in my opinion, institutional is better because it is more interesting work, you're dealing with smarter people, and dealing with a lot more money.

would you rather have harvard endowment fund ($20+B) or joe shmoe ($20+M) as your client?

id go with harvard fund

just my opinion though, i'm sure there is someone out there that prefers PWM over institutional sales

 

True - the money is bigger institutionally but you get greater exposure in PWM throughout al aspects of the AM field rather than being pigeonholed into CSM or PM with institutional. PWM might make a good starting point - plus you meet the people who have amassed $20m and see how they have done it which is always a good networking contact.

 

pwm is really not as sexy as you're making it sound. pwm = financial advisory. most of the time you only have discretion on a small amount of the money you manage. and from what i've seen, most fa's don't even do their own analytics or research to play with that money, they'll outsource the research or just listen to wholesalers.

the only people ive seen who enjoy the private client side are breakaway advisors who manage big books 750M+ with full discretion and do all research and analytics by themselves. aka what people on the institutional side do, with a lot more money.

although i will say a lot of people on the inst. side do start off in pwm, it does offer you to get your licenses and get some decent sales experience, so if that's all you can get it definitely is not the worst thing in the world.

 

No matter what they tell you, the wealthy client is always the second-class citizen in finance. Institutions come first, which mean access to more products=>institutional AM less about building relationships and more about just pure investing. However, Institutional Sales is exactly what it sounds like, and you won't be investing; i'd go with IS at a BB, and you it's slightly easier to make the leap if you want to invest within institutional AM than from PWM/PB to AM.

 

PWM is great once you have a book and steady clients. What sucks is the 5+ years it takes to get there. That and the fact that you are dealing with people with a lot of money who might not have much financial knowledge. Try dealing with a rich wife when the market is down.

My vote is for Inst Sales. You are working with traders, researchers, institutions. Basically you are at the top of the food chain.

 
Dr Barnaby Fulton:
Pros and cons of each side? Mostly interested in institutional sales vs. pwm/pbanking.

Institutional sales. Actually anything on the institutional side is better than PWM. You'll find there is more consistency and sophistication to investment philosophies on the institutional side than private clients. On the PWM side, you'll find yourself talking people who make a lot of stupid and emotional decisions with their $$$.

 
Dr Barnaby Fulton:
Pros and cons of each side? Mostly interested in institutional sales vs. pwm/pbanking.

Institutional sales. Actually anything on the institutional side is better than PWM. You'll find there is more consistency and sophistication to investment philosophies on the institutional side than private clients. On the PWM side, you'll find yourself talking people who make a lot of stupid and emotional decisions with their $$$.

 
Dr Barnaby Fulton:
Pros and cons of each side? Mostly interested in institutional sales vs. pwm/pbanking.

Institutional sales. Actually anything on the institutional side is better than PWM. You'll find there is more consistency and sophistication to investment philosophies on the institutional side than private clients. Your interaction on the sell side (institutional) will be with portfolio managers, analysts, etc. On the PWM side, you'll find yourself, not unlike a broker, talking people who make a lot of stupid and emotional decisions with their $$$.

 
Dr Barnaby Fulton:
Pros and cons of each side? Mostly interested in institutional sales vs. pwm/pbanking.

Institutional sales. Actually anything on the institutional side is better than PWM. You'll find there is more consistency and sophistication to investment philosophies, ppl on the institutional side than private clients. Your interaction on the sell side (institutional) will be with portfolio managers, analysts, etc. On the PWM side, you'll find yourself, not unlike a broker, talking people who make a lot of stupid and emotional decisions with their $$$.

 
Best Response

So I've been meeting with people on both sides throughout my time as an intern, and I've heard quite the opposite. Institutional sales is not as glamorous as it sounds and the Private Bank at a BB does not = retail brokerage. Institutional sales, from what I have heard, is less hours, less money and less client interaction. In institutional sales you're pitching a fund or a strategy to an investment board with investment consultants. Not an easy task, and the average turnaround on a deal in 6-18 months. You're also competing with Black Rock, Pimco, and all of the other big AM shops out there. Another negative aspect of the institutional side is you're not permitted to push 3rd party funds, strategies, etc. Only the funds and products within the bank.

With private client services, you end up spending a lot more time with clients, for better or worse. Some clients require a lot of attention and expect you to hold their hand through every decision. If you have a good team, this isn't as much of a problem and you can focus on bringing in new business and growing your book.

I will say that the institutional side appears to have better exit opportunities. I think Private client wealth management doesn't get the props it deserves on WSO. A lot of people assume all it entails is persuading unsophisticated individuals to buy shares of AT&T. In reality, if you're in the private bank of a BB, you're offering some pretty sophisticated solutions (structured products, currency swaps, pe and hedge funds) to corporate execs, hedge fund/pe managers, etc.

They both have good and bad, put the private client side is often more of a long term career choice. The majority of analysts aspire to stay in that industry and one day have their own book.

 

In my very humble opinion, I beg to differ with you on every single point.

1) Are you afraid of competition because BlackRock/PIMCO/etc. play in this space too? Please, get used to it in this industry if you want to survive. Hiding away by going to supposedly less areas of competition and dealing with less sophisticated investors does not sound like a winning strategy to me. The only way you ever become first-rate is if you bust your ass trying first.

2) "expect you to hold their hand"--as an analyst, you WILL be doing that, and it will take a while before you are that guy who orders analysts around to make the analysis to assuage clients. I don't know about you, but talking to stupid people all day long would drive me insane.

3) Some of the more advanced products you are pitching in IS can involve third-party funds thrown into a dizzying array of vehicles, so this should not be a point of argument. It depends on how good you are at pitching products. If you do not show an interest in learning about those products, you will never be able to pitch them to institutional clients.

4) If talking to very successful people intrigues you rather than people with gigantic ass sum of money, then go for it. I personally would much rather learn how to generate returns and alpha than pitching a product I had no hand in creating.

5) PB/PWM whatever has a bunch of people that want to lateral out too.

 

'Want to lateral out' - your English is appalling, dear boy. No PB career for you on my team if you verb your nouns and adjectives like this.

A lot of people start in institutional, move to HFs and family offices before running private clients in their early 40s. I know no one managing money in their 50s who doesn't own their own company....or they move into CSM. 'Most analysts are 'teenage scribblers''- I remember being shocked by that but 10 years later, I would have to agree. See Tony Shiret at CSFB. Most people aren't as lucky as him to find the 'smoking gun' email that wins him a payout!

 

Easy man. I'm simply writing about what I've observed as a lowly intern. Of course the analyst is going to be the one doing client servicing BS. I don't expect to walk in and be the biggest swingin' dick in the office bringing in new business. Getting to that point takes a hell of a lot of effort and time. I realize that.

The point I was making about competing against PIMCO and Blackrock is its a tough fucking industry. I agree with your point about what it takes to be first-rate. And as far as third party funds go, the institutional side of the BB I'm with cannot push third party anything. Institutional salesmen at my bank also don't have a hand in creating any of the products they're pitching....that's left to the real estate, equities, fixed income, alternative assets, etc,. group.

and by mentioning that "private client side is often more of a long term career choice" I meant that it's not as easy of a group to lateral out of (from what I've observed)....

 

As shorttheworld said, they are very different jobs. Each can be lucrative, but the day-to-day is going to be very different unless the RIA/PWM team puts their clients in individual securities and needs an equity research analyst to assist with this (@thebrofessor might be able to chime in here, seems like his team does this). RIAs come in all shapes and sizes and it really depends on their approach to managing client's money. In general, success in PWM comes from developing a nice book of clients, so its more of a sales role, but financial/analytical ability is still necessary. I'd imagine you know the opposite side of the spectrum, as you already worked at a fund, so i'll stop there

Array
 

Hahaha, sounds like you're more interested in actual investing anyways.

3rd party or no, gotta learn your own products--and there are plenty of products your bank offers that you probably have no clue about. Master those first before thirsting about pitching something new.

No worries man, just trying to thoughtfully deconstruct your argument. I personally am in more of an investing role in AM, and was trying to help you make an educated decision that didn't rely on potentially fallacious reasoning.

 

I can't comment on the lucrative-ness of PWM, but I do think that if you're in the right group and offered a front office role as an actual advisor or as the head of investment strategy, I can't imagine it being too shabby. However, you probably want to look into how you get paid and how sticky that money is. I'm coming from an institutional background and the money is a bit stickier, so in terms of how the economics work, I would give the win to institutional.

If I were to think about it, I would pick depending on the lifestyle you want and what you want to spend your time doing. RIAs and PWM is definitely a growing industry, though much of it is relationship management, being creative with taxes and using a more or less pre-packaged solution for most clients (aka they have a bench of managers that you create a portfolio out of). Plus you have to be out there looking for new money. On the other hand, you know what research looks like so I'd imagine it being more 'intellectually stimulating' though also probably more stressful. No need to hunt for clients unless you're on the distribution side, but research isn't for everyone. Seems like you've done a bit of both, so I guess you can agree or disagree on my assessment.

Everyone is throwing money into PWM, so it has the opportunity to become something interesting or fizzle out when it's oversaturated, while institutional money is always going to be there, the roles have been well defined, it's scalable, so you're more of a potential cog in a wheel. But I think it's reasonable to say that both pay out - when you're at way top (think CIO, Partner) at a big AM firm that's probably more lucrative than PWM, but if you're talking about your average employee, I think it probably ends up being somewhat comparable.

Just my two cents, hope it helps.

 

Velit sit occaecati optio molestiae maiores. Placeat cumque possimus et ut veritatis. Possimus et error incidunt ea. Voluptatem voluptas architecto modi explicabo et doloremque. Ut veritatis modi dolores adipisci et. Qui numquam provident reiciendis voluptas nobis.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (199) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Betsy Massar's picture
Betsy Massar
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Secyh62's picture
Secyh62
98.9
5
CompBanker's picture
CompBanker
98.9
6
kanon's picture
kanon
98.9
7
DrApeman's picture
DrApeman
98.9
8
GameTheory's picture
GameTheory
98.9
9
dosk17's picture
dosk17
98.9
10
Linda Abraham's picture
Linda Abraham
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”