IB Vs PWM (Longrun) Comp & Lifestyle
This recent Facebook forum post raises an off topic question in my mind and I want to get you guys opinion. I know enough about IB to be dangerous but have never worked in IBD. I’m in PWM @ MS and am to the point where my revenue is starting to ramp. However I may be able to change gears soon.
The average guy in my office pulls down about 350K and the biggest pulls down about 4MM. To boot these guys have the best lifestyle out of anyone in finance I know. They come and go as the please, long vacations, extreme job security, plus every 6-8 years they either get a retention check or cross the street and get a big bonus. By my projections I’m on track to pull down 350-400 minimum by the time I’m 40-45 (+ Job security + 2, 1MM bonuses).
How does this compare (total comp & lifestyle) to the IB track??? (Realistically) And which would you choose?
boutique IB
Interview Question: Why IBD over PWM? (Originally Posted: 03/22/2007)
If an interviewer were to ask why you want IBD over PWM or AM, what would you say to them?
Obviously this may differ from person to person, but Im interested to see how people would field this question.
Id like to see some honest answers, more than "PWM is for morons" or whatever some of you might have been thinking.
because PWM is for pussies
BB PWM vs. Boutique IB (Originally Posted: 10/22/2007)
better exit opps? business school? PE? HF?
Can you give us a sense of what type of boutique (name or comparable firms) and location?
MM IBD vs. BB PWM (Originally Posted: 11/22/2012)
I am weighing three different full time options and wanted to get the WSO community's opinions.
They are all entry-level analyst positions that carry a two year commitment. Long term, I am looking to get into investment management and to also attend a top MBA program.
How would you rank the three options? Is either IBD or PWM experience more beneficial for developing a skill set that's transferable to investment analysis? Will MBA admissions be more partial to a BB firm on a résumé than to a MM firm?
Thanks in advance for your responses!
If you want to go into investment management then your best bet is probably BB PWM.
PWM vs IB (Originally Posted: 09/06/2011)
I have a choice of working at a top Wealth Management firm as a fall intern (UBS/Merrill) or a boutique investment bank no one has really ever heard of.
Which would you recommend? Both are unpaid. I want to use this fall experience to help me further develop my resume for SA positions.
PWM vs. IB (Originally Posted: 10/02/2010)
I've had 4 PWM internships, 2 of them at bulge brackets and I was wondering perhaps If I should rather go than route after college instead of IB. So tell me, what kind of people do they look for in PWM?
I have strong social and communication skills, I present myself well, dress well, and I was thinking that perhaps GPA could be overlooked a little in favor of experience, sports, and "presence".
the search function is horrible, so if you remember any good links pertaining to this subj. please post them.
Dressing well as you mention makes a big difference
PWM or Ibanking - which is more analytical? (Originally Posted: 12/08/2008)
I always thought PWM was a "cold-calling" BS type of job, but I've been talking to a few people at BBs and they say that the job can be very quantitative and analytical. One analyst was saying he does Monte Carlo simulations using Matlab, and as far as I know this is a lot more quantitative than any excel work that an Ibanking analyst might do.
IB is definitely more analytical than PWM. But as far as my knowledge goes, working for a product team or doing research on the wealth management side could be analytical as well. But generally speaking, IB is more analytical.
Yeah I had the same question about IB vs Sales/Trading.... any light on this would be great!
lmao
All the best PWM guys didn't start there. They were corporate bankers, investment bankers, Asset Managers, etc. They lateraled to PWM at a certain point in their career because yeah once you get to that level, it's really nice. You have a good lifestyle, you make good money, and the work isn't as tough of a grind.
However, to say that lots of guys in PWM are pulling in 7 figures is ridiculous. There are a handful of guys who have those types of books and can do that. Most will be making 200-500K if they're good, but because it's commission and results-driven for the bonus, you need to perform to make that. The bases are low (as in actually low, not IB guaranteed bonus low), and you could easily be stuck making 150k a year middle of your career if you have bad years.
But because I know you're thinking it just like every other idiot, building a book is hard. You have nepotism, existing client relationships, just cold hard competition, and market-driven factors. 20MM clients don't fucking grow on trees, that's for sure.
My take: take entry IB, see how you like it, and the laterals to PWM will be there no question. Because IB guys are snobs, the opposite is rarely true. Take the options early in your career.
I second IB.
Just make sure its goldman tmt and you should be fine
If you've had 4 PWM internships and you're asking this question I would say work on being more observant.
Easy MM coverage, better exits to PE and an MBA, just leverage your MBA to get into it. ECM has less analysis, PWM, is the Rodney Dangerfield of finance.
Actually not in this situation myself. It is something I am wondering. Say GS or JPM PWM because they are good. And boutique like FBR or Montgomery
The really quantitative stuff in finance in general is in wealth/money/investment management, whatever you want to call it, and trading. That said, not all jobs within those divisions are quantitative at all. Lots of PWM stuff tends to sales/relationship focused, however, depending on the organizational structure of the company, the more quant heavy stuff might fall under the umbrella name of 'PWM'.
Few people would consider IB to be quantitative.
You like the thrill of the deal, the challenge in creating long-term business-altering structures for companies and helping your boss help the client's navigate challenges that lie ahead, whether they be from a financial or directional point of view.
Just try to get them wet.
Or you could say that you hate dealing with actual people. (That was sarcasm)
^
LOL
Do you go to a target school? Semi-target? Non-target?
What type of work will you be doing at the boutique? i.e. will you get to do some modeling?
At first glance I would say to go with the boutique IB, especially if you're going to get to do some modeling.
However, the name brand on your resume does account for something.
choice 1
Would say that the GS and JPM brand name are better for bus school ops, however you're going to have much better exit ops for PE / HF at the boutique IB. You can always lateral to the BB if you know IBs what you want to do. I think PWM at this stage in your career is a poor choice.
IB is not quant, basic addition/subtraction/multiplication/division. most PWM is sales in nature.
the most quant jobs are in S&T and quant HFs
This question is meant to shock people that REALLY want IBD. The reaction is more important than the answer. i.e. If you are set on investment banking you'll obviously be surprised by the question and answer it more from the viewpoint of why do I want IBD, as opposed to why do I want IBD over PWM.
Catch my drift?
boutique IB easily if you want to do IB full time. at least youll learn valuation or something that will help you speak up in your FT interviews.
two of the PWM internships where abroad for the summer, one was for 3 weeks, and the other one is now at a branch office. None provide me with any insights on what the nyc offices looks for for full time analysts.
day in the life in PWM would be great (from analyst to MD)
Not even close. MM IBD
Friedman Billings is not really a boutique.
I've been interning in the Private Banking & Investments Group @ Merrill Lynch for the past nine months and I recently just got a summer analyst position with Goldman Sachs in the S & T division. Every interview I went to Bear Stearns, Lehman, UBS I-Banking etc, I got the "why not PWM" question - and my answer was the same...apparently it worked?
I just said that based on my experience in PWM, the limiting reagents to your success in the field are your age and your experience level and that I didn't want to go into a field in which the only way to get better at my job was to get older, and that while I thought PWM was a great place to do a first internship (acquisition of generalist knowledge) and a great place to semi-retire into (when you've established street cred, if you will) that it was a very hard place for a young person without an established network of older, wealthy friends to start their career.
Although, I definitely agree with aspiring monkey - answer the question in the framework of why ibanking and make your answer about that.
some PWM guys (i know this is the case at Goldman) actually work on the teams that decide what to invest for their clients, how to manage their risk, how to balance their portfolios, and so on.
if so, there's no reason this work would be any less quantitative than working for a PM at an asset manager, for ex, and could be pretty interesting stuff.
that i felt PWM was all about client relationships and much less about the market...my real interest is in the market and i feel s&T allows me to dig deepest into the market
hilarious wallaby
What does "PWM" mean to you? At JPM, there are different divisions that have varying prestige/exits. Since it is WM, I will assume you mean wealthy families and not institutions. So are we talking about private banking or lower net worth clients "private client services (PCS)". Then, if we are talking about private banking, are we talking about an industry group or a banking group? Etc, etc. There is no way to respnd to this with legit advice considering how vague you're being.
MM IBD
No one is going to take the IB side of this? For all the chatter about IB on this site no one seems to be defending it.
Analytical has different meanings
Generally PWM is less analytical.
you won't get to get a solid grasp of accounting or finance there. (ib is better) you won't get to do as much quant work as traders or structurings
it's basically low powered sales. you need to know what's going on with your projects but the guys who do the analysis are not the ones in PWM. they might talk to PWM so PWM knows but its not PWM even if there is a group in PWM that thinks they are the quant/analytics group
Boutique, if it's actually a real IB role like Simple Ass said (yeah, I meant to write it that way).
you're a fuckin' douchebag cocksucker.
Hahah you love me.
if you want IBD don't say that...sales & trading talk about digging into the market, but if you want banking then they will think you are a moron if you say this
I also agree with MM IBD.
don't say digging deep into the market if you are going for M&A. You will be labelled as a moron if you do.
Say M&A excites you with the thrill of the deal. It is more finance-oriented at the lower ranks and quite frankly you enjoy working very hard.
Ok IB it is. Thanks!
I had the same opportunity between PWM and IB boutqiue. IB is ALWAYS better than no IB.
You probably know the answer to what you're asking.
PWM has a much better lifestyle, earns just as much if not more as banking, but the reason why people on wso probably don't go into it as much as IB is because it isn't as flexible in terms of exit options and doesn't fulfill most people's "Master of the Universe" dreams.
IB is a sweatshop, monotonous, but kids do it because the potential upside is to go into PE and end up as CEO or CFO of a portfolio company, or become an MD and bring in deals that get into the WSJ, or go corporate and become CFO of a F500. Now, most people in IB will never become these things, but since most kids in their 20s don't know what they want to do, IB seems more attractive.
Yes, the PWM at the BB I talked to said that they have different divisions (one is sales, the other is products and services... etc)
Based on what balooga? Every career path has different vantage point entry level positions. I do think WM (non-institutional) is pretty TTT, unless you have a nice industry job... some of the most brilliant economists/macro guys I've met worked in the PB.
Can any banker comment on this ? I will graduate soon and I'm hesitating between the two as well. Just want to say that, as far as I know I don't think that PWM earns as much money as banking as waterboy said, but the lifestyle is WAY better.
I might change and say MM IBD. I think skill-set wise, PWM is going to most definitely be more transferrable to investment management. However, in terms of getting into a top business school the IBD experience will be stronger on the resume.
if you are referring to PWM on the retail side, you can def. say you feel you have intellectual ability, quantitative skills, etc. that would be better utilized in banking. It is understood that brighter minds are in banking than in PWM, however it may not be as extreme if you are talking PWM like GS, or Citi Private bank (ultra net worth)
I might have to disagree. It depends on what part of PWM you are in. If youre in the FO with pm's, analysts and so forth, then I agree youre analytics is limited to some portfolio reviews, manager/fund due diligence etc...
If you land on a deak that services PWM, you are essentially doing similar activities to those "analysts" on the institutional side. From what short experience I have, a BB WM unit has an entire operation dedicated to servicing Advisors/PM's. These roles could see you on a foreign equity desk, FI, Eq, Cap markets even. The place I know, if you land on some of these desks, you may be lucky enough to work on smaller M&A transactions (relating to clients and their businesses).
So really it all depends what part of wm/pwm you land up in.
This thread is super old, however, in a case anyone comes looking...
I've been in PWM for a decade. The hours are light after you've built a book of business. The salary is decent for my current role (front office sales management/supervision); same as my boutique IBD buddies. The bonuses aren't nearly as good, but they're okay...15-20%.
If you choose to produce, it's a 100% commission game at most places. You'll get a decent grid payout if you're on the high end of production; 30 - 40% if you're a million dollar producer. It's basically you against the world. You source your clients. You woo them. You service them. You are the master of your own universe.
Just keep in mind that the competition is fierce.
There are million and one people who think they're wealth managers. Gutter bank-affiliated "wealth advisors", well established bank-affiliated wealth advisors, wirehouse guys, family office guys, snooty regional boutique CAIA cert guys, GS PMW "I only take $10MM and up" guys, ML/BOA "pitch your family and friends, you do have rich family and friends, right?" guys, "smartest guys in the room" MS PMW guys, lawyers, accountants, computer programs, fee only guys, transactional commodities guys; they all claim to be better than you. Your job is to be the voice of reason to your clients when Jim Cramer is yelling at them from the television and their CPA/CFP is trying to convince them to consolidate their accounts with his affiliated RIA.
Best of luck.
The money is very comparable between PWM and banking, especially after taking into account the lifestyle. Also note, PWM is an older man's game. One should not realistically expect to become a private wealth adviser immediately after college let alone, become self-sustaining. Assuming you will be graduating soon and you have viable IB opportunities, it would make sense to go into investment banking for several reasons. First, being a PWM analyst does not guarantee you becoming a PWA in the future, in fact, it may be a deterrent. Second, if you pursuit investment banking PWM is a potential exit opportunity. Third, investment banking should allow you to develop a valuable network that could be fruitful in the event PWM is a career path you are interested in. That is just my two cents.
Depends on the bank and group. There is a big difference between some of the banks you mentioned and this could be even more apparent at the group-level. In other words, go for IBD unless that bank/group is only co-managing deals.
Yeah, I heard JPM Private Banking is awesome but Private Client Services sucks
Trust me it is extreme across the board including GS PWM or Citi Private Bank. Unless you are some ridiculous PWM guy which has the who's who of the Forbes 400, you probably won't be doing as well in terms of pay as those brighter minds in IBD.
boutique IB hands down!
If you want to be guaranteed an analytical job, IBD wins out.
I did a summer analyst program in PWM and I can tell you that I did not do a whole lot of analytical work. I was very unsatisfied with my experience. I should point out that I worked in a regional office; this means that I did not get exposure to the strategy teams in NY. My understanding that the strategy jobs in NY can be very analytical.
If it comes down to a good ECM group deal-wise versus a weaker coverage group, where do you think I would get more valuable experience from?
the GS PWM and Citi Private Bank is another league from the retail side, in my opinion. FYI, GS has 47% of the forbes 400, or so they claim. If you don't have at least $20 million investable, you can't even talk to GS.
There are rediculous PWM guys on the retail side too though - top FAs, i mean TOP, can make just as much if not more than anyone in IBD
depends on what you want to do.
Ok, thanks for the insight. The problem with banking is that I don't really want to do deals, i'm interested in investing in compagnies. Looking at the fundamental, speak with the management team, make my own idea and then decide to go short or long this company. I thought an analytic role in PWM will be a better fit for me. What do you think ?
Go with MM IBD, especially considering it would be PWM at JPM as opposed to Private Banking, so you would be limited to clients with less than $5mm (GS nixed their 2 year contracts, so safe to say its not with them if you have a 2 year commitment).
i think by extreme sumanlst meant the extremity in difference of intelligence between the PWM guys and the IB guys. Understandably its going to be difficult to get a FT IB position coming from PWM, but I'm gonna work at it.
Hopefully acing my GMAT and networking my ass off will be enough.
I have no one to blame but myself, didnt get IB apps in soon enough, not to say that that would have guaranteed me a position by any means. I wish I were still a sophomore.....then I'd be ahead of things.
None of my offers require a two year contract. The interviewers pretty much all said that analysts usually stay for at least two years; and unless the firm that I'm with is going belly up, I don't plan to lateral during my stint.
It looks like MM IBD is the hands down preferred choice. Are there any redeeming qualities to doing BB PWM? What about for MBA admissions? I guess I'm a little surprised that no one is advocating for PWM.
dude, you can make it happen. When you get in interviews, be able to communicate how your time in PWM made it clear that you wanted to be in IBD, and why.....such as you will be doing much more analytical work at the junior level, etc.
Know how the time in PWM prepared you for IBD and tell why - if you can explain exactly why and it is sincere and well thought out, you are in good shape
Depends what you're looking for in terms of experience. ECM is usually pretty busy from what I've seen. You'll see a lot of deals and potentially be involved with multiple deals launching each week. However, you will obviously only have exposure to one product so your experience will be much more specialized.
The problem with a weak coverage group, as I mentioned, is that you will not learn much if they only co-manage deals. Keep in mind that ECM correlates with the strength of the coverage groups. If the coverage groups are not bookrunning deals then ECM will not be leading the charge either.
Equity markets could also slow down for a bit in terms of # of deals. We saw a good amount of follow-on's pre-election as companies were looking to load up on cash with high valuations, but now investor appetite seems be down. Will be interesting to see what happens over the next couple of months.
If you are interested in investing and company analysis banking is not for you. You will have little to no exposure to the markets and investing in general. On the flip side, you will develop a broad skill set that is applicable to investing in companies--valuation, financial statement analysis etc.
However, PWM is also not a good fit for you if your interests lie in "looking at the fundamental, speak with the management team, make my own idea and then decide to go short or long this company." I may be generalizing a little here, but for the most part the larger PWM shops are moving away from the model of private wealth advisers acting as their own individual investment management shops but rather centralizing investment analysis and strategy. Thus, in PWM you will have little exposure "really" analyzing companies and speaking with management (you will have none). Bottom line, PWM is a sales job. It's really a great job, you can make lots of money but you aren't getting paid for your investment prowess. Hope this helps.
In either position, it takes a high level of intelligence to succeed. When I interned at a PWM in Florida, I saw this one team of advisors around the ages of 30 who worked around the clock, had their CFPs, and could sell bubblegum to lockjaw inmates. They were successful because they were smart as hell and hardworking, and that is the difference between how far you go rather than where you start.
PWM is the "hardest 40k/year job, and the easiest 200k/year job."
To be even more clear, I think what MD8 means is that if you are not LEAD LEFT or a STRUCTURING ADVISOR on a deal you will not be learning as much. In my experience, being a co-manager is the same as being second bookrunner if you are not a structuring agent. Someone correct me if its different, but for us its the same routine but just more money.
Is this the correct hierarchy for deal participants?
Lead bookrunner -> second bookrunner -> co-manager
Yeah, I mean I'm not all doom and gloom. I know one or two people that can probably get me interviews for FT positions, so I'm not totally screwed.
Not to sidetrack the thread, but I understand why banks are so against recruiting at non-targets. I have a 3.8 and a non target and there are questions people are getting in interviews that I definitely couldn't answer. Classes are easy enough that I coast through, have to touch up on things.
True, and most analysts/associates would actually prefer to be on the right (especially if they have already been lead-left on previous transactions). Same economics and less work...
Thanks again evergumptious. What do you think I should do after my graduation then ?
I'm from a non-target but am doing S&T, but am familiar with banking interviews as well....I def. don't agree with you here. Everything they would expect you to know in an interview you can learn on your own. A lot of those target kids are liberal arts majors bro...just read a vault guide and it's all gravy
I can't really say. If you are genuinely interested in investing and the asset management side of the business, I'd recommend one of two things. First, try to acquire an internship/ job at an asset management firm (GSAM, JPIM, Blackrock, Fidelity, Putnam etc.). Second, suck it up and do banking for 2 years and examine your options from there. Banking will open doors that are currently closed to you right now (Hedge funds, PE etc.)
Because Banking pays more, that is the sole reason, if anyone tells you different, they're flat out lieing.
Maybe so but you wouldn't say that in an interview would you?
Yeah, that's why I was interested in banking, not because banking is what I want to do but because of the exit ops. But I will definitively have a look at AM as well. Thanks you and SB for you.
how can you be 'on track' to make a certain amount when it's all based on commission aka very variable? and not every manager pulls down 300k-4M sry to burst ur bubble
and cold calling people to get their money doesnt seem fun to me
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