AMA: 3rd Year Private Bank Analyst

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 AMA.

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.

Comments (22)

Apr 9, 2019

Thanks for doing this.

I'm looking to get into a registered associate position to get my FINRA licenses and then the CFP or CIMA. Do you think starting at a middle market bank doing that would prepare me in 2-3 years to switch to a BB? I know the registered associate is more support but think I could learn the business under an advisor.

Apr 9, 2019

I'm unfamiliar with the registered associate role, but if you're saying that it's more of a support role, then I believe we have an equivalent here. If you're wanting to get into a BB private bank someday, then starting at a middle market bank to get your foot in the door is a good approach.

Focus on passing the CFP if you can. That's most helpful in this industry. You can use that, along with your registered associate experience to at the very least lateral into a BB in a similar role. I believe that having the industry experience and some credentials behind your name would definitely help you jump into an advisor role.

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Apr 9, 2019

Why are you leaving?

Apr 10, 2019

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.

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Apr 10, 2019

I am graduating in May and will be joining a BB private bank after doing an internship this last summer. I am a little worried about being able to have the technical skills to be able to transition to a different job after my analyst term. Any tips?

    • 1
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Apr 10, 2019

That's one of the things that worried me as well. This industry is great for crafting soft skills (which are very important in any business) but not so much for technical skills. I worked to better position myself by studying for the CFA exams. I'm on Level III now and have used the process of studying as a way to stay mentally sharp and have some transferrable skills. Some stuff you'll do in excel could likely be automated, so you could also think about learning VBA or Python (huge skills to have) in order to be more competitive.

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Apr 15, 2019

Thanks for the AMA! two questions:

  1. would be to sharing what comp is like through the analyst program and once you get promoted?
  2. what does a long term career look like for someone in PB? Is it spent mostly gathering assets (i.e. selling uhnw & hnw clients) for your bank?
  3. Close friend of mine was brought into his dad's wm practice underneath a tier 2 BB. They had a good amount aum (north of 100m) and his dad was easily clearing $800k+. How hard is it to build up a book of business like this nowadays? Do you see any compression in fees generated for the banks due to automated wealth management firms rising (wealthfront)?
Most Helpful
Apr 25, 2019

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.

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Apr 30, 2019

When you say max out around $500k, I am assuming you dont mean NYC?

Apr 30, 2019

Again, I'm not sure what the VP+ really makes, but I wouldn't be too surprised even if some EDs+ in NYC didn't make much north of $500k.

May 3, 2019

PB is a very wide definition. If you're a traditional broker or wealth manager, then your comp is going to level off. You can do the math easily. $1 billion in assets managed, your raw revenue off 1% is $10 million, and doing the standard 40/60 split between the team and the firm and you're left with $4 million. If you run the team how a typical $1 billion with say 2 partners/1 mid-level guy/one or two juniors, then regardless of region you would be clearing $1 million.

If you're in the expanded PB complex that includes strategy/financial markets views/internal money management, etc... or a mix of all of the above, then your comp may be higher depending on how valuable you are. The lead investment strategist at one of the main wirehouses will be making more than the head of a $1 billion team.

Now these are all simplistic examples. These don't take into account signing bonuses and team shifts where you obviously need to float higher comp targets to get teams to sign over, but this meant to illustrate what it could look like in a typical year.

RIA as OP mentioned is different because you are devoid of sharing the fees with a larger parent company. You might be asking why everyone doesn't just do RIA. Wirehouses and more established firms bring reputational credibility and resources that you may not get at a run of the mill startup, but the RIA and independent channels have been getting more popular.

Jun 10, 2019

Couple months late, but had a couple questions as I'm extremely interested in pursuing Private Banking.

Was wondering if you could speak more about your specific position (Banker Analyst vs. Investor type role), and if you could also tell us about your day-to-day / general lifestyle in the Private Bank?

Thanks a lot, and congrats on the new job.

Jun 10, 2019

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.

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Jun 11, 2019

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.

Jun 19, 2019

Curious to hear what a typical private bank client looks like in terms of net worth, occupation, age, general demographics, etc. I figure this will vary by location, but any color on this at least for your particular region?

Also, are the PB thresholds (such as $10mm in investable assets) firm minimums, or flexible? Thank you.

Jun 20, 2019

As you mentioned, this is all very dependent upon your group within the bank as well as your region. In many offices there are 2 distinct groups - one covering high net worth individuals and the other covering ultra high net worth individuals. The "minimum" account sizes are $5M and $25M, respectively. These minimums aren't set in stone though, because it's very hard for a banker to get a client to bring over large chunks of their assets at once and the transition typically happens over time. Additionally, some clients are thought of as "incubator" clients, where they may not have the liquidity now to meet the minimum, but they will have a liquidity event in the near future and the banker is building the relationship in anticipation of that. This happens a lot with business owners that are anticipated to sell or go public.

Demographics vary by group and are what you'd expect. Younger business owners, lawyers, doctors, etc. in the HNW group and more corporate executives, former business owners and "old money" in the UHNW group. In the hub offices - NYC, SF, Chicago mainly - there are even specialized groups covering niche demographics (e.g. PE principals only, HF managers only, corporate executives only, etc.). Additionally, some bankers focus on a vertical in their market and build their business that way too - there's flexibility.

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Jun 21, 2019

Thank you for being willing to help everyone out. Your feedback thus far has been extremely valuable! I have a question, if you don't mind:

I'm from a non-target (just graduated in May) working in Corp. FP&A as an analyst, but want to make the move into PB as I've developed my soft skills well with my acting background and it is clearly a better fit for me (I'd rather not be in Excel 100% of my day). In your opinion, what could be my best approach to making this move? I am taking the SIE soon and plan on getting the 7, then studying for the CFA. Any advice would be much appreciated!

Jul 11, 2019

Hey there! Sorry I'm late on this - I swore I replied earlier, I guess it didn't post...

Getting the 7 and 63 would be helpful for being hired "off-cycle" as you'll be able to get to work sooner than some of the other applicants that would have to focus on taking those tests the first few weeks on the job (on-cycle analyst hires take the exams during training, but I think off-cycles take it while working...)

Not too sure about the SIE, but it couldn't hurt. The CFA tests are very hard and shouldn't be taken lightly. That said, passing even Level I will give you a leg up on your competition.

I think that your best bet is to put those soft skills to work and get to networking! I'm sure there is a PB office near you - find your "in" and reach out. This is essentially what you'll be doing as a banker anyway!

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Jul 11, 2019
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