Is PWM truly a professional black hole for aspiring financiers?

After going through the interview process myself and chatting daily with the summers about their experience, I would like to say that a career in PWM is a professional black hole for aspiring financiers.

The business model of PWM, while threatening to eclipse the revenues earned in IBD, relies far too heavily on the few whales who were strong-armed into depositing a fraction of their fortune in what essentially amounts to a hemorrhaging escrow account (with the proceeds going to the Private Wealth Advisors, of course). I incorrectly assumed that the proximity to Silicon Valley afforded the bulge bracket's SF teams the lucrative pleasure of servicing the Zucks, Brins, and Pages of the world. But this is absolutely not the case. It appears as if these microscopic, specialty AM shops dotting the perimeters of 1 Hacker Way beat the Goldman Trust to the prom queen, and snatched up any potential gross credits (the service fees the firm fleeces from their clients through whatever financial alchemy the Securities arm cooks up) the PWAs might’ve managed. What’s left are a few technology has-beens who pitifully cherish the automated emails generated by the CRM wishing them a happy birthday. As a Financial Analyst, you would be subjected to the painfully pedestrian task of running an automated script (not actually implementing this, but literally clicking a button) on a client’s portfolio of holdings, generating a pre-fabricated deck brimming with irrelevant and meaningless statistical data whose photons rarely touch human retinas, performing extremely minor and arbitrary formatting adjustments, and binding the 10pg atrocity yourself in the break room. Other than that, you’re basically assuming the role of Siri: you’re issued a condescending voice command (usually with no explicit endgame envisioned) to perform a simple merge-sort on a few Google results. Occasionally, some of the summer interns are invited back to stay (the last time I checked, it was like 1/4) and enter into a 2yr stint and from there, the blessed (admittedly, quite attractive) few who managed to stomach the crushing boredom of the job and the sycophantic behavior of client solicitation are asked to join the ranks of PWAs and become an ultra-competitive mini-company housed within the investment bank but inevitably engaged in a Mexican stand-off with the other teams. The contention is built into the system from day 1, and an overpaid managerial layer with inflated titles arbitrates the disputes that erupt between teams fighting over clients none of them has even met yet.

If you’re a ridiculously good-looking moron who can pick up an 8.5 at your Barnes & Noble, are wont to outsource your work to the starry-eyed back office patsies begging for a whiff of your asshole at the first sighting of a % sign, and a ferocious “thrill-of-the-chase” addict, then PWM may be a good fit for your Wall Street aspirations. On the other hand, as a brief perusal of various PWM Summer Analyst LinkedIn profiles reveals, a lot of those seduced by the prospect of the Goldman Sachs career platinum Amex on their resumes was enough to lure them into the wealth management game but never really improve their professional standing after. I would be curious to know others’ experience in the space, and I warmly welcome all adversarial, anecdotal data that reject the premise of my title question.

 

Tl;dr While PWM is a very high attrition business some have been able to leverage it to greater things. Both Jim Cramer and Anthony Scaramucci started out in GS PWM and were able to start their own HFs partly with supports from former clients.

Too late for second-guessing Too late to go back to sleep.
 

If people in PWM are ridiculously good-looking morons, then are all those in IBD ridiculously unfortunate-looking nerds? Or are we only stereotyping one piece of the industry pie today?

I'd imagine you're one of those guys who pronounce finance "Finaunce". I'm afraid of you tbh

Compensation is not commensurate with education.
 

LOL bitter at no FT offer?

If your goal is IBD or anything else, PWM is the perfect first internship to get your feet wet and demonstrate interest.

If your choice of career is PWM, you obviously don't understand how it works or the options that people can create.

What I think turns a lot of people on this site off is (1) having to do sales (2) without preestablished relationships (3) in an unstructured environment (4) with exit ops that YOU have to create.

Get busy living
 
Best Response

Interesting post....is there an actual question being asked here?

I work in PWM (and I do agree that I am ridiculously good looking) and I can answer any question you might have about the job. Yes there is a sales aspect because you need to build your book of business; yes we tend to work in a fairly unstructured environment which is a huge plus as far as I am concerned and yes the exit opportunities are probably less than IB. That being said it can be an excellent career for those who are willing to put in the time and effort and I don't know any job that will pay me as well while having total control over the hours I work, the type of business I choose to run and the clients that I decide to work with,

 

+1, nice post.

How long have you been in PWM and how would you describe the culture working for a BB while essentially running your own business? I had a superday a few days ago with a BB for a SA PWM opportunity. I am actually really interested in the opportunity (also interviewing with asset managers in the area) but it seems to get a really bad reputation on WSO. I'm drawn to the entrepreneurial aspect of it, but from everything I have read it seems that you don't get any real responsibility as a FA.

Also curious what pay structure is like for first/second year FA's since they are brand new to the team and have not had the opportunity to contribute anything material. Do they start at a reasonable base (specifically within BB), or are they counting on earning a large percent of their compensation from commission during their first few years?

I apologize for so many questions but would appreciate any insight you can provide....thanks in advance

"I must create a system or be enslaved by another man's." William Blake
 

W. White-- Here are the answers to your questions:

1) I started in PWM back in 2006.

2) Not get any responsibility as an FA? This is 100% incorrect. You will be totally responsible for every aspect of the job which can be completely overwhelming during your first few years. You are responsible for client aquisition. client servicing, financial planning, portfolio management, etc, etc.....you perform any of those functions poorly and your client gets pissed off and moves their account elsewhere. Obviously if you are hired onto a team you may have a more specific role but either way I would argue that few jobs anywhere will pile as much responsibility as quickly onto a new trainee as in PWM.

3) New FAs typically get paid a base salary for 2 to 3 years and then transition to 100% commissions and fees. Its been a long time since I was paid a salary but from conversations with some of the new people I am hearing numbers in the 70K to 80K range. From there you can earn a little extra with production and bonuses. Year 2 you are probably looking at around 90K to 100K total comp. Afterward your salary gets pulled and normally your total income drops a bit until you are able to grow your business enought to offset this. Average production in my office for an established producer 10 years+ is about 900K which translates to about 365K cash comp. We have several producers that do more than double this amount.

 
sfbroker:

Interesting post....is there an actual question being asked here?

I work in PWM (and I do agree that I am ridiculously good looking) and I can answer any question you might have about the job. Yes there is a sales aspect because you need to build your book of business; yes we tend to work in a fairly unstructured environment which is a huge plus as far as I am concerned and yes the exit opportunities are probably less than IB. That being said it can be an excellent career for those who are willing to put in the time and effort and I don't know any job that will pay me as well while having total control over the hours I work, the type of business I choose to run and the clients that I decide to work with,

Very well put

I'm Texas Made Texas Paid
 

I worked in pwm and now I'm in Asset Management selling to people like sfbroker. The fact is that it's a stable business that you make what you put in. If you work your ass off you will make as much as an ib person with netter hours later on. Sf will tell you that it's a business that is front heavy and gets easier later on.

Beast
 
Angelus99:

I worked in pwm and now I'm in Asset Management selling to people like sfbroker.

...I smell a wholesalerrr

W. WHITE, this is a pretty analyst-centric site and the entrepreneurial aspect is probably a bit scary to some, but the truth is you can absolutely kill it relatively quickly if you have laser-focus and you are driven. I'm no expert, but I have heard of new FA's ditching their 30-50k base (draw, w/e) to go to a commission structure before their employers required them to...in order to make much more. BUT there are just as many, if not more, new FA's who take their licenses and go elsewhere or starve trying to build a book.

Compensation is not commensurate with education.
 

Being a wholesaler is a pretty good gig and it pays well right out of the gate. When I first entered PWM I contemplated making the jump over (and becoming a wholesaler) but I witnessed something in 2008 that changed my mind forever.

During the financial crisis wholesalers were gettting canned left and right but not one established producer in my office had any problem. In fact not one established producer even worried about their job or what would happen if the firm they worked for went under. They knew then (and I know now) that regardless what is happening in the market or within the firm....successful brokers always have a place to go. As long as we produce, nobody fucks with us and that is a beautiful thing.

 
sfbroker:

Being a wholesaler is a pretty good gig and it pays well right out of the gate. When I first entered PWM I contemplated making the jump over (and becoming a wholesaler) but I witnessed something in 2008 that changed my mind forever.

During the financial crisis wholesalers were gettting canned left and right but not one established producer in my office had any problem. In fact not one established producer even worried about their job or what would happen if the firm they worked for went under. They knew then (and I know now) that regardless what is happening in the market or within the firm....successful brokers always have a place to go. As long as we produce, nobody fucks with us and that is a beautiful thing.

This X 1000.

A high producing broker is by far the most secure position in finance. It's kind of funny, because it's probably the least secure in the beginning since there's probably an 80% chance or greater of someone not surviving two years. But, if you make it past year 5, there is ultimate career security. Every high producing broker at Lehman got jobs (and large signing bonuses) even though we went bankrupt. It barely mattered to them other than the inconvenience of having to change firms.

 

It really depends on your background. Because wealth management has matured somewhat as a practice there are more opportunities than there were before.

Demographics: Wealth Managers trend to the old side: Lots of book value transfer...lots of opportunity. Tax & Estate Planning: Immunity to margin pressures that exist in other "high finance" careers. HF entry points: The reality is for anyone without very specific education and pedigree, the only way to realistically make it into a hedge fund is with an exceptional book.

 

Can someone elaborate on what exactly a wholesaler is? This thread is the first time I've seen the term keep coming up

"I must create a system or be enslaved by another man's." William Blake
 

So selling mutual funds to PM's basically?

I spent a day with a PM at MS a few years back and he mentioned how a couple times a week reps come in from mutual funds and bring lunch/take them out and try to sell them on their different products. One of the shelfs in his office was stacked with marketing material from them and said he rarely checks it out.

I think that is what you mean, please correct me if I am wrong.

"I must create a system or be enslaved by another man's." William Blake
 

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