Monkeys, I haven't posted much on here, but I've been a lurker for some time and have been helped out by many of your posts. I now hope to return the favor and give some insight into the private bank/wealth management world with this Q&A. Some background: I went to a target university and have been in a bulge bracket private bank for 3 years now, including an internship. I am up for promotion but have accepted an offer at another firm (aviation finance) and will be starting in a few weeks. Hit me with some Qs.
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I am nearing the end of the analyst program and will be promoted in a few months. On one hand that's a good thing because I'm being rewarded for the time that I put in, but on the other hand it means that I will be more or less in this for a career. I don't think I'm passionate enough about wealth management to commit to it as a career as I feel like there are things I'm missing. I want to gain some true business skills and strategy experience so I am using this time as a natural transition to gain that experience. (At the end of the day I want to become a business owner or be in the C-suite of a company helping make the decisions.)
I also feel like the learning curve plateaued for me after year 1 in this role and that from here on, all I will be learning is how to effectively communicate and manage relationships. These are huge skills and take time to perfect, but I'm looking for more.
Good questions.
COMP
At my firm, comp in most regions outside of NYC is as follows:
Stub year: 10k signing. 75k base. 5k bonus.
First year: 75k base. 10-20k+ bonus, but this varies by market.
Second year: 80k base. 15-30k+ bonus, but again this varies by market.
Third year: 85k base. Promoted to Associate halfway through the year.
Associate stub year: 125k base. 15k bonus.
Unfortunately after that, I'm not sure about the bonus structure, but it's likely a similar bump as between Analyst years.
CAREER
A long-term career in the PB involves being an exceptional relationship manager and sales person, essentially. At the end of the day the products you sell aren't much different than any other shop's. The way you win business is by winning trust and being someone that your clients and prospects feel comfortable with.
In the long run, yes, you spend your time gathering assets for the bank by either A) bringing in new clients, or B) growing existing relationships.
BUILDING A BOOK/FEES
At my firm, internal version of AUM included everything from lines of credit and mortgages to deposits, brokerage assets and managed assets. That being said, many people in my office (smaller office) cleared $100MM in total. The folks covering the UHNW business cleared $1B in many instances. In larger markets, many of the UHNW bankers had multiple billions under management, but I doubt they were clearing $800k.
The firm pays well but it doesn't pay like an RIA where you get fees off of AUM. Our base + bonus structure aligns interests with the clients and allows for a comfortable living, but doesn't allow for the huge checks you'd expect from a $1B book... I would assume most big dogs cap out around $500k all in.
That being said, the base + bonus structure is good when fees are being compressed. It allows for the firm to cut costs on internal expenses/fees, which adds to the bottom line for your clients, but it doesn't affect your comp.
Thank you!
I was a hybrid investor/banker analyst so I got to see a little bit of both worlds. As a banker analyst you'll be primarily involved in helping your banker team manage their relationships as well as help put together the pitchbooks. Most of your day will involve assisting with client requests (i.e. fielding emails/calls) as well as running with the majority of administrative tasks for your team (account opening, KYC initiation, service requests, etc.) You'll get to work closely with your banker team and begin to develop relationships with the clients.
The investor analyst role is, as you would guess, a little more quantitative in nature. You'll be supporting the investment desk and your investor team in any investment portfolio analysis needed. Most of the time you'll be putting together investment proposals and performance reports or doing ad hoc research into certain investments. Additionally, you'll likely be fielding portfolio/investment related questions that either come to your team directly or are sent your way from the banker teams. You'll get a good grasp on the investment platform of the firm and learn how portfolios are managed given the macro environment and your firm's investment team's views.
Hope this helps.
Extremely helpful, thank you!
A few additional questions, if you don't mind:
How are analysts usually placed into those roles - is it at all preference based or just where the team needs an additional hire? Also, is there any mobility in switching between these roles at both junior and senior levels?
Could you expand on what the prospecting process looks like at your PB, especially since these are UHNW clients and not your average retail clients?
From what you've seen, where do most PB analysts or associates end up/any insight into common exits?
Could you tell us more about your move to aviation finance?
Thanks again.
**PLACEMENT/MOBILITY**
Placement into the roles is, to my knowledge, done purely on a needs basis. I believe most job postings will state whether it's a banker role or if it's an investor role, but really it just depends on what the team needs.
There is some mobility, depending on the market, to move between roles as an Analyst. It gets a lot harder after you've been promoted to Associate to move to become an investor or vice versa.
**PROSPECTING**
In the UHNW space, bankers rarely cold call on anybody - most of the leads come from warm intros or referrals. The prospecting isn't nearly as glamorous as you think! Most of it involves scrubbing corporate websites for information, LinkedIn creeping, Google Maps + realtor websites + home tax records, public company filings for insider holdings information, general web searches. There are also some paid subscriptions that help in this too.
**EXITS**
To be frank - this is the main downside of starting out in the PB. As you may know, IB experience is basically a requirement for "high finance" jobs (PE/HF/VC). In the PB you won't get any modeling experience and most of your skills will be soft skills (esp. as a banker analyst). You will learn how to communicate effectively, manage multiple timelines and develop a very high attention to detail. You'll also gain a very solid understanding of how the economy works and how portfolios are positioned as a result.
All of this is extremely helpful for your career, but since you won't have deal/transaction/modeling experience, it's difficult (not impossible) to get into other areas of the finance world.
Most exits ops include family offices or other PB/WM/RIA shops. I had also looked to going into my bank's equity research group as well as into the investment bank on the M&A side, both of which are still very difficult despite already being at the firm. Going to the IB means starting over in the analyst program too... If I had stayed in the PB I would have gone to get my MBA to switch careers later.
**MY MOVE**
As I mentioned previously, I was looking to switch into a role that would allow me to gain some business skills and learn a little more about how a business operates. I also thought it would be a plus if the company valued the work I’ve put in thus far in studying for the CFA exams. I wasn’t specifically looking to go into aviation finance (didn’t really know this world existed TBH) but I saw the opening on my daily LinkedIn Jobs search and applied. I knew one of the employees at the firm from a college organization and I sent him my resume. The company recently began operating under a PE fund model so I’ve somehow managed to be one of the few PB analysts to get into the “2s and 20s” world without going through the IB/MBA route. I’m learning the operations of the business as well as how to manage fund operations, so it’s a win-win I think.