How IPI's Wharton Program Taught One Family to Be Wise about Their Wealth
Like many members of the Institute for Private Investors, when a veterinary scientist sold the family business he and his wife had created, he realized he had become the CEO of a business he didn't understand — his own money management firm.
"I didn't know that world," he said in an interview at the IPI office in New York. "We live in the middle of the country, in a small city, and had to make the transition from individual mutual fund investing to portfolio management." At first, he said, "I made some mistakes, so I went to a couple of conferences to learn how to become an investor." At one, when he asked where he could learn more, a panelist suggested the Institute for Private Investors.
"The principles are the same whether you're a widow with $200,000 or the Yale endowment."
As he and his wife educated themselves, they realized they wanted even more: a firm foundation in private wealth management, not just for themselves but to pass on to their children.
"A lot of families can't talk about money," the principal said, but they wanted their family to learn as much as they had. "As the first generation, we came in ignorant, but we're long-range planners," he said. "We have three well-educated children, all married. Any one of them might pick up the pieces, but they weren't educated in the area of investments. We couldn't do it ourselves. We needed someone to put it together, who knows more than we do."
One of IPI's goals was to help member families educate the next generation in the wise use of the wealth they would inherit. Over time, IPI realized that IPI forums, with their wide variety of topics and levels of sophistication, were already beyond the basics. What was needed was an organized, intensive academic experience that would give new members and the next generation fundamental investment knowledge.
The inaugural 5-day course on Private Wealth Management at the Wharton School was launched in 1999 with a class of 26, including three of these family members.
After that first year, the family made a strategic decision. Not only would their own three children attend the Private Wealth Management program at Wharton, so would their spouses. "We love them," the principal said, "and it's the best way to keep the family together. Educate them all, so there are no second-class citizens."
When the second round of family went to Wharton in 2001, the wife of the principal went again, to work with her family on the week-long case study and to build on the foundation she had acquired.
Now, every August when the family gets together, their shared experience at Wharton "has allowed us to upscale our discussions," the principal said. "We have a common subject to talk about — openly. Even our daughter-in-law, the artsy one, wants to talk to me about money management."
As a result of their shared experience, the principal feels, "almost anyone in a family with some degree of wealth could benefit from the Wharton program. The way the information is presented could be useful for anything from balancing a checkbook to managing your retirement. It's that fundamental. The principles are the same whether you're a widow with $200,000 or the Yale endowment."
© 2007 The Wharton School, University of Pennsylvania
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