Wealth Management Associate to Internal Wholesaler
Currently work in the PWM division at a wirehouse/bulge bracket bank. Have recently become dissatisfied with the slow speed the firm has been moving at to promote me. To give you some background, I was an intern for a PWM team (led by 2 advisors) in college and they offered me an associate role when I graduated. I was supposed to spend between 1-1.5 years in the role and then I would be promoted to an PW advisor position. From there I would be trained to take over a piece of their book (one of the partners is planning on retiring in a few years). The other partner’s son all of a sudden decided he wanted to take over his dad’s book. This delayed my promotion into the new role by a few months, because our corporate office had slowed and or stopped internal/external hiring for the PW advisor role. My boss and the regional manager then made it known to me that we would start my paper at the start of 2025. Now it’s the start of 2025, and apparently our corporate office has not given the green light to hire more PW advisors until the middle of Q2-start of Q3 of 2025. Regional manager told me I would get promoted between the middle of Q2 to middle of Q3, barring any crazy changes to the economy and/or firm. This timeline would put me at 2 years or more of being in the associate’s role, which would be 6 months or longer than expected. Am I getting screwed? I feel like as time goes by this promotion just keeps getting pushed back.
I’m getting my CFP this year and another certification as well. Fully licensed too. In the current role I’m in, I’ve worked on portfolio management, financial planning, prospecting, and typical ad-hoc client service work.
Have seriously considered leaving the firm I’m at to become an internal wholesaler (eventually an external) at an asset management company. People I know who work these jobs seem to have it made with solid bases & incentive comp, career growth, and pretty decent work life balance. Should I make this switch? Any advice on the interview process? What should I say if they ask me why I left the company I’m currently at?
Should say start my paperwork at the start of 2025 in the first paragraph
I have been doing sales in s&t for two years, and have been looking at internal wholesaling as well. I don't have a great outlook on s&t.
From the people i've networked with, it depends decently on what your end goal is, although thats hard to plan out at a young age. I think wholesaling in your 20's, and then switch to pwm in your 30's if you want.
Pros of wholesaling:
B2B sales vs retail
Higher base
Part of a large brand where you run your own mini distribution business
Definitely higher AVERAGE comp than pwm aside from rainmakers. Although rainmakers wholealers clear over a mill so that may be a moot point.
Pretty solid path to 500k-1 mill earrings if you are good at sales, and you dont have to start a business, work 90 hour weeks like IB, or build a book in the sense of PWM.
Better exit opps. While neither has great exit opps, a wholesaler can stay wholesaling cashing checks, go to pwm and buy a book with all the money they made, or switch to another b2b sales job, do institutional asset management sales, or go to mba and have an easier time pivoting to IB or consulting since its at least B2B IMO.
Probably higher success rate for a young person
Pros of PWM:
The book is yours depending on the shop. The first few years are tough, but you can build a book and sell it at 3x 12 month revenue and bounce firms. Wholesaling you don't own anything.
Easy to start your own RIA and really build a business for yourself. Build a 500 million AUM RIA at lets say 85 bps with a few employees and clear over 3 mill.
Working with individual clients. Some people prefer relationships with individual clients instead of business/institutional clients
Thanks for the response man. I totally agree with everything you’re saying. I feel like the only thing that’s keeping me around in PWM at the current moment is the prospect of taking over my boss’s book fully once he retires like he’s mentioned before. His book is clearing 1.7MM annually in terms of gross rev, after split with the firm gets him to around 750k+ comp (not counting stock comp and other performance bonuses). To get a small piece of his book now, build up my own clientele, & potentially take over his book is a hard opportunity to pass up on in my 20s. But also none of that is ever fully guaranteed. That’s where wholesaling is reeling me in due to the much higher base, better growth opps without the risk/challenge of building a PWM book, & honestly better balance with work & life. What would you do in my shoes?
I’m thinking if this current situation I’m in doesn’t work out at a certain point. I should just move to wholesaling & come back to PWM if the opportunity comes along.
I think this really comes down to how likely is it that you get some of this book. Because I agree that if I could choose inheriting some of that book, while building my own clients and knowledge, it is a no brainer choice over wholesaling.
I think most people would rather have their own book and clients if they could snap their fingers and have the end result. That situation IS the exit opportunity imo and if you are on track to already have it, may as well just do it now. I am a firm believer that being a rain maker in PWM is the best job in finance and that most guys in IB or s&t wish they had a book that makes a mill a year on autopilot while being their own boss and working reasonable hours and having recurring revenue. If you have a path to it, I would just do it bro.
I guess it really depends on how likely it is. If this guy is making a bunch of money on autopilot, how likely will he really give it up. And if he does give it up, will it just be to his son.
I don't know a ton since im a young guy too tho.
Older (60) and have done both. Started in retail , was recruited to wholesale, and now am settling back to a small retail book as my glidepath to retirement/semi retirement.
These are both quite satisfying but very different.
1. Retail is about building relationships/trust with end user client, selling, and literally asking for a check. This is their money they are entrusting you with. Great responsibility and a great feeling when they move everything to you and depend on you as their financial go to. Takes awhile to build and you're constantly servicing those accounts (or your team is).
2. Wholesale is essentially building a distribution company. Yes you sell and build relationships, but at the end of the day, your client is the FA, not the end investor. I think it's better to have retail experience so the FAs know you've walked in their shoes, can get a check, etc.
These are vastly different existences. Retail your building your own book. It's a business, but more like a practice (think Medical practice. A buyer is buying your book your clients and hoping to retain them). Once it's built, it's a nice annuity. I have that now and it gives me plenty of options in retirement. Work, sell, half and half. I've basically paired down my primary clients and can work very part time while still earning a great living, covering all my cash flow needs, etc. Don't know that I'll ever actually retire as most of my clients are friends and referrals.
Wholesale is more of an institutional feel. You're part of the machine. You'll have a blast meeting with the sales group at off site meetings, getting to know the senior execs of your firm, hitting quotas, getting recognition, etc. However, it can become a grind. One thing is constant in wholesaling and that is change: Comp, product, territory, quota, goals, focus, etc. Seems like it all changes every yr and you need to adapt and build a plan around attaining corporate goals. Your not really building an asset here (even though you may own the relationships) but you'll make great money along the way, so what you own is what you invested.
Sky's the limit in retail comp. Know several 7 figure earners and a few 8 figure earners. Most fail, but assuming you succeed, you'll get to several hundred k in 10 yrs. Why do most fail? They can't build a system that provides access to clients/prospects. You need to constantly bring in new money. Maybe they're lazy. Maybe they can't close. Maybe X, but most do fail.
Wholesale you will likely make 500k within a few yrs in the field and the really good ones will make more. I'd say the range is 250k - 1mil. If you're making less than 250k, they'll fire you! Hard to make top retail producer money because they change the game on you, change your quota, your comp formula, etc. I know a few shops that had unlimited earnings while they were young and aggressive, in major fund raising mode. Some of their guys were making 2 mil/yr. However, after awhile, they lowered the formula and now they max out at 750k. Still nice, but...
They're just so different. How do you want to spend your day? Working on client planning issues and solving their problems, dealing with the service, etc. Or working with the FAs, showing them how to build their business, where your products fit in, helping them succeed.
Thank you for the advice man. Great to get some insights from someone who’s been on both sides of the industry for a long time.
What would you advise for someone to do in the situation I’m in? I feel pulled in both directions because I think I would love doing either. Part of me really wants to stick it out in PWM and grow my own practice because I enjoy planning & managing client portfolios. But I also love just shooting the shit with other advisors talking about various investments and what’s going on in the markets. Both have great earnings potential. PWM seems to have a bit more risk at play in terms of pay, but also more reward too.
I love my current bosses’ too and think everything will work out in terms of me working for them, building my own book & helping take over a part of my boss’s book as he steps back from the business. But I tend to worry about how the timeline for this promotion has been getting pushed back over and over by my firm. Just don’t want to spend all this time waiting for this promotion, pay raise & growth opportunity, all for it never to happen.
Really about which role you think you want to do. They are quite different. Personally I find the helping the end investor very satisfying. I used to find helping the FA grow his business very satisfying but no longer do as my impact was mostly limited to the time I stayed in front of them. I acted as a practice consultant who had products available. The products are pretty similar to any other major firm. Certainly didn't want to lead with product because once they no longer perform you're dead. So practice consultant makes sense. I showed them how to be a better advisor (provide tons of services), how to run a more efficient practice, etc. Basically became a values stakeholder without being on their payroll vs. being a vendor. When I paid them a lot of attention, made major change and progress in their growth. But they would typically fall back to their natural proclivity once out of site. But it was rewarding.
As an FA, I have far more control of the outcome. When I started, the business was far more transactional (compensation wise). I've always been a relationship driven advisor. But when I started, comp was pretty much up front commissions so once you transacted you were done until you got the next transaction. I did well, but I favored wholesaling because that was more of an annuity. Yes commission based but there was always a group writing new business. However, today, much of the FA world is residual so that's no longer an issue. You get the annuity either way.
I would stick with what you enjoy doing. Definitely be careful of the nepotism issue. it's very real and impossible to win. But if you can build a book or go somewhere else where there is real succession, that's great. Just be realistic.
The firms you mentioned are great. Fees are far greater inthe Alt space so wholesaling in that world is far more lucrative.
Some great comments here already. What I’d advise OP is: if the kids are coming into the business it’s time to find your way out. You will lose to them and have to say thank you. I think the FA path is harder than ever these days for a variety of reasons, but if you think you can build a book then I’d tell you to start doing it right now. Bring in any client, maybe 2 and watch how quickly they give you the FA title. Wouldn’t call it a promotion since the comp structure is very different. Wholesaling is a great business, but you need a bit of luck like anything to succeed. You want to make sure you’re at as good of a firm as you can get to and ideally you really like your sales manager and get him to fight for you. I’d also tell you to try and focus on the top of the market Institutional/Private Banks/Platform channels rather than the real knife fight wholesaling with individual FAs in branches if you can help. Lower comp but much greater flexibility. The other comment here about how they change every year is spot on, but if you can get to Capital or Wellington you’d be doing very well.
EDIT: one more piece of advice.. because everyone is always hiring internals and every hiring manager is willing to take a chance on someone personable you should shoot for the moon for your first role. Don’t settle for something to “break in” find a good fit at a good shop, doesn’t have to be a major and maybe you’re better off it’s not.
Thanks for the info and advice man. Obviously nepotism is everywhere and in every industry, but wealth management seems to be one of the places where it’s the most prevalent. Don’t love that fact about the industry.
What’s your opinion on Invesco, Stepstone, AllianceBernstein, and Blackrock? I’m based in the Southeast so landing at one of these firms would prevent me from having to move very far or move at all. Have good relationships with ppl at those firms along with a few others like Capital Group & Franklin Templeton for example.
The nepotism is for pretty clear reasons… it’s the only business in the world where every single one of your clients kids will also become your client. Those are all good firms, I’d also look at Voya. If it were me: I’d try to get to an alternative asset manager if I could… Brookfield, Ares, etc. the alternatives space is a little newer to the wealth channel so there’s a lot of opportunity and comp is better than traditional AMs (or can be)
Totally agree with everybody has said, couple of additional thoughts
1. If you want to stay in PWM you should see if you can get in with one of the big private banks. JPM, GS, Citi all have decent sized operations (JPM is the biggest) and it’s a much better environment for younger people to learn and grow vs the wirehouse set up.
2. You mentioned your team does a lot of alts, does your firm have an internal alts desk to help the FAs sell the firms alts deals to the end clients? Most warehouses have desks that cover the advisors for various things (fixed income, equities, structured notes, etc) Could be easier to make this move vs going to 3rd party asset manager.
3. If you do move to become an internal and can’t find a seat at a good alts manager I’d make sure to go to a firm with a good fixed income offering. It’s a much larger market and a lot easier to outperform vs equities.
I assume for the private banks networking is everything when it comes to getting in. What roles should I target since I’m coming on 2 years as an associate at PWM part of a wirehouse? Analyst? Associate? Out of the 3 PBs you mentioned, is there one that’s much easier to get in the door at?
Yes our firm does have an alts desk, but they run a pretty lean team so not many opportunities to get hired on.
What shops have the best FI offering in your book with your background in FI? Which firms have the best all around offering across equities & FI?
Thanks for the advice man
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