Best way to get into PWM?

What is the best way for me to get a FT job in private wealth management. I am graduating in 2 months and have already had an investment banking internship and just started a PWM internship. Will a financial advising training program help me for this or is that a waste? What would you do in my position?

Thanks

 

You could either take one of those securities tests (Series 65, 66, etc...) or you could network with some group heads in PWM. I did a PWM internship over the summer and most of the guys who worked there were from non-targets, so I think with a little bit of effort you should be able to break in. You just have to be a "good fit" for a particular group and have solid speaking skills (necessary for cold-calling). Of course, this is in addition to having some knowledge about finance if you're not a finance/econ major so brush up on that.

 

ML, MSSB, and Wells Fargo all have training programs for people just graduating college. Also if you make a good impression for the PWM team you are working for now, they will prolly hire you. SirTradesAlot is right it is very hard to make it as a 22 year old but I did. It just comes down to can cold call and not be afraid of talking to HNW individuals. I think it is a great business, it is truly eat what you kill.

 

What about independent FA practices? They often have existing book of clients and would rather train you to take on and support existing clients than have you do cold-calling.

Are these viable options? Or must PWM-hopefuls opt for training programs by the major players?

 

Being a young guy in PWM sucks. You're the one who's cold calling all day and I mean all day. Unless your cold-calling conversion rate is outstanding, you obviously won't be making IBD analyst money. But it can be a very stable career if you stick with it. Especially at the BB PWM divisions, the senior FA's have great exit ops to other firms provided their clients stay with them.

 

"Client service associate" is usually PWM parlance for operations. I'd avoid.

Honestly, it shouldn't be hard to break in. PWM is always looking for new salespeople. If you're at a legit firm, they'll show you the ropes and have some kind of training process; don't expect handholding but you'd definitely be able to learn the business going in straight as an advisor.

Most kids fail at being an advisor because they lack the sales skills, the work ethic, or both. Some firms apply the churn and burn process to new hires. It is a rough business to get started in, since you're not making much money at all your first few years as you build up your book, so another thing to keep in mind is a lot of people just quit and look for other opportunities since they can't handle not getting paid much at first.

You may want to check out the forum on wealthmanagement.com also as another resource.

 

My background: I interned at BB PWM my freshman year of college. We had a 4 member team. Junior FA, CSA, Broker, and the group head who was the Senior FA.

From what I saw, the CSA job was shit. All she did was take phone calls regarding transactions, do some wire transfers, and look over client account history.

The Junior FA was on the phone cold calling a lot of the time, but he had technical knowledge. I think starting out as an FA is a safer path towards making it in PWM because you can build up a client base and learn technicals as well.

I think being a broker would be a very interesting position because you have to have the financial knowledge of the products and you need to be able to communicate it with clients. Although the down side is that you can't start out as a broker right out of college unless you passed the Series 65 or whatever.

PWM is hard the first few years because you are literally always on the phone trying to schmooze random people into meeting with you. The type of people who I saw were good in the PWM business were the thick skinned guys from non-targets who probably got hazed by their frat in college. The principles are the same. You're going to get shit on when you call people. It's a fact of PWM.

Think long and hard about whether you want to go into PWM because from the people I've talked to in the business they say it's not the easiest thing to jump out of to other front-office divisions if you're not interested in it.

 

Thanks for the comments so far everyone.

Kingtut, I'm in the US. I went to a non target for UG (although rising on the Bloomberg Top 100 Business schools list if that means anything) and they had an accelerated MBA program. I had some credits from HS and they basically just crammed grad classes into my senior year and then I had a full year of only grad classes after that.

Interesting points made about the specifics of the positions. One of the reasons I'm looking to move away from IBD is that I hated sitting at a computer all day barely talking to anyone. I have a few buddies working in IBD in Manhattan and they all seem to regret it. Big money is a nice draw, but a miserable life in order to have it doesn't seem worth it to me.

JulianRobertson, sales skills were a big reason for why I was looking into PWM. For a number of years during college I worked in car sales. This greatly enhanced my sales skills and showed me that I genuinely enjoyed getting to know people and their needs, and finding a solution for them. I fully understand that $$ in the short term will not be much at all. I'm looking more towards the end game $$ possibilities and being happy with a good work/life balance

Blackjack21, you said basically exactly what I was told by the family friend I spoke with. He said the job was basically a glorified secretary position and that the pay would be shit. I guess what concerns me about going straight to an FA position is that I feel I lack the technical knowledge needed. I geared most of my studies in college towards IB and M&A, and at my IBD internship I focused on PE deals and other M&A transactions.

My family friends logic was that I can go into the group as a CSA and learn the clients and who they are, and then move into an FA position after 1-2 years. I would need to pass the Series 7 and 66 for the CSA position within the first few months as well.

Its definitely possible given that he started as a CSA and is now making seven figures at the same firm (after 10 years of grinding of course) but given the comments thus far, I'm thinking I should definitely give more thought to starting out as a FA

 

Additionally, what if I continued on the IBD path for a few years with the intention to move over to PWM once I gain some experience and make some contacts? This would be done with the intention of having a slightly (miniscule) less difficult time building a book in PWM. I know that not many of the skills are transferable, just trying to examine all of my options being so new to the workforce

 

I believe that a top PWM shop like ML will have you take an aptitude test. You must have a sales-centric personality to pass this, otherwise, no dice. They are not looking for nice guys, they want go-getters. You will have access to high quality research and other resources in the BAML network, but will have competition every step of the way. They start you off with a salary, but it will taper off over the course of 12-18 months or whatever it is. The training will tally about 3 years total. Whatever you choose, all the best.

All the world's indeed a stage, And we are merely players, Performers and portrayers, Each another's audience, Outside the gilded cage - Limelight (1981)
 

I've been in PWM for 5 years.

CSA is not an ops position in a PWM branch, it is more of a middle office role as you're basically a sales assistant. They have a separate group in the branch which are the ops guys and you are a middle man between them and the FA's.

If you want to do PWM right out of college being a CSA is a pretty good way to start. But it all depends. You can join a strong producing team and be the assistant (or one of the assistants) for a few years. You will get licensed, learn the business, interact with clients etc. Doing this you are truly part of the team and can really get some good experience. You most likely get a percentage of their book as well (I've seen ranges from 1-5%) on top of a base salary. If you are motivated and show you are competent enough you could join the FA training program as part of the team. Your split would increase and they would likely give you some lower tier clients but you will still be expected to cold call, grow the split book along with your own and generate revenue.

You could also wind up being a CSA that works with a few lower producing single FA's. If this is the case, run away. You won't get paid out, you won't learn much and if you do want to become an FA you won't have anyone backing you. You'll be suck being a glorified secretary with really no room to grow.

So it really depends how what type of opportunity you get. There is a real chance for upside if you get in with a solid group but that us not guaranteed. These positions are much harder to come by as a CSA will rarely leave he is doing well with a team.

 

PWM sounds like a fancy new version of stock brokerage used to differentiate it from discount brokers in the internet age. How different is it from Dogbert style consulting?

Dogbert the Consultant:

"It's very easy to have too many goals and be overwhelmed by them... The trick is to find the one thing you can focus on that represents every other single thing you want in life." -- @"Edmundo Braverman"
 

Bobb, thanks for the advice. Both teams that I spoke with are small, but are both comprised of some of the top producers in the nation. In your experience, have you seen people become more successful through the CSA route or going straight into the FA training program? I was presented with the opportunity to go either route with one group

 
VersacePython:

Bobb, thanks for the advice. Both teams that I spoke with are small, but are both comprised of some of the top producers in the nation. In your experience, have you seen people become more successful through the CSA route or going straight into the FA training program? I was presented with the opportunity to go either route with one group

Right out of college, the CSA route for sure. You may decide you don't want the FA route and can move to another type of position within the firm. If you go FA route and you don't produce you are gone. It is really hard to convince people to give a 22 yr old their money.

Do you know how much revenue the teams do? Make sure you get some sort of agreement where once you get licensed you get a percentage of the book. Base salary won't be great

 

I've worked in the industry as an FA for 10 years and can confirm that Bobb's information is more or less accurate. I think the important thing to consider here is that neither route guarantees success and each approach has it's distinct set of pitfalls and obstacles to overcome.

Yes, it is very difficult for a 22 year old kid to convince 50 year old+ clients to trust them with their millions. The financial/technical knowledge you can easily learn; the hard part is client aquistion and you will need to be successful at this very quickly or you will be fired. In the older days (early 2000s) they structured the training programs differently. Essentially you went through training, were paid a salary for a set period of time and then converted over to being paid 100% fees and commissions. If you weren't successful in building a book during this period then you quickly starved once the salary was pulled. At this point we saw who REALLY wanted to do the job and who didn't. Those who could bring in assets and were willing to endure the first few years (which are miserable) came out on the other side as a successful FA and now make a good living.

Now you don't get that chance. You will be reviewed every month and they will look at your net new assets and gross production. If you miss the numbers once you are warned....miss it again and you are terminated. The firms want to cut their losses early if they don't see what they like. It is for this reason that 85% of new FAs fail within their first 3 years.

The CSA approach sounds easier, safer but it also has it's own pitfalls. First off even if you are capable of getting put onto a successful team as an CSA (and of course every assistant wants this, even the ones that have been in the business 20 years and already know everything) how do you know that they will at some point be willing to convert you to a producing FA and share their book of business. What is in it for them? If they need help servicing their lower tier clients why wouldn't they bring in an existing junior FA (3 to 5 years) who has actually already proven themselves within the business and can immediately add value? Also by converting you to an FA they create a void within their client service team which now needs to be filled and now beside training you for a new role, they need to train another CSA. Most successful teams I know are incrediblly busy, they have zero incentive to create more non revenue producing work.

I'm not saying that I have never seen it happen but it certainly isn't typical. Also in a lot of cases the new team member simply gets all the shit work that the FAs doesn't want to deal with. If you do this then absolutely make sure that you have a discussion on the front end that outlines your immediate role along with the expectations and timeline for you to move forward to becoming an FA. From there make sure you outline your role on the team as an FA, which assets you will service, how this will increase over time and how you will be compensated. Otherwise you might find that after 5 years of hard work you are left servicing a group of accounts that barely generates enough revenue for you to survive

 

I Just saw this thread and since I work in PWM, I thought I could add some input. PWM firms also offer analyst positions. At firms like GS, JP Morgan PWM, and ML PBIG group you could start as a private banking analyst for a few years and then work your way up to becoming a financial advisor. At least as an analyst you will have some transferable skills. Salary and bonus is also better than a CSA position.

Also the idea of working in investment banking for a few years and then transitioning over is a great idea. You will get experience that most advisors do not have and it is a great selling point to potential clients.

 

TJS, the compensation for a private banking analyst is leaps and bounds better than a CSA position! Haha, great suggestion.

I've done some research into the position and what it would entail and it seems like you are right in that the skills I have already learned are more transferable to the analyst position.

If you have an idea, how do the hours compare to say an IBD analyst position? Similar? Or is it more along the lines of the more manageable wealth management hours?

 

Approx what %/basis points do the FA's/Wealth Managers get of the AUM? In my area (small midwest city), there are groups that are "branches" of the bigger advisors like subsets of BoaML, Raymond James, etc. I have been thinking about trying to get an analyst gig at ones of these doing asset allocation, performance attribution, whatever else they do and eventually move up to managing money. Having not known much about wealth management & private banking, I didn't realize these guys do a decent amount of institutional investing. Granted it is smaller charities, and endowments, but its better than managing strictly retail investors.

How useful is the CFA in getting a wealth management or private banking job? It seems like most of the people I see on linked in are CFP's, or some other different designations. I am a CFA charterholder, so I am thinking I should play up that aspect.

"Give me a fucking beer", Anonymous Genius
 

The fees charged depend on asset size. But it usually starts at 150 bps all the way down to 25bps. The CFA is gaining a lot of traction in the wealth management industry as more advisors are making the allocation decisions themselves and not farming out those decisions.

As far as advisors managing endowment, charities, retirement plans, etc all depends on the advisors. Some advisors only manage institutional money while some only do retail.

 

being in the PWM space, here's my advice to you -

a. make sure you really KNOW your clients. what i mean is not only do you know they will follow you wherever you go but they are comfortable in telling you WHERE their existing bankers are and should you make that move, they will follow you or be willing to voice up and request a change from their existing banker over to you...

b. if you REALLY are doing a great job for your existing clients, why move? as you will come to realize, almost every bank can provide the same platform of products so what would ultimately set you apart is how hard you work, how well you come up with innovative solutions that really fit what your clients are looking for, and be the one they come to for advice...

c. sometimes....sometimes, it's better to be a big fish in a pond than a small fish in the ocean...

good luck!

 

I worked for a well known MD at ML for an internship and I remember a few people calling with grad degrees and undergrad degrees asking about employment and he said he normally doesn't hire people right out of college, mainly because it's very difficult to get started and their network is rather small.

 

As far as the finance careers talked about on this board, PWM is not that hard to break into, but that doesn't mean it's a cakewalk. Depending on where you're applying it can be difficult. JPM, GS, and CS PBs are all going to look for high quality candidates, some of whom would undoubtedly be able to find jobs at BB IBs.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 

Like with any interview you have to spin a story that shows your interest in finance. Are you involved with clubs, do you read WSJ every day, etc etc. If you're truly interested in finance and have done your fair share to keep up with the finance sector you should do okay. Check out the WSO guides (on the top drop-down menu) for more info on breaking in to finance.

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 

I have begun to read wsj and will be joining the finance club starting next semester, this Is my first semester at Emory after transferring want to make sure I get As. Could someone here tell me about culture and lifestyle at Pwm groups--what kind of hours can I expect?

 

i don't like pwm because it's not quant enough.  by no means am i a math expert, major, or grad student, but I do like to do some sort of analysis.  I think in PWM (at least for the brokerage houses like ML, UBS, etc.) it's more of a sales job than anything.  you don't do your own research and you can't make recommendations or investments that are contrary to what your bank's research division tells you to.  Meaning for example, you want to invest in stock ABC because you think it's undervalued, has great growth prospects, and could be a leader in its industry.  However, ML (or whichever firm you work for) equity researchers don't feel the same way and think that ABC is shit.  So in the computer system they downgrade it and give it a shity rating, which ultimately prevents you from suggesting that investment to your clients.  Two months down the line, ABC rallies and triples in worth...oops?  Basically you can't act on your own views, especially if they are contrarian. You are subject to the decisions made by those higher up within your firm.

I know this is true in brokerage firms and for normal wealth individuals.  I'm not sure if this kind of investing is still true at the high net worth inidividuals.  Anyways, if you really want to handle people's money either do private banking (high net worth individuals) or something like GSAM.  Just my .02

 

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