The universities assume that the demand for this type of program will grow rapidly in coming years as entrepreneurs such as Seidman sell their companies, turn their attention to managing their wealth rather than building it and eventually pass it on. Boston College researchers estimate that $41 trillion will pass between the generations by 2052—the largest intergenerational transfer of wealth in U.S. history—and this will create an enormous new class of affluent individuals who need to understand how to manage and deploy their assets intelligently. The universities want to profit from this growing demand for financial and philanthropic acumen.

“Making money intelligently is easier than giving money away intelligently,” says sociologist Paul Schervish, director of the Center on Wealth and Philanthropy at Boston College. “There is a lot of snake oil out there. The question is how to discern what is not.”

Boston College, considered to be a leader in research on philanthropy, offered a pilot course on wealth management last January and hopes to add it to its executive education roster as soon as it can put the funding in place to hire a program director. This fall, New York University will join the pack when it launches a class targeted specifically at wealth holders. It will complement an eight-course certificate program in wealth management for financial advisors that it relaunched last year. Ten percent of that program’s students were wealthy individuals seeking to manage their money themselves.

Most colleges and universities present these programs through executive education arms of business schools. Some of these courses are highly targeted and intensive, aimed at sophisticated business people who need help navigating new investment opportunities; children and spouses of wealth holders who know little, if anything, about basic investing principals; and family wealth advisors. For example, Harvard Business School’s Families in Business program is a weeklong seminar offered twice yearly to owners of U.S. family businesses. (Harvard offers an additional program for families abroad.)

John Davis, faculty chair of the Harvard program, explains that the course attracts family offices and foundations as well as operating companies. Demand for the course, which costs $30,000 for up to four family members, is so strong that the university is looking to add a third session by 2007. “We are in a very fortunate position with the Harvard brand to be able to attract people,” he says. “We are helping families address what they have on the plate right now and also get their focus five to 10 years out. One of those issues is the management of money and wealth.”

Loyola University is in the process of assembling a similar program through its Family Business Center. Loyola also plans to launch a new master’s degree program in wealth management for the 2006 academic year, with tracks in wealth management and risk management. The courses will be marketed to wealth holders on an à la carte basis.

Universities emphasize their independence when positioning their programs to compete with the existing offerings from the large private banks and trust companies. As private investors’ confidence in financial institutions has suffered in recent years because of the wealth destruction of the 2001–02 bear market and the spate of high-profile scandals at some banks and asset management firms, the universities believe their position outside the financial industry gives them a marketing edge. “This is a burgeoning trend driven by wealth holders who are more concerned about the quality of choices they are making,” says Scott Fithian, chief executive of the Legacy Companies, a Boston-based wealth management advisory firm that now brings in university management and finance professors to instruct its staff.

In any case, many individuals and families are looking to better understand their investment options and to be able to vet potential advisors and asset managers in a more rigorous fashion. Indeed, according to a recent survey by the Spectrem Group, a Chicago-based consulting firm, 30 percent of affluent individuals now consider themselves self-directed investors, meaning they make their investment choices without the help of an advisor. This is a much higher percentage than Spectrem found in similar surveys in years past. The recent swell in the number and complexity of investment vehicles—from fine art to hedge funds—mixed with the complexity of myriad philanthropic options are also driving interest in these courses.

“You have to know enough to ask the right questions,” says Anthony Macari, assistant dean of the School of Continuing and Professional Studies at New York University. “These courses give you the ability to do your own due diligence and feel confident you know enough to know the person advising you is good.”

Because these college programs are still nascent, it is difficult to say if their ostensible independence will be an asset or—as some bankers maintain—a liability when seeking to attract individuals in search of best-of-breed wealth management insights. One attempt to reach out to the next generation of wealthy fizzled this summer when NYU pulled the plug on a proposed camp for children because of the lack of interest. Nonetheless, school administrators believe that programs for private investors could provide an enticing revenue stream. “Our business school is trying to target niche markets where we can excel and where our competitors are not really focusing,” says Steven Todd, associate professor of finance at Loyola and administrator of the school’s new wealth management program. He adds that no other Chicago area universities offer such a course of study. “We are going to aggressively market this program.”

he programs all cover financial basics to some extent, often using a case-study approach. Increasingly, they also focus on soft issues such as family dynamics and identifying a moral purpose to guide decisions about giving. “I thought nobody would want the touchy-feely stuff. I was about 180 degrees wrong,” NYU’s Macari says. “The ability to act as coach and counsel to someone who is wealthy goes beyond knowing how to make sure the kids are provided for.”

NYU is creating a course on the psychology of wealth management that will delve into issues such as how to have a candid discussion about death, wealth transfer and relinquishing control of assets. “When you’re dealing with wealthy people who made the money themselves, they are very strong willed and smart and aggressive,” Macari says. “The only way you can give them information like this is in an efficient way.”

One of the few efforts in this field with a proven track record is the Private Wealth Management program at the Wharton School, created in 1999 in collaboration with the Institute for Private Investors (IPI) in New York. The program saw a dip in enrollment after 9/11, but has since recovered and now has a waiting list. Some 250 people from 18 countries have participated in the retreats at Wharton’s Philadelphia conference center. No more than 30 students can participate at any given session.

“There is a lot of snake oil out there. The question is how to discern what is not.”

The program uses a case-study method to teach investment principles, wealth transfer and philanthropy. Participants use different management theories to formulate an investment policy for a fictional patriarch who has just liquidated substantial assets. Wharton professors and experts from other universities guide the students, who range in age from teenagers to octogenarians, and often include several generations of the same family.

In response to requests from Private Wealth Management students, Wharton this year is offering a separate retreat for wealth advisors. The course will also consist of five days on campus and will cover many of the same topics as the investors’ program. In 2004, IPI conducted a survey of investors showing that nearly half of them wanted their advisors to be better financial educators. More than half also responded that they wanted advisors to be better attuned to their unique needs.

Charlotte Beyer, founder and chief executive of IPI, explains investors are looking for advisors who are trained in family dynamics. All too often, lack of such training “really handicaps even the smartest of investment professionals,” she says.
 
Privacy concerns drove Wharton’s decision to create a separate program for advisors. “It would have changed the atmosphere in the classroom if famous last names were trying to figure it all out and we brought in investment professionals,” Beyer says.

Louise Kramer is a New York–based writer who writes frequently for the New York Times and other publications.