Generational Wealth

EG: And how would you compare and contrast the common characteristics and differences between the families that do successfully maintain great fortunes over generations, with those that lose great fortunes?

PO: Think about a great entrepreneur as a champion. Roger Federer became extraordinary by focusing for decades on mastering tennis. Nobody would conclude from his success that he should become a chess grandmaster at 50.
 

Yet successful entrepreneurs sometimes make precisely this transition with their wealth. They have been exceptional at building a business and understandably assume that the same skills will make them exceptional investors. Our numbers illustrate the challenge. Between 2000 and 2026, the fortunes in our study grew by approximately 2.9% annually, compared with 4.8% for the Swiss Market Index and 2.6% for Swiss government bonds. Only 34 of the original 300 outperformed the SMI.
 

We see four principles as particularly important for preserving wealth: family values, a sound investment philosophy, diversification and a sustainable spending rule. The concentration that creates a fortune can eventually threaten it. Concentration can create great wealth; diversification helps preserve it.

EG: Why are asset protection and wealth structuring such fundamental tools for ultra high net worth individuals to deploy, in order to ensure their fortunes transcend across multiple generations?
 

PO: Ideally, wealth creation and wealth preservation begin in parallel. Continue investing in the business where you have an exceptional advantage, while gradually building diversified family wealth outside it. Diversification allows a family to participate in other exceptional businesses rather than depending indefinitely on its own. Eventually, that diversified wealth may be what supports future generations.
 

But successful succession requires more than investments. It is key that families foster entrepreneurship, humility, responsibility and long-term thinking across generations – and create structures that support those values. A family can have an excellent portfolio and still suffer through excessive spending, taxation, succession problems or family conflict. Good structuring asks: What is the wealth for? What is our investment philosophy? How much can sustainably be spent? Which risks should we retain, and which should we diversify away? And how do we prepare the next generation to take responsibility?
 

The objective is not complexity. The objective is resilience.
 

EG: IndexInvestor AG is the first asset management company in Switzerland to manage assets solely in an evidence-based manner. What are the core traits that define successful evidence-based asset management in 2026?
 

PO: The majority of our clients are leading doctors. If you had a serious illness, would you prefer a doctor who follows intuition and the latest fashion, or one who combines experience with the best available scientific evidence? We believe wealth management deserves the same standard. Evidence-based investing starts with intellectual humility. We distinguish between what we know, what research suggests is probable and what nobody can reliably predict.
 

Instead of forecasting the next recession, interest-rate decision or winning stock, we ask what decades of financial research tell us about diversification, risk, expected returns, costs and investor behaviour. Where robust evidence exists, investors can systematically target characteristics such as value, company size and profitability.
 

Evidence has another benefit: understanding why you invest gives you the confidence to remain invested when markets become uncomfortable. Being able to stay invested when others turn away is an important key to long-term success.

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EG: Warren Buffett stated that ‘a low-cost index fund is the most sensible equity investment for the great majority of investors’, while portfolio manager Douglas Dial said ‘indexing is an extraordinary sophisticated thing to do. If people want excitement, they should go to the racetrack or play the lottery.’ Why is index investing such a trusted and reliable investment strategy for wealth building and stability, and how may this be particularly relevant to retirees aged 50+?
 

PO: The genius of indexing is accepting an uncomfortable fact: we do not know which companies will create the extraordinary returns of the future. Only selected businesses ever reach the stock exchange, and among listed companies relatively few ultimately contribute a disproportionate share of long-term wealth creation. Instead of trying to identify those winners beforehand, broad diversification allows us to participate in them.
 

Investors sometimes think accepting the market return means accepting mediocrity. I think the opposite can be true. Being comfortable with the market average can be a remarkably sophisticated decision. For investors over 50, avoiding unnecessary mistakes becomes increasingly important. They need less investment excitement and more of a robust process for preserving purchasing power and financing their future.

   

EG: How would you say that your degree in Economics and Business Administration at the renowned University of St. Gallen helped to prepare you on your journey towards providing extraordinary value to clients as an entrepreneur in the world of wealth management today?

PO: IndexInvestor is one of the oldest spin-offs listed at the University of St. Gallen, and our continuing research collaboration helps us remain close to developments in academic finance.The financial crisis provided the energy to start IndexInvestor. It made me question how much conventional wealth management was really based on evidence and how much on forecasts, tradition and financial industry economics. It is about making sure that investors’ interests and evidence come first.
 

One question has guided me ever since: If this were my own family’s money, would I invest it in exactly the same way?

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EG: Your asset management approach is not profit-orientated and you only invest with strategies that have very good scientific evidence of long-term success. Why is this better, and give us an example of how this has created positive investment experiences among your clients?

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PO: IndexInvestor is client-owned. We invest our own family wealth according to the same principles we recommend to our clients. This creates alignment and a simple test for every investment decision: would we make the same decision with our own money?
 

We prefer a simple, diversified and inexpensive solution supported by strong evidence over a product that may be more profitable for the provider. The benefits become particularly visible during difficult markets. Investors who understand why their portfolio is constructed as it is are less tempted to sell after declines or chase yesterday’s winners. Avoiding one major behavioural mistake can be worth far more than finding the next fashionable investment.
 

EG: Tell us more about your Value Network and why IndexInvestor AG has become the trusted source for wealth management by elite doctors, renowned specialists and successful entrepreneurs in Switzerland?
 

PO:We specialise in evidence-based wealth management for top doctors and entrepreneurs. They are exceptional in their professions, but their time is scarce – and they should not have to become professional investors. We therefore focus on what we do exceptionally well and use our Value Network to connect clients with carefully evaluated specialists in areas such as tax, pensions, banking and practice development.
 

Our role is to understand the evidence, coordinate the relevant expertise and sit on the client’s side of the table. We deliberately remain a boutique and work exceptionally well with a select group of clients. The ultimate objective is clarity and peace of mind, allowing them to devote their time to their profession, business and family.
 

EG: Why is your book Vermögen schützen: Evidenz und Praxis (Protecting Assets: Evidence and Practice) such a fundamental component of the evidence-based approach, and how can the knowledge obtained from this significantly improve prospects for both beginners and seasoned investors?

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PO: Investing can be delegated, but responsibility cannot be fully outsourced. Investors should understand how markets work, what can realistically be expected and whether their financial providers are acting primarily in their interests or their own. That is the purpose of Vermögen schützen. Evidence provides a framework for distinguishing between decisions supported by data and ideas that merely sound convincing. Knowledge does not eliminate investment risk. It helps us distinguish between risks worth taking and risks for which we are unlikely to be rewarded.
 

EG: Tell us about the numerous advantages of a virtual family office for ultra high net worth individuals?

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PO:  Many successful doctors and entrepreneurs face family-office-type challenges long before establishing their own family office makes economic sense. A virtual family office can provide much of the intellectual infrastructure: investment management, retirement planning, family meetings, preparing heirs and coordinating tax, pension, estate and legal specialists – without building an entire organisation.
 

For established family offices and ultra-high-net-worth investors, our role is deliberately different. We have developed an exclusive evidence-based Swiss equity strategy, combining broad Swiss market exposure with systematic exposure to profitability, value and small-cap premiums. It allows sophisticated investors to access our investment expertise while retaining their existing family-office structure.

EG: As an award-winning firm with decades of experience in successful evidence-based asset management, what can family offices, elite doctors, and entrepreneurs look forward to when working with you?
 

PO:  Ultimately, peace of mind. For our wealth-management clients, that means a coherent philosophy, coordinated decisions and knowing that someone is sitting on their side of the table.

For family offices and ultra-high-net-worth investors, we offer our exclusive evidence-based Swiss equity strategy designed to complement their existing structures. We do not promise excitement, nor do we promise to predict the future. We offer something we believe is more valuable: evidence, alignment of interests and the discipline to follow a sound strategy over decades.
 

In investing, trying to be smarter than everyone else can be surprisingly expensive. Sometimes accepting the market – intelligently – is the smarter way to invest.   EG