In the Classroom I

Preserving Wealth: Wharton Launches New Program for High-Net-Worth Investors

Between the start of the year and October 11, 2008, investors in U.S. corporations suffered $8 trillion in losses, and declines in other countries have averaged about 40 percent. It is no wonder that investors are disillusioned with their wealth management advisors. A recent survey found that more than four-fifths of high-net-worth investors expected to move money away from their current advisors.

In response to the pressing need for investment and wealth management knowledge in the present economic crisis, Wharton has developed a new program, Wealth Preservation in an Age of Uncertainty, to be held in December, in time for investors to consider end-of-year tax implications of their decisions. The program is designed for investors with more than $5 million in assets and will draw upon diverse experts from Wharton’s top-ranked Finance Department.

“We haven’t seen this environment before,” says Thomas J. Colligan, Wharton’s vice dean of executive education. “Investors are asking: How do we best cope in an uncertain time? At Wharton, we have tools that can help people in times like this. I don’t think there is a faculty in the world that better understands the markets. We are independent. We are a research university. Access to the best research in the world in a time of uncertainty is a tremendous advantage.”

The program draws upon not only Wharton’s expertise in finance, but also its extensive experience in delivering executive education, including wealth management programs. For over 125 years, the Wharton School has been the uncontested thought leader in the field of finance, developing influential financial tools for global markets and helping formulate financial practice and policy.

Lost Trust

Wealth Preservation in an Age of Uncertainty meets a crucial need for investors who may have lost trust in their long-run investment plans or even the financial system itself. “With the uncertainty in the financial markets over the last year or so, many high-net-worth investors have questioned not only the advice of their trusted advisors but the basic institutions that form the bedrock of our markets and our financial system,” says Christopher Geczy, academic director of the program and assistant professor of finance. “Some large and well-known firms with substantial advisory operations have failed, leaving investors feeling anxious over the future of their wealth management.”

He points out that experts have fundamental disagreements about the financial system. Some analysts contend that the rise of more sophisticated financial products has resulted in increased risk sharing for the betterment of all, while others argue that the net effect has been to the general detriment of investors. This debate and the ongoing financial crisis have resulted in increased confusion and uncertainty among investors as to what to do now and in the long run.

Clarity and Strategies

The three-day program in December addresses the key concerns of high-net-worth investors and the impact of recent events in financial markets on their investment decisions. This program gives investors the information they need to make sound investments in uncertain times. It examines such issues as how the economy relates to investment choices, the fundamentals of investment theory and practice, common mistakes high-net-worth investors make and how to avoid them, and how to evaluate advisors and build effective relationships with them.

The new program is part of Wharton's larger Wealth Management Initiative, currently in development to address wealth management challenges in today's economy and in general.

• Wealth Preservation in an Age of Uncertainty