and we'll come back to what it is.

[Jean Damien Marie]

Yeah. What it isn't, we know what it isn't.

[Merin Sumset Webb]

What is it? What is it?

[Charlie Morris]

What, what's that?

[John Stepek]

We'll come back to use cases and all that in a minute. We'll have a, we'll have a nice row Everybody in about 20 minutes when we've covered some of the other stuff. Right, let's go back to actual portfolio so maybe you're older gentlemen have classic old fashioned or did at least have old fashioned 6040 portfolios. And apart from maybe a little bit in their vintage cars and jewelry collections, they were very clear equity bond. But that portfolio construction is no longer the default. No.

[Charlie Morris]

I think to Charlie's point earlier I think we've seen really the adoption of more asset classes. We can debate what an asset class is later but clearly today I would say the the need for enhanced returns and diversification has led to portfolios being more than equities and bonds, not new.

[Jean Damien Marie]

Right.

[Charlie Morris]

Because we've been discussing hedge funds for a very long time product equity now product markets in general are more popular. So they are becoming really part of any asset allocation you can find on the street today. I think 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 any liquidity premium one way or another. So today I would say so for our own clients, if you come and you are not constrained and we can have a very very broad discuss the starting point is going to come from what we call a holistic asset allocation. Discussion will come first and foremost with liquid illiquid long only long short and it will be a lot more than 60, 40 for sure that we see increasingly going into I would say more mainstream portfolio. I think it's been the norm for a long while.

[Jean Damien Marie]

Right.

[Charlie Morris]

A lot of families have been studying us end donuts for a very long time and tried to to be as good as another topic we can discuss. And you see this kind of endowment spirit now trickling down up to or down to very small portfolios because it's easier today to actually build a 50, 30 something.

[John Stepek]

But maybe it's trickling down exactly the point where it's maybe not going to work so well anymore. Those endowment portfolios have worked brilliantly during the great heyday of private equity. Yeah, I think it depends on how to an end.

[Charlie Morris]

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 client and plan that clients can survive over time to your point on the weight and the likes. I do think that if you can have the time to compound which is such a wonder, being long and full on equity risk is a good thing usually. Whereas if your time horizon is shorter clearly you should be a little bit less like in the US and have more yield in the portfolio. So I think look, the toolkit is wider. What doesn't change is the need to get the right advice and construct right portfolios 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 end type client, maybe not always for the right reason.

[John Stepek]

So what's in fashion that maybe some people are having too much of in their portfolios?

[Don]

So.

[Charlie Morris]

Well, a good question. I think the, with the next gen, to Charlie's point, we've been having a lot of discussions on digital assets for sure that they own one way or another. Think most things are interesting topics. This is really probably something. It's an asset class we can debate but it's really something that's all across the space spectrum like from very, very wealthy families to actually mainstream investors because it's easy actually to get to it. Again it depends how you want to get to it through ETF or real crypto, etc. So that, that piece for sure. I think the, the more private market, the, the it's all about the democratization right now of, of illiquid stuff. Which you know, for me you need to, to stay true to, to, to having quality investment in those portfolios. So you need to know what you, what you're giving up for more liquidity on the way.

[John Stepek]

Okay, well let's imagine, all right. Sake of argument that I'm a 30 year old investor. I know 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 term investor. I don't require much in the way of yield at the moment. What am I going to get from you? Am I going to get 40% equity, 20% bonds and 40 in alternatives. How's it going to work? Is there a default that you have?

[Charlie Morris]

So we have a, we have a framework and clearly a 30 year old, you know, you'll be in accumulation. So we should be really about equity risk premium one way or another if you want. And then question again is like what, what kind of illiquidity can you afford 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 guy as well. The, the it's good not to be short cash. It's a good idea in general. So we built a plan you can have in good time, bad times. So equity will be a big part and the alternative part will probably be around a combination of equity or return Seeking portfolio type strategy, some more equity and a bit of diversification on the way.

[Jean Damien Marie]

So.

[Charlie Morris]

But equity will be, will be the

[John Stepek]

dominant factor, even though we can label some things, alternatives, etc. Etc. In the end is going to still be a majority equity, which is going to be a 9010 in the end sort of thing.

[Charlie Morris]

Why? Yeah, we'll define what the right cushion is for you so you can sleep at night. But the point we just made earlier around private equity, it's equity is leveraged, right? And it's liquid. It's equity again.

[John Stepek]

And our concern, and John and I have been talking about this for ages, the democratization of private equity is not necessarily ideal. Right.

[Don]

Well, the timing, isn't it? Because I suppose this is the other thing, isn't it? Private equity benefited from ultra low interest rates for a long time, also from the fact that it was small and that was big. And I think one of the things you were mentioning kind of made me think if we're talking about illiquidity, you should be getting rewarded for taking illiquidity risk. Obviously 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 so smoothly changed the sale pitch. You're getting paid more for taking this illiquidity risk to the illiquidity 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 purpose is of adding private equity to a portfolio of publicly listed, equally easily accessed liquid equities.

[John Stepek]

And as Don always says, if you want access to small companies in the uk, at least inexpensively, boy, have we got a deal for you.

[Charlie Morris]

Yeah, yeah, I think the. No, you make a very good point. I think at the end of the day, as Charlie mentioned before, it's about being selective. You know, is it a good idea to invest in the private equity market overall? Can debate now we can see people who've been able managers who've been able to actually deploy capital and actually make most of the return through operational improvement. Long story short, less leverage, less multiple expansion. If you can repeat that over time, probably you're happy to pay for alpha. Over, over, over, over. Better of our equity better not to your point. Yeah, I can see the point. I, I will always remember and point out a few clients towards the, you know, 07 vintages right. The seven vintages. You make money or so many people just time and get got out.

[Jean Damien Marie]

Right.

[Charlie Morris]

You made money because you, you are stuck. But I see it's a good thing to be stuck with skills. I agree that's important. But yeah, I can see your point. I do think the. Again, for the right portfolio with the right construction, it makes sense. Is it the Holy Grail and the magic wand?

[Merin Sumset Webb]

No.

[John Stepek]

Yeah.

[Charlie Morris]

No.

[John Stepek]

Yeah. Let's go back to crypto, let's get back to bitcoin. We talk about gold a lot, right? John and I, we talk about gold, we write about gold a lot. And when we talk about how much gold should you have in your portfolio, even if you're a gold bug, how much should you have? And the answer always comes down to. And this is. Sebastian Lyon at Troy always puts this very well. He says you want enough for it to make a difference in a crisis, right? So 1% isn't enough, 2% isn't enough. Question what is enough? So in a crisis, you want your portfolio to have enough that, you know, it saves you to a degree of works as a hedge 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? And for I think some of the Troy portfolios, it ends up being 9, 10% and then sometimes it goes down to 7 and sometimes it will go up to 14. So we tend to think maybe minimum 5ish.

[Jean Damien Marie]

Yeah, well, I think the answer I'd point people to is the World Gold Council's study, which they did about 10 years ago, which came to it concluded 5 to 8%, which means 8%, basically. And they were being a bit cautious there. The central banks, of course, are now at 29% with their reserves, so they're taking it pretty seriously. And you mentioned the good times. Well, we've had most of the times. The last 25 years have been the good times, but gold has beaten the S and P, including after dividends. And so that's in 26 years. Gold is ahead of the S and

[John Stepek]

P. Still, has gold been constantly anticipating the bad times? Perhaps?

[Jean Damien Marie]

Well, gold doesn't have to. I think it's a bit of a misnomer 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 at the moment, particularly post Ukraine 2022 is that gold is an important piece of the central bank reserves. Always has been. When those reserves are growing very, very quickly, the gold price is very, very strong. And when those reserves have been growing more slowly or indeed contracting, then the gold price has been weak. And so, you know, people ask about this year. Well, you know, when. When they have got problems in the Strait of Hormuz 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. And so the margin, there's less gold buying in 2026 than there was in 2025. 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 the bottom line is what's the right weight of gold in a portfolio? My view would probably be 5% if you have bearish gold and 20% if you're bullish gold. Have a view.

[John Stepek]

Okay, have a view and take a bit. No less than five. All right, so with that in mind, with that in mind, what about bitcoin?

[Jean Damien Marie]

Well, there's a question, and I'd have to revert to my bold index because I couldn't possibly know the answer intuitively. I would have to go and do a little bit of financial math. And if you do some volatility, I'm interested. I mean, the Barclays. Do you use volatility to do asset allocation?

[Charlie Morris]

It's part of it.

[Jean Damien Marie]

It's part of it, Yeah. I mean, it's an important input to a lot of people who do decide how much allocation to have to various things and cross correlations and so forth. But, you know, bitcoin and gold have low correlation high at the moment, possibly. But generally speaking, over the last five, 10 years, they've been very low. And the volatility matching the risk weighting would come out and say about 42% in Bitcoin and about 58 gold.

[John Stepek]

Okay.

[Jean Damien Marie]

So on that basis, if you're 8. If you're 8 in gold, then you probably should be 6 or 7 in Bitcoin. That might seem high to people, but the logic stacks up.

[John Stepek]

I get it. Would you ever put that much into a portfolio? You ever give someone a portfolio with 8% bitcoin?

[Charlie Morris]

So that's a really good question. So I was waiting for it.

[John Stepek]

So you were ready? I'll say. We didn't give you prep time.

[Don]

No.

[Charlie Morris]

Well, no. So, yeah. So it is not part of our Asset allocation framework. I do have those discussions regularly, almost less so, I must say, those days with clients. So therefore now. So I agree with Charlie on the volume, on the volume side, but we have not made the point of make it an investable asset as part of our asset allocation framework for now.

[Jean Damien Marie]

Okay, can we ask about that? Because Marin, 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 a discretionary basis. Not one firm. It might be the execution only desks might have taken client orders, but not one single firm. And there must be. Could we speak to people who are really bullish and who really like it with senior roles at these firms and they get blocked by the system. What is the influence, sorry to take over there. What is the influence of the system on allocating to Bitcoin?

[Charlie Morris]

To your point, I think on the one hand clients who are less constrained, right? So think family offices allocations have happened, right? They've happened already. And already the discussion usually where I'm quite often out of my depth is real crypto allocation versus you buy an etf.

[Don]

Right.

[Charlie Morris]

This is really to me the kind of a decelling factor of those families. Some people are actually really into it, which is fine because if you actually go to the actual logic of crypto, you should actually go full speed on the thing.

[Don]

That's a bit like the difference between owning your physical gold and holding an ETF's gold. It's the same sort of same, same story.

[Jean Damien Marie]

I agree.

[Charlie Morris]

Except that the wallet thing that I did spend time on gets complicated relatively quick on the actual thing. Whereas yeah, I think you have a point on like you move to more retail investing. I think all of us are watching a little bit the environment and what's the spirit in terms of having a recommendation on digital assets, which I think it's fair to say that we've seen very varied behavior on that spirit. So I do think the tide is turning a little bit.

[John Stepek]

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 you know everything that you worry about, no private banks, etc. 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 allocation into digital assets one way or another. So that's one thing that we know that they want. We hear a lot that they want. And the other thing we hear a lot about 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 kind of ESG overlay that maybe older clients don't necessarily have. And we hear this an awful lot. And John and I talk about it a lot on the podcast. But in the end, when, when people say, what does your client want? What the client really wants in the end is to make more money, is to protect the money that they have and make more of it.

[Charlie Morris]

Cpi.

[John Stepek]

So in the end, while you have all these conversations, and I know that wealth management is becoming a much more empathetic business than perhaps it used to be, and 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?

[Charlie Morris]

Well, good question. I think it depends a little bit. We're facing more questioning, more dialogue on the impact of capital beyond returns. I think that that's true. And from where I sit, I think we're active from Asia to here, Africa, Middle East. It's a relatively common theme, takes different shapes and questions. But I think NextGen has in common across geographies to question a bit more the impact of capital when it comes to looking at return. So the way we think about it is to have actually benchmarks, for instance, which are the same. You 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 to actually have more philanthropy going on and helping? If you are without the return or with the return, but with the capital and no return expectation through philanthropy and these kind of actions, I think right now 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 to quantify the trade off, which is why again, we're not. We're using same benchmarks for everything. I think where you do see a difference, probably in markets where you have pure impact investing, which really comes with purpose first, that's different. Like, you know, you go article 9 type spirit. But further, actually in private market, that's probably the closest expression and we do have more queries on that. We're interested in it at the beginning. It's clearly stated it's impact first.

[John Stepek]

Yeah, yeah. You may get lower returns and accept that 100%. Yes, 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.

[Don]

Yeah, I mean, I think your average person feels like that because if that wasn't the case, then we wouldn't constantly have bubbles because, you know, bubbles are just people chasing the money regardless of what the bubble is in. And I think it's absolutely fine. You should have your own red lines about what you invest in. I think that people need to think very hard about what those are low. Like lots of people. For example, you know, the obvious one is tobacco. Lots of people won't invest in tobacco because it's often hard to see any kind of upside from providing 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 to invest in an oil major because they pull oil out of the ground and it gets burned in cars. And then you can give up driving yourself. Particularly if arguably people who are using these services at this level will be fairly wealthy and presumably consumers of fossil fuels and things like that themselves. So I tend to think it's a luxury item and it's nice to have if that's something you want. But if there was an obvious way kind of detracting from the returns, most people would probably think about it twice.

[John Stepek]

All in all, Jury Jury is probably out on what the next gen client really wants.

[Merin Sumset Webb]

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. Thanks for listening to this week's Marian Talks yous Money. If you like our show, rate, review and subscribe wherever you listen to podcasts. Also, be sure to follow me and John on X or Twitter at mariansw and John underscore Stepek. This episode was produced by Sama Saadi and Moses Andam Sound designed by Blake Maples and Aaron Casper. Questions and comments on this show and all our shows are always welcome. Our show email is merrinmoneylumberg.net.

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