IB/buyside to Wealth Management

I started out in BB IB and spent some time at a credit fund.  Now 6-7 years in my professional career, I've been continuously thinking about transitioning to a RM role at a PWM/PB.  I'm passionate about personal investing and love the 1-on-1 personal connection with the clients.  For someone who just moved to the states for college, I don't have uncle's $$ to "manage" immediately which I see as a disadvantage without the local knowledge and HNW network.

When is the ideal age to transition (no white hair now)?  Who has done it and can shed some lights?

Comments (21)

Nov 30, 2021 - 1:09pm

In my experience, wealth managers would be salivating over a profile like this and with your interest level the fit would be great.  This is such an underrated career move that I think more young people should consider, particularly given the dynamics of the industry.  There is a literal succession crisis going on with something like $9T of client assets being managed by advisors over the age of 55, $3T over the age of 65 (source: Envestnet).

Thinking in the context of independents (i.e. RIAs vs. Wirehouses), you could have any number of opportunities.  On the smaller side, you could be a succession play for a senior advisor/firm owner.  In other words, work alongside and get introduced to their clients (while also getting clients of your own) and take them over in time.  Honestly the same thing could happen on the larger side, but you could also be leverage for senior advisors who are looking to free up capacity to continue to go after new clients.  There are countless gray haired advisors/rainmakers looking for competent next gen talent.

Feel free to PM me if you'd like, I'm not an advisor but I live this stuff everyday and could provide some guidance.

  • Associate 1 in IB - Cov
Nov 30, 2021 - 3:17pm

I appreciate your thoughtful response. I'm in IB currently but worked in wealth management in different capacities (both client facing and portfolio management) for about 6 years before going back to business school. I've decided that I would like to make my way back to WM at some point but haven't decided on how. If you were me would you join a private bank for a few years then go independent? Or would you try to find a team to join and build from there?

I understand that I'll have to take a pay cut initially but I don't see myself joining a training program for $60k unless I had some anchor clients already lined up. It also seems like there's so much aum out there looking for a successor that it makes more sense to buy rather than build from scratch these days. I'd love to hear your thoughts. 

Dec 1, 2021 - 9:58am

thebrofessor has some really good insights below.  My personal experience is more with independents, but I completely agree with his assessment of the respective training you would get.  On the independent side I'd expect the training to be more of an apprenticeship model and generally less structured, which is the cause for the variability.  

You'll also find a variety of 'cultures' and should consider what makes the most sense for you.  Some firms have a 'sink or swim' approach by which you're pretty much expected to bring in and service clients of your own to generate compensation.  There is the obvious good and bad of that, which some people find attractive and others (me for example) would get intimidated by.  The flip side would be coming in as more of a salaried employee until you got your feet under you, but it could mean years before you get a taste of "payout" compensation.  There are numerous iterations of compensation structures across the industry so I'm speaking in mass-generalizations just to give a sense.

The nice thing is that you can leverage industry lists/rankings (i.e. Barrons, Forbes, etc.) to get an idea of targets.  Most of the big (think $10B+ AUM) independent firms are not household names or national brands and generally all their websites read the same ("comprehensive wealth management", "holistic investment offering", "in depth estate planning", etc.).  The SEC IAPD website can be leveraged to get really great detail on client composition (are they HNW, mass-affluent, institutional focused?), ownership structure (are they generous with their equity or does the 70 year old founder hold 100%?), among other details.  You can view their brochure to get a better sense of their investment approach as well as other insights that will give you a leg up during interviews.  It is a great resource.

Most Helpful
Dec 1, 2021 - 6:50am

Thanks for the tag bro, couple quick thoughts, though I'd like for OP to give me some specific questions 

1. I wouldn't wait, someone said it's time in the business, fully agree with that, I started building my book at 25. Don't assume you can walk in and buy someone's book with no experience, they get paid a % of retained revenues so they want to find the right fit as well as a good check, also this idea is very well known and so there's more willing buyers than sellers

3. pb is more structured, higher initial pay, less demand on bizdev, but the clients are less mobile and you have less freedom since they're the banks clients, not yours 

4. independents' training programs vary all over the place so hard to say whether or not that's a good route initially. Buddy of mine went Indy right away but built it himself so no training

5. Wire house training programs (where I am) are likely all average to good but none are great, you'll need a mentor. I'm biased because I've compared numbers with Indy guys and think I'm at the best firm so I think we're the way to go

happy to help further, we're actually looking for an investment/rm guy on my team so hearing some of your questions is good prep for me too

  • Associate 2 in IB - Gen
Dec 1, 2021 - 10:58pm

Thanks both.  @thebrofessor @ebitDUMBDUMB

Where I'm at after some reflection:

  • Not obsessed with multi-billion M&A deals / investment; fine moving to a random city where my partner would potentially move to. 
  • Not the most popular person in the room and don't have thousands of Instagram friends but I'm good at developing very deep relationships with people, particularly older people.  I think this is my true strength and this is what I enjoy doing advising on a 1-to-1 personal level. 
  • WLB – 9-6/7PM, with a little bit of evening work+weekend work works fine
  • I think I enjoy a more client-facing role and be a RM rather than IP.

Questions:

  • Who should not be a RM?  Sales obviously is key but can sales skills be developed? How technical this role will be?
  • I'm assuming this is not a very "mobile" career.  You basically need to settle down in one place?
  • Don't mind taking a pay cut at the beginning ($300-400K is fine for me).  What is the comps expectation for the "average" advisor (salary / bonus split)?
  • Any thoughts on recent article of millennials want to manage their own asset now?
  • Say what I want to start tomorrow, what should I do?  Cold calling the top advisor in your area, or the top team on Forbes/Barron?
  • Associate 1 in IB - Cov
Dec 1, 2021 - 11:10pm

You sound exactly like me. I've always gotten along better with old people than people my age. 
 

do you mean make $300-400k eventually or you're willing to take a pay cut to $300-400k? 
 

merrills average revenue per advisor is just over $1mm. UBS is $1.7mm. At that level you are getting a 40-50% payout. You then have some expenses and should bonus your csa or whoever else works for you. That gets you to $400-600k. 

  • Associate 2 in IB - Gen
Dec 1, 2021 - 11:14pm

Eventually $300-400K works for me.  But I still want to make a decent salary in the $100-200K now. 

Have you made the move from IB yet?  What are some preparation work you are doing to eventually make the move?

Dec 6, 2021 - 7:16am

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