How to build a wealth management course: a complete guide for lecturers

Central question: What makes wealth management different from selling investments, and what does a client-centred duty require in practice?

Wealth management is best introduced as an integrated decision process. The adviser or relationship manager must connect investments to goals, liabilities, taxes, retirement, protection, estate considerations and the client's ability to stay with the plan. The opening session should therefore establish the professional ecosystem and the ethical test that runs through the rest of the course: a technically plausible recommendation is not enough if it is unsuitable, poorly evidenced or impossible for the client to understand.

What this concept covers

• Private wealth management, financial planning, private banking, family offices and investment advisory.
• Client segmentation by complexity rather than prestige labels alone.
• Fiduciary, suitability, conflicts, disclosure and professional judgement in globally portable terms.
• Advice versus product distribution and the economics of fees.
• The role of digital tools, data, human judgement and trust.

Learning outcomes

Students should be able to distinguish advisory models, identify conflicts of interest, explain the client's decision problem and evaluate whether a recommendation is suitable rather than merely profitable.

Supports Course Outcomes 1, 2 and 10.

How to teach it

Start with three versions of the same recommendation: a commission-driven product pitch, a portfolio-only recommendation and an integrated wealth plan. Ask students to identify what evidence each version ignores. Then use a short conflict-of-interest role-play in which a relationship manager must explain fees, alternatives and uncertainty in language a client can understand.

Case-style example

Aster Private Bank advises Maya, age 46, who has $1.8 million in investable assets, a $420,000 mortgage at 5.2%, $190,000 of concentrated employer stock and a goal to fund $70,000 a year of university costs for two children from age 18. The bank can earn 1.2% upfront from Product A or 0.25% from a lower-cost equivalent. Task: students recommend an approach, quantify the fee difference and defend how conflicts should be disclosed. Two conclusions can be defensible if total service value differs. Students discover that suitability depends on goals, costs and duty, not only expected return.

Where students struggle

Students often use "wealth management" as a synonym for investment management. The corrective is to ask which client problem is being solved and which risks remain outside the portfolio.

Reading and a quick check

Use the CFA Institute overview of private wealth management. Ask students to write a 100-word definition of wealth management that could sit in a course handbook without referring to any one product.

Where it leads

Once students understand the professional duty, they need a disciplined way to discover what the client is actually trying to achieve.

Central question: How do advisers convert a client's life circumstances into financial facts that can support a recommendation?

Client discovery is the analytical foundation of the course. Students should learn to build a household balance sheet, distinguish financial capital from human capital, separate goals by time horizon and priority, and identify liabilities or liquidity needs that constrain the investment plan. The teaching emphasis is evidence gathering: before students optimise a portfolio, they need to know what the portfolio is for.

What this concept covers

• Goals-based discovery and prioritisation.
• Household assets, liabilities, income, expenditure and emergency reserves.
• Human capital and its relationship to financial capital.
• Time horizon, liquidity, legal and family constraints.
• Data quality, missing information and assumptions logs.

Learning outcomes

Students should be able to construct a client fact pattern, calculate net worth and savings capacity, classify goals by priority and horizon, identify missing information and explain how human capital changes risk capacity.

Supports Course Outcomes 2, 4 and 8.

How to teach it

Give each team a deliberately incomplete client file and make them submit five questions before they are allowed to calculate anything. Then compare what changed after the missing answers were revealed. A useful variation is to give two clients the same financial net worth but different job security, dependants and pension entitlements.

Case-style example

Nolan and Priya, both 39, earn $210,000 combined, hold $310,000 in retirement accounts, $95,000 in cash and a home worth $780,000 with a $510,000 mortgage. Priya's income is stable; Nolan's $120,000 salary is highly cyclical and his employer stock is worth another $85,000. They want a $90,000 home renovation in three years and financial independence at 58. Task: students calculate household net worth, classify liquid versus committed assets and recommend a target emergency reserve. Students discover that equal net worth does not imply equal risk capacity.

Where students struggle

The common error is to jump from a risk questionnaire to an asset mix without testing cash-flow resilience. Ask students which liability or income shock would force the portfolio to be sold at the wrong time.

Reading and a quick check

Use the household-finance reading later listed in this guide. Ask students to produce a one-page household balance sheet and three assumptions that require client confirmation.

Where it leads

Client goals become measurable only when students can translate future amounts and cash flows into present planning decisions.

Central question: What contributions, returns or repayment schedules are required to fund a client's goals over time?

Time value of money is foundational in wealth management because almost every client goal is a dated cash-flow problem. Rather than teaching formulas in isolation, connect present value, future value, annuities and effective rates to retirement contributions, education funding, mortgages and lump-sum choices. Students should also see the life-cycle logic: financial capital, liabilities and human capital change as the client ages.

What this concept covers

• Present value, future value, discounting and compounding.
• Annuities, perpetuities, loan amortisation and effective annual rates.
• Goal funding and required savings rates.
• Inflation and real versus nominal targets.
• Life-cycle patterns in saving, borrowing and drawdown.

Learning outcomes

Students should be able to select the correct TVM method, calculate goal-funding requirements, distinguish real and nominal assumptions and explain how timing changes the required savings rate.

Supports Course Outcomes 2, 3 and 7.

How to teach it

Use a sequence of short client decisions rather than a formula sheet. Require students first to state the timeline and unknown variable, then calculate. Follow with a sensitivity exercise that changes only the return assumption, inflation rate or start date.

Case-style example

Elena is 34 and wants $1.2 million in today's money at age 62. She has $145,000 invested, expects 5.5% nominal annual return and assumes 2.5% inflation. Task: students calculate the nominal target at age 62, the annual contribution required if deposits are made at year-end, and the new contribution if she waits five years. A second team may argue for a lower return assumption and higher saving rate. Students discover that delaying contributions can matter more than a modest change in expected return.

Where students struggle

Students often mix real and nominal rates or use the right formula on the wrong timeline. Make the timeline a marked part of the answer.

Reading and a quick check

Use the TVM chapter in the core textbook. A five-minute check asks students to identify PV, FV, PMT, NPER and RATE before calculating.

Where a simulation fits

The Time Value of Money Simulation fits directly after this concept. Students select the relevant TVM method and calculate numerical answers under time pressure, making it useful for checking method selection before the course moves into risk and portfolio construction.

Where it leads

Goal values and cash flows establish the required destination. The next step is deciding how much uncertainty the client can and should bear to reach it.

Central question: How should a lecturer teach students to turn ambiguous attitudes to risk into an investable mandate?

Risk profiling is where many student plans become superficial. A questionnaire may indicate willingness to accept volatility, but the client's capacity to bear loss comes from cash-flow resilience, liabilities, goal flexibility, time horizon and human capital. The investment policy statement, or IPS, is the bridge between discovery and portfolio construction because it converts goals and constraints into a mandate that can later be monitored.

What this concept covers

• Risk tolerance, risk capacity, required return and loss aversion.
• Time horizon, liquidity and spending constraints.
• Return objectives and acceptable drawdown language.
• Strategic ranges, rebalancing rules and prohibited assets.
• Governance, review triggers and client sign-off.

Learning outcomes

Students should be able to distinguish willingness from ability to take risk, identify contradictions in a client profile, write an IPS with measurable objectives and constraints, and defend why a mandate is suitable.

Supports Course Outcomes 2, 4 and 10.

How to teach it

Give two teams the same risk questionnaire but different household facts. Ask them to produce an IPS and then exchange drafts for challenge. Require every adjective such as "moderate" or "long term" to be translated into a measurable range, date or decision rule.

Case-style example

Tomas, 55, says he is "aggressive" and wants 9% annual returns. His $1.6 million portfolio must fund a $110,000 house purchase in 18 months and $72,000 of annual retirement spending from age 60. His secure pension will cover $32,000 a year. Task: students estimate the portfolio's near-term liquidity requirement, separate risk tolerance from capacity and write three IPS constraints. One group may retain a high equity allocation for long-term assets while another reduces total risk because of the spending bridge. Students discover that risk capacity can contradict stated appetite.

Where students struggle

Students frequently convert a questionnaire score directly into an equity percentage. Push them to show the chain from client facts to objective, constraint, asset allocation and monitoring rule.

Reading and a quick check

Use the CFA Institute Wealth Planning reading. Ask students to identify one fact that changes willingness, one that changes capacity and one that changes required return.

Where it leads

The IPS defines the mandate. Students can now build the strategic asset allocation that is intended to satisfy it.

Central question: How should students construct a portfolio that uses diversification and risk budgeting to serve a client mandate rather than simply maximise an optimisation output?

Strategic asset allocation is the investment core of Wealth Management. Students need CAPM, expected return, volatility, covariance and correlation, but the lecturer should keep the client mandate visible. The strongest teaching links quantitative portfolio theory to practical constraints: concentration, liquidity, borrowing, time horizon, behavioural tolerance and the fact that expected-return inputs are uncertain.

What this concept covers

• Strategic versus tactical asset allocation.
• Expected return, volatility, covariance and correlation.
• Diversification and mean-variance intuition.
• CAPM, beta and the role of systematic risk.
• Sharpe Ratio and risk-adjusted performance.
• Constraints, cash holdings, concentration limits and rebalancing bands.

Learning outcomes

Students should be able to calculate portfolio risk and return, explain diversification, interpret beta and Sharpe Ratio, construct a strategic allocation subject to client constraints and challenge an optimiser when inputs or recommendations are unrealistic.

Supports Course Outcomes 4, 5 and 10.

How to teach it

Build from a two-asset covariance example to a multi-asset portfolio. Then make the students choose: one team may optimise for risk-adjusted return, while another must minimise the probability of missing a spending goal. Require a written explanation of why the same capital-market assumptions can produce different allocations for different clients.

Case-style example

Harrow Family Office is designing a $4 million liquid portfolio for a client who needs $120,000 annual withdrawals and can tolerate a 15% one-year loss. Students are given expected returns and volatilities for global equities (7.0%, 18%), bonds (4.0%, 7%), real assets (6.0%, 13%) and cash (3.0%, 1%), plus a correlation matrix. Task: teams calculate portfolio return and volatility for two allocations, compare Sharpe Ratios and recommend one. Students discover that the highest expected return may violate the client drawdown constraint.

Where students struggle

The difficult step is not the formula; it is recognising that optimisers are highly sensitive to expected returns and that diversification does not guarantee against loss. Mark the interpretation, not only the arithmetic.

Reading and a quick check

Use the CFA Institute Investment Planning and Asset Allocation with Real-World Constraints readings. Ask students to explain why adding a lower-return asset can improve the portfolio.

Where a simulation fits

The Portfolio Management Simulation is the strongest fit in the course. It should follow CAPM, Sharpe Ratio and mean-variance teaching. Teams construct and rebalance portfolios using company data, expected returns, beta, covariance, volatility and weights, then experience the difference between a Hedge Fund objective and a Pension Fund objective.

Where it leads

Once the strategic allocation is set, students need to decide how each sleeve should be implemented and how to judge the securities or funds inside it.

Central question: How should students move from an asset-class target to specific securities, funds and implementation vehicles without confusing a good company with a good investment?

Wealth managers may use active securities, passive funds, managed portfolios or combinations of all three. This concept teaches implementation as a set of trade-offs among valuation, fundamentals, diversification, fees, tax, liquidity, tracking error and client complexity. Financial statement analysis belongs here because security selection should be linked to evidence rather than stories.

What this concept covers

• Equity and fixed-income implementation choices.
• Financial statements, profitability, liquidity, solvency and cash-flow quality.
• Basic valuation and relative-value evidence.
• Active versus passive implementation.
• Fund fees, turnover, liquidity, tracking error and manager selection.
• Concentrated positions and transition plans.

Learning outcomes

Students should be able to analyse issuer fundamentals, distinguish business quality from valuation, compare active and passive vehicles, calculate fee drag and recommend implementation choices consistent with the IPS.

Supports Course Outcomes 5, 6 and 10.

How to teach it

Give students a strategic equity allocation and three ways to implement it: a low-cost index fund, an active fund and a concentrated basket of individual shares. Ask them to use financial statements and fee data to defend a choice, then introduce a client with a legacy concentrated position to force a transition decision.

Case-style example

Northstar Wealth must invest a client's $600,000 global-equity sleeve. Option A is an index fund costing 0.12%; Option B is an active fund costing 0.95% with 2.5% annual tracking error; Option C includes four individual companies. One candidate, Juno Foods, reports $820 million revenue, 12% operating margin, current ratio 0.9 and debt/EBITDA of 3.8x. Task: students compare ten-year fee drag at a 6% gross return and flag the fundamental risks in Juno. Students discover that implementation quality depends on both portfolio fit and security evidence.

Where students struggle

Students may treat historical performance as a sufficient reason to choose a fund or a strong company as automatically cheap. Require them to state the decision criterion before seeing performance rankings.

Reading and a quick check

Use the investment-selection chapters in the core textbook. Ask students to identify one balance-sheet, one income-statement and one cash-flow item that would change their view of a stock.

Where a simulation fits

The Financial Statement Analysis Simulation fits before or inside this concept. Students act as a Financial Analyst, review income statement, balance sheet and cash-flow information across five reporting periods, calculate or interpret ratios and revise a share-price prediction as new events change the evidence.

Where it leads

Security selection determines gross exposure; implementation after tax and costs determines what the client actually keeps.

Central question: How should students recognise that the same pre-tax portfolio can produce different client outcomes depending on account structure, turnover and the timing of gains?

Tax rules differ sharply across countries, so this concept should teach principles rather than one jurisdiction's thresholds. The durable ideas are marginal tax rates, tax deferral, income versus gains, loss realisation, account wrappers, asset location and the value of after-tax rather than headline return. Lecturers can then substitute local rules and cases.

What this concept covers

• Pre-tax versus after-tax return.
• Taxable and tax-advantaged accounts in generic form.
• Income, capital gains and turnover.
• Tax-loss harvesting and realisation decisions.
• Asset location and sequencing across accounts.
• Tax consequences of concentrated positions and rebalancing.

Learning outcomes

Students should be able to compare after-tax investment outcomes, explain asset-location logic, identify tax costs created by turnover and propose a transition plan that balances diversification against tax consequences.

Supports Course Outcomes 6, 8 and 10.

How to teach it

Keep local tax law in a handout and the concept in the seminar. Give groups the same portfolio but different account types and tax rates. Ask them to recommend where to hold higher-yielding assets and how quickly to diversify a low-basis position.

Case-style example

Kite Advisory inherits a client with $900,000 in a single technology share, market price $90 and tax basis $30. The client also has $500,000 in a tax-deferred retirement account and $350,000 in a taxable diversified portfolio. Assume a 20% capital-gains tax for the exercise. Task: teams compare the immediate tax cost of selling 25%, 50% or 100%, then design a three-year diversification plan. One team may prioritise concentration risk; another may stage realisation. Students discover that tax efficiency and risk reduction can conflict.

Where students struggle

Students often maximise tax efficiency as if tax were the objective. The better framing is to maximise after-tax client utility subject to risk and goal constraints.

Reading and a quick check

Use the Wealth Planning reading and a locally appropriate tax note. Ask students to write one sentence explaining why "never realise a gain" can be poor wealth advice.

Where it leads

After accumulation and implementation, the course turns to the most demanding liability-matching problem for many clients: retirement drawdown.

Central question: How does portfolio design change when the client moves from adding capital to drawing it down?

Decumulation changes the risk problem. Returns early in retirement can matter disproportionately because withdrawals force asset sales, longevity is uncertain and inflation compounds spending needs. Students should compare sustainable-spending approaches rather than memorising a single withdrawal rule, and they should separate guaranteed income, flexible spending and portfolio-funded needs.

What this concept covers

• Retirement funding targets and replacement needs.
• Longevity and inflation risk.
• Sequence-of-returns risk.
• Fixed, percentage and guardrail withdrawal policies.
• Buckets, liability-aware allocations and guaranteed-income sources.
• Bequest motives and spending flexibility.

Learning outcomes

Students should be able to model retirement cash flows, explain sequence risk, compare withdrawal policies, integrate guaranteed income and recommend a decumulation strategy with explicit adjustment rules.

Supports Course Outcomes 3, 7 and 10.

How to teach it

Use the same average return in two different sequences. Let students calculate ending wealth after withdrawals, then ask why mean return did not determine the result. Follow with a client debate: maintain spending, reduce risk, hold more cash or accept variable withdrawals.

Case-style example

Rina retires at 65 with $1.4 million and a $24,000 annual pension. She needs $78,000 after tax from all sources and plans to increase spending by 2.5% each year. Portfolio Scenario A returns -18%, -8%, +12%, +10%, +8% in the first five years; Scenario B has the same returns reversed. Task: students model five years of withdrawals and compare ending values, then propose a cash reserve or guardrail. Students discover that return order can matter materially even when average returns are identical.

Where students struggle

Students often carry accumulation logic into retirement and focus on average expected return. Make liquidity and spending rules part of the asset allocation, not a separate appendix.

Reading and a quick check

Use the retirement chapters in the core textbook plus a current local pension or retirement-system note. Ask students to explain sequence risk to a client without using the phrase "sequence of returns."

Where a simulation fits

The Time Value of Money Simulation can be reused selectively as a calculation refresher before retirement modelling, especially in undergraduate cohorts. The richer retirement judgement should remain in a case or spreadsheet workshop because the simulation focuses on TVM method selection rather than decumulation strategy.

Where it leads

Retirement planning highlights risks that markets cannot fully solve. The next concept integrates liquidity, insurance and wealth transfer.

Central question: Which risks should the client retain, insure, fund with liquidity or transfer through legal and estate structures?

A complete Wealth Management course should not leave non-investment risks outside the plan. Students need a decision framework for insurance, emergency liquidity, incapacity and wealth transfer. Because legal rules differ by jurisdiction, focus on needs analysis, ownership, beneficiary logic, liquidity at death and coordination with the investment plan, then add local law separately.

What this concept covers

• Emergency liquidity and contingency reserves.
• Life, disability, health and property-risk needs analysis at a conceptual level.
• Risk retention versus transfer.
• Estate objectives, beneficiaries, wills, trusts and powers of attorney in generic terms.
• Liquidity needs at death and illiquid assets.
• Intergenerational goals, gifting and family governance.

Learning outcomes

Students should be able to identify material non-market risks, estimate an insurance or liquidity need, explain basic estate-planning objectives and integrate wealth transfer with portfolio and retirement decisions.

Supports Course Outcomes 2, 8 and 10.

How to teach it

Give groups a client plan that looks strong on investments but has a single point of failure: uninsured earnings, an illiquid family business or no liquidity for estate costs. Ask students to identify the gap before giving them a menu of possible solutions.

Case-style example

Morrow & Co advises Samira, 49, who owns a private business valued at $3.2 million, holds $600,000 of investments and has a $700,000 mortgage. Her spouse earns $55,000, and two children depend on the household. Assume the family needs $120,000 a year for five years if Samira dies and that selling the business quickly would realise only 70% of appraisal value. Task: students estimate the liquidity shortfall and compare insurance, cash reserves and staged business-sale planning. Students discover that net worth can look high while accessible wealth is low.

Where students struggle

Students may treat insurance as a product category rather than a risk-financing choice. Ask what loss is being transferred and whether the household could self-fund it.

Reading and a quick check

Use the insurance and estate-planning chapters in the core textbook, localised for law and product rules. Ask students to identify one risk that should be retained, one insured and one managed through liquidity.

Where it leads

Even a technically complete plan can fail if the client cannot interpret, trust or stick with it. Behaviour and communication come next.

Central question: How should a wealth manager respond when a client's beliefs, emotions or framing threaten the plan?

Behavioral finance is especially important in Wealth Management because the adviser works with repeated decisions under uncertainty, not a one-off exam problem. Students should learn to diagnose bias without patronising the client, test whether a concern is rational, and communicate trade-offs in a way that supports informed choice. The goal is not to "correct" every bias, but to design advice and processes that are robust to human behaviour.

What this concept covers

• Loss aversion, overconfidence, anchoring, recency and confirmation bias.
• Mental accounting and goals-based framing.
• Attention, salience and market-news effects.
• Choice architecture and default decisions.
• Communicating uncertainty, downside and trade-offs.
• Adviser trust, belief formation and the limits of persuasion.

Learning outcomes

Students should be able to identify likely biases, distinguish emotional reactions from changed fundamentals, design a communication response and recommend process safeguards such as rebalancing rules, cooling-off periods or pre-committed decision criteria.

Supports Course Outcomes 9 and 10.

How to teach it

Use a live market-drop email exercise. Half the class receives a client message demanding that all equities be sold; the other half receives a message demanding that cash be invested after a sharp rally. Require a response that acknowledges emotion, checks the facts, connects back to the IPS and proposes a next action.

Case-style example

A 62-year-old client, Daniel, holds a 55/35/10 equity/bond/cash allocation. After equities fall 16% in six weeks, his portfolio is down 9% and the allocation has drifted to 49/39/12. He wants to sell all shares because "the market will keep falling." Task: students write a 180-word client response and decide whether to rebalance, pause or change the IPS. One defensible view is to rebalance if capacity is unchanged; another is to revisit the mandate if new retirement facts have emerged. Students discover that communication must separate changed circumstances from changed feelings.

Where students struggle

Students often label a client irrational too quickly. Require them first to ask whether the facts, constraints or goals changed.

Reading and a quick check

Use Schoar and Sun's recent work on financial advice and investor beliefs. Ask students to rewrite a technically correct but unhelpful adviser response into plain language.

Where it leads

The next concept turns the IPS into an ongoing governance process through performance measurement and rebalancing.

Central question: When should a wealth manager change a portfolio, and how can performance be evaluated without rewarding unnecessary activity?

Monitoring should be taught as governance, not constant trading. Students need to separate market movement from thesis change, evaluate portfolio and benchmark performance, inspect risk-adjusted outcomes and decide whether drift, cash flows or client changes justify rebalancing. A good review process asks what changed, why it matters and which action follows.

What this concept covers

• Portfolio and benchmark returns.
• Risk-adjusted performance and Sharpe Ratio.
• Attribution intuition and active versus policy effects.
• Drift, threshold and calendar rebalancing.
• Transaction costs, taxes and client cash flows.
• Review triggers: life event, goal change, market move, security thesis or ESG preference.

Learning outcomes

Students should be able to evaluate performance against an appropriate benchmark, distinguish outcome from decision quality, calculate allocation drift, recommend a rebalancing action and document why a change is or is not required.

Supports Course Outcomes 5, 6 and 10.

How to teach it

Give groups a quarterly review pack with portfolio returns, benchmark returns, drift and client cash flows. Prohibit trading until they write a one-sentence reason for each proposed change. The class should compare "do nothing" with active intervention as equally legitimate decisions when supported by evidence.

Case-style example

Oakline Wealth manages a $2.5 million portfolio with a 60% equity, 30% bond and 10% cash policy and +/-5 percentage-point bands. After a strong equity quarter, weights are 67/25/8. The portfolio returned 8.2% versus a 7.6% policy benchmark, but its Sharpe Ratio fell from 0.78 to 0.62. The client will withdraw $100,000 next month. Task: students calculate drift, incorporate the withdrawal and recommend trades or no trades. Students discover that superior absolute return does not automatically justify increased risk.

Where students struggle

Students may equate activity with professionalism. Require them to state the trigger and expected improvement before any trade is accepted.

Reading and a quick check

Use the CFA Institute Asset Allocation with Real-World Constraints reading. Ask students to define a rebalancing rule that could be audited six months later.

Where a simulation fits

The Portfolio Management Simulation is ideal here as the main applied exercise. Teams monitor changing conditions, buy and sell holdings, manage cash and rebalance under role-specific objectives. The debrief can focus on whether teams followed a coherent policy or simply chased the leaderboard.

Where it leads

The final concept adds responsible-investment preferences, alternatives and the integrated client recommendation.

Central question: How should students integrate ESG preferences and less-liquid investments without allowing labels to replace evidence or suitability?

The closing concept brings the course together. ESG preferences can affect objectives, exclusions, stewardship and security selection, while alternatives can change liquidity, fee, diversification and reporting characteristics. Neither should be treated as a bolt-on. Students must connect preferences and investment characteristics to the IPS, due diligence, portfolio constraints and client communication.

What this concept covers

• Values-based preferences versus financially material ESG information.
• Exclusions, best-in-class approaches, stewardship and impact claims.
• Greenwashing and evidence quality.
• Alternatives: private markets, real assets, hedge-fund-like strategies and structured exposures at a conceptual level.
• Illiquidity, fees, valuation frequency and access constraints.
• Integrated advice and client recommendation defence.

Learning outcomes

Students should be able to translate client ESG preferences into implementable constraints, evaluate evidence quality, identify alternative-investment liquidity and fee risks, and defend an integrated wealth recommendation that remains coherent with the IPS.

Supports Course Outcomes 5, 8, 9 and 10.

How to teach it

Use a client who wants "sustainable investing" but cannot define the term. Make students ask clarifying questions, write a measurable preference and evaluate two funds with different exclusion, engagement and carbon characteristics. Then add an illiquid alternative allocation and ask what it does to the liquidity budget.

Case-style example

Verity Wealth advises a $3 million client who wants at least 70% of growth assets aligned with climate-transition goals and no thermal-coal producers. Fund A has a 0.20% fee, broad exclusions and 5% tracking error to the benchmark; Fund B has a 0.65% fee, active engagement, a 35% lower reported portfolio carbon intensity and 2% tracking error. The client is also considering a $300,000 private-market fund with a ten-year life. Task: students define the ESG constraint, compare evidence and recalculate liquid-asset coverage after the private allocation. Students discover that values, financial materiality and liquidity must be handled as separate but connected decisions.

Where students struggle

Students may assume an ESG label proves quality or that an alternative automatically diversifies. Make them identify the measurement, benchmark, fee, liquidity and evidence before accepting the claim.

Reading and a quick check

Use Amel-Zadeh and Serafeim's investor survey and a current responsible-investment policy or fund document. Ask students to write three due-diligence questions that would expose greenwashing.

Where a simulation fits

The ESG Simulation fits as an integrative stakeholder exercise after students have discussed materiality, client preferences and governance. Teams take Management, Investor, Regulator or Union roles and negotiate operational and ESG choices, making it useful for showing why ESG information involves trade-offs rather than a single score.

Where it leads

The course can now close with an integrated client wealth plan, portfolio recommendation and defence that links goals, risk, implementation, retirement, protection, behaviour, ESG and monitoring.

10-week course structure

A 10-week version should compress adjacent planning stages without removing the client lifecycle. Combine professional context with discovery, combine tax-aware implementation with security selection, and integrate insurance and estate planning into retirement. Keep asset allocation, IPS design, behaviour and monitoring distinct because they require different forms of judgement.

14-week course structure

A 14-week course creates room for deeper client communication, separate tax and estate work, more simulation debriefing and a final advice defence. Use the extra sessions to raise cognitive demand rather than add disconnected product coverage.

The Portfolio Management Simulation places students in team-based portfolio-manager roles after they have learned CAPM, Sharpe Ratio and mean-variance optimisation. Teams work with a universe of 25 global companies and use expected return, beta, covariance, volatility and portfolio weights to construct and rebalance an investment portfolio. Odd-numbered teams operate as Hedge Funds seeking Alpha, while even-numbered teams operate as Pension Funds with a Sharpe Ratio objective. That role difference is particularly useful in Wealth Management because it demonstrates that a portfolio cannot be evaluated independently of its mandate.

Why it fits here

By Session 11, students should already be able to:

• Interpret expected return, beta, covariance and volatility.
• Explain diversification and risk-adjusted performance.
• Translate an IPS into asset and security constraints.
• Distinguish client objectives from raw return maximisation.
• Explain why rebalancing requires a decision rule rather than a market forecast.

The simulation then forces them to decide what to buy, sell or hold, how much cash to retain and how to respond as performance and conditions change.

What students do

• Work in teams, typically 3-5 students, as Portfolio Managers.
• Operate under either a Hedge Fund Alpha objective or a Pension Fund Sharpe Ratio objective.
• Review data for 25 global companies and an Excel model containing portfolio inputs.
• Construct an initial portfolio using expected return, beta, covariance, volatility and weights.
• Buy and sell holdings, manage cash and use permitted borrowing where relevant to the role.
• Monitor outcomes and rebalance as the simulation progresses.
• Compare final portfolio choices and performance across teams in the debrief.

The lecturer should frame the debrief around policy discipline. A team that produces a strong outcome by violating its own stated risk logic should not automatically be treated as making the best decision.

Recommended course placement

• Main placement: Session 11 after portfolio theory, IPS design and implementation.
• Alternative: split across Sessions 5 and 11, with initial construction early and a later rebalancing/debrief stage.
• Assessment-supported use: follow with an individual portfolio-review memo or short oral defence.
• Postgraduate extension: require teams to explain where model inputs were most fragile and what client information was absent.

Knowledge students should have before the simulation

• Basic CAPM and beta.
• Sharpe Ratio and risk-adjusted performance.
• Mean-variance optimisation intuition.
• Expected return, volatility, covariance and portfolio weights.
• Client objectives, constraints and the role of an IPS.

Delivery format

Suggested debrief questions

• Did your team optimise for the mandate you were given or for the leaderboard?
• Which input had the greatest effect on portfolio weights?
• Where did diversification genuinely reduce risk, and where did concentration remain?
• Which trade was the best decision even if it did not produce the best outcome?
• When did you rebalance, and what rule justified the action?
• How would the same portfolio change for a client with a near-term withdrawal?
• What information about taxes, liabilities or behaviour was missing from the simulation but essential to real wealth advice?

The Financial Statement Analysis Simulation is a 2-3 hour single-player exercise in which students take the role of a Financial Analyst. They review ChippyCo's income statement, balance sheet and cash-flow information across five reporting periods, use profitability, liquidity, efficiency and solvency ratios, and revise a share-price prediction as new events change the evidence. For Wealth Management, this is best framed as a security-selection discipline: the purpose is not to turn the course into accounting, but to show how an investment view should respond when fundamentals change.

Why it fits here

By Session 6, students should be able to:

• Explain where individual security selection sits inside the wider asset allocation.
• Interpret basic income-statement, balance-sheet and cash-flow relationships.
• Distinguish profitability from liquidity and solvency.
• Recognise that a strong company can still be an unattractive investment at the wrong price or risk level.
• Translate evidence into a client-facing buy, hold, reduce or avoid recommendation.

What students do

• Work individually as a Financial Analyst.
• Review the Income Statement, Balance Sheet and Cash Flow Statement for ChippyCo.
• Calculate or interpret profitability, liquidity, efficiency and solvency ratios.
• Form an initial share-price prediction from the available evidence.
• Receive updated data and business events across five reporting periods.
• Revise the prediction and reasoning as the financial picture changes.
• Compare scores, rankings and final reasoning during a lecturer-led debrief.

A useful Wealth Management extension is to ask whether a change in the analyst's company view should automatically trigger a client trade. Students must reconnect the security evidence to diversification, taxes, costs and the IPS.

Recommended course placement

• Session 6 after introductory accounting and valuation refreshers.
• Before an active versus passive implementation debate.
• As individual formative evidence before the group wealth-plan assessment.
• In a longer course, pair the debrief with a concentrated-stock transition case.

Knowledge students should have before the simulation

• Basic financial statement structure.
• Introductory ratio analysis.
• Basic share-price and investment-return intuition.
• The role of security selection within an asset allocation.

Delivery format

Suggested debrief questions

• Which financial statement changed your view first, and why?
• Which ratio looked strong but was misleading when read alone?
• What new event caused the largest revision to your prediction?
• How would you distinguish a company-specific thesis change from a market-wide move?
• Would the security still belong in a diversified client portfolio if your conviction fell?
• Which evidence should appear in a client recommendation and which detail belongs in the analyst appendix?

A useful default is 55% group integrated wealth plan + 25% individual oral defence + 20% individual assumptions/evidence note, or combine the latter two into one individual assessment point if local regulations favour two submissions. Grade the recommendation and its support, not presentation polish alone.

Grading with the Portfolio Management Simulation

The simulation asks teams to construct and rebalance portfolios using expected return, beta, covariance, volatility and weights while operating under Hedge Fund or Pension Fund objectives.

Lecturers may assess:

• Whether the team identified and followed the correct mandate.
• Quality of portfolio-construction logic and diversification reasoning.
• Use of CAPM, Sharpe Ratio, covariance and volatility evidence.
• Discipline of rebalancing decisions rather than return chasing.
• Quality of the post-simulation assumptions log and reflection.
• Ability to explain why a high-return outcome may still represent a poor decision.
• Individual oral or written defence of one major trade.

Grading with the Financial Statement Analysis Simulation

Students work individually as Financial Analysts, review ChippyCo's financial statements over five reporting periods and revise a share-price prediction as new evidence appears.

Lecturers may assess:

• Correct interpretation of profitability, liquidity, efficiency and solvency evidence.
• Whether conclusions change appropriately when new information appears.
• Quality of reasoning behind the share-price prediction, not only the final score.
• Ability to distinguish company fundamentals from portfolio suitability.
• Identification of evidence gaps and risks.
• A short client-facing recommendation that translates analyst detail into decision relevance.