Private Wealth Management/Private Banking Guide for Associates

Once and for all - Here is the best guidebook I can give you for PWM/PB at the Associate level. Enjoy and show me some love...

1.1 What is Private Wealth Management?
1.2 Who is a High Net Worth Investor?
1.3 Industry Today
1.4 Career Paths within Private Wealth Management
1.5 How to Build a Book
1.6 Training and Placement
1.7 Incentive structure
2 Main Private Wealth Management Programs and Recruiters
2.1 JPMorgan
2.2 Goldman Sachs
2.3 Credit Suisse
3 Recruiting and Interview Process
4 Useful Resources and Interview Questions
4.1 Industry Research
4.2 Sample PWM Interview Questions

What is Private Wealth Management?

1.1
Private Wealth Management or Private Banking is the management of the assets of ultra high net worth (UHNW) and high net worth (HNW) individuals and families as well as small institutional investors (generally non-profits, endowments or foundations with less than $500M in AUM). It involves a close working relationship with clients having complex financial needs and an understanding of the various products available to create a portfolio which achieves the goals of a client. Understanding the client's risk and return goals are critical to success in this industry. Private Wealth Management representatives need to not only be relationship managers but also need to provide money management and advice. Investment Banks, independent asset management firms and third party consultants are very involved in Private Wealth Management. High-net-worth investors often use the institutions that manage their assets for other financial services, such as banking services (mortgages), estate planning, trust services, legal or tax work.

High Net worth investors

1.2
A HNW investor is generally classified as an individual with minimum investable assets of $5 million while a UHNW investor is generally classified as an individual with minimum investable assets of $10 million. These investors are typically taxable (like mutual funds but unlike institutional investors), but their portfolio accounts are managed separately (unlike mutual funds, but similar to institutions). There are several other categories of clients below the HNW and UHNW range. The cut-off for each category differs depending on the bank. The banks that recruit at Bschools for Associate positions tend to recruit for positions within the HNW and UHNW division of the bank.

Wealth Management Industry overview

1.3
With uncertainty over looming financial regulations, unease about the economic future of the European Union, and questions about China's ability to fuel the world economy, American corporations have decreased capital expenditures and deal-flow at Investment Banks has decreased. Private Wealth Management has provided Investment Banks with a stable revenue source despite the recent economic downturn. Career opportunities in Private Wealth Management have been relatively unaffected despite these cyclical headwinds. New Associate hiring within PWM has remained strong even as Investment Banking and Securities (S&T) Division recruiting has intensified. Over the past five years, the tremendous volatility in the markets has highlighted the need for professional wealth managers. HNW and UHNW clients continue to demand investment advisors who can protect and grow their wealth during such uncertain times. New Private Wealth Associates embark into a highly competitive and segmented market. Estimates of the number of households in the United States with investable assets of at least $10M stand at approximately 40,000households. Despite the finite number of UHNW prospects within the US, no single investment bank has been able to generate more than 5% market share.

Private Wealth Management Career paths

1.4
Culture-wise, Private Wealth Management attracts a spirited, entrepreneurial group of people. MBAs generally enter as Associates. They are given a salary and training but are expected to create a "book" of clients very early (traditionally, the cut-off was two years, but the timeline has expanded given the difficult economic environment over the past five years). Once they are established, the salary gives way to a commission structure which can be very lucrative. Account and product managers manage client relationships and distribute the investment products to wealthy individuals.

Account management/Sales associates assist in creating portfolio review presentations and developing promotional presentations for potential new clients. They are also in charge of managing and servicing existing clients. Sales associates can pitch directly to wealthy individuals or to investment consultant firms that help the client decide which investment manager to choose.

Product management/Product specialist associates serve as a liaison between the portfolio manager/investments team, account manager and client. They typically have a greater in depth knowledge of the particular product's (i.e., stock mutual fund, mortgage) strategy and investment focus.

Product associates often seek new assets to put into their fund and have a strong understanding of the fund's investment performance as well as external markets.

How to Build a Book

1.5
As a sales associate in Private Wealth Management, phone calls and networking are critical. Sales associates are constantly trying to determine ways to get in front of "the money" (potential clients). In order to find leads and ultimately build a book, sales associates use the following strategies.
Keep abreast of market news. Many news articles in the markets discuss liquidity events such as when a company merges, sells a stake of its business, goes public, or when management sells stock in the company. Each of these events lead to company executives with newfound wealth that would need to be invested. Sales associates will typically reach out to these executives.
Follow up with leads from other areas within the investment bank. The advantage of being part of a large investment bank is the referral business that is generated. corporate finance bankers represent management teams selling stock in public offerings, or selling stock in mergers. These bankers can introduce the company executives to Private Wealth Management representatives. These representatives can also refer their clients to the corporate finance bankers for their investment banking and capital markets needs.
Building your networks with key intermediaries. Intermediaries that tend to have relationships with UHNW prospects include:
Accountants, Middle-market M&A bankers, and Lawyers (Trust and Estate, Divorce, M&A, etc).
Tapping into your networks. Introduction to potential clients by friends, family or former classmates is a useful source of leads.

Wealth Management Education, training, and placement

1.6
Extensive training is required in the first six months of joining the firm because Private Wealth Management representatives need to have a broad based knowledge of the market, equities, bonds, and derivative products. Training also includes cold call simulations, client meeting case studies and classroom learning. Once training is complete, a new associate will join a team with one or two experienced Private Wealth Management representatives. The process of matching a new associate onto a team is driven largely by personality and fit. On this team, the associate will gain experience managing client relationships and bringing in new business.

Incentive structure

1.7
Associates straight out of business school earn the typical Wall Street firm salary ($100,000 plus a $30,000-$50,000 signing bonus and, possibly, a $10,000 relocation bonus). They shift towards a commission based structure once their Assets Under Management generate enough fees that they would be making the equivalent on commission as they do under the salary + bonus structure. Private Wealth Management firms charge clients a fee based on the percentage of assets under management. A typical fee could range from 50-150 Basis Points, depending upon in which products the clients are invested.
This fee increases as the value of the assets increases, thereby motivating the money managers to generate solid returns on the
portfolio.

Not all investment banks operate under the commission model. JP Morgan's Private Bank compensates all of its employees under the salary + bonus model. JPM believes that this model incentivizes teamwork among all members of the office. The average compensation is somewhere around $500,000 for a Private Wealth Management representative working for a Wall Street firm and it takes an average of five or six years to reach that level.

Main Private Wealth Management Programs and Recruiters

JP Morgan Wealth management

2.1
The JPMorgan Private Bank provides a broad array of sophisticated and innovative services to ultra high-net-worth individuals in 36 countries around the world. JPMorgan divides the Private Wealth Management role into relationship managers and portfolio managers. This means that some representatives solely manage the portfolios of the various accounts, and are even paid a straight salary and bonus, depending on returns, while other representatives work on building and maintaining client relations.

JPMorgan Private Bank Summer Associates are offered the opportunity to work as fundamental members of an integrated business team for ten weeks over the summer. During their time in the program, Summer Associates participate in training classes, senior speaker series, market discussions and networking opportunities; all of which are geared to provide extensive exposure to the multiple aspects of the firm. Summer Associates work with a dedicated program management group who provide guidance and feedback throughout the summer. The 10-week program starts with an intensive training in New York. Summer Associates then rotate through 2 teams for 4 weeks each. Roles and teams can vary and the Summer Associate's input is considered. The final week is reserved for presentations and final training. Placements are primarily available in New York and may be available in other major U.S. cities. There are also opportunities available in Switzerland, Asia and with the NY based Latin America team. Relevant language skills and cultural knowledge are essential for placement on Asia and Latin America teams. There are three primary roles within JPMorgan Private Bank's integrated team.

Banker:
A Banker focuses on new business acquisition and on maintaining existing client relationships. In addition, Bankers ensure that each client's needs are met across many spectrums such as banking, lending, trust and estate planning.

Global Investments Specialist:
A Global Investments Specialist (Investor) leads the investment dialogue with clients, and ensures that the proper investment plan is created and executed. In addition, the Global Investments Specialist executes trades across all major asset classes.

Global Product Specialist:
A Global Product Specialist creates innovative and cutting-edge investment solutions to implement the Private Bank Strategy Team's
recommendations. In addition, the Global Product Specialist partners with the institutional traders to provide seamless execution for all investment offerings. A Global Product Specialist develops expertise in specific areas such as: alternative investments, foreign exchange, fixed income, equity solutions and due diligence.

Goldman Sachs Wealth Management

2.2
Job Location: Three weeks in New York and seven weeks in a Regional Office. Office locations include Atlanta, Boston, Chicago,
Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle and Washington DC.
Job description: Goldman's Investment Management Division is broken down into GSAM (Goldman Sachs Asset Management) and Private Wealth Management. Private Wealth Advisors are dispersed across 12 regional offices around the country. This work entails serving as a holistic wealth advisor to clients with at least $10M in investible assets, covering everything from asset allocation and investing to trust and estate planning, tax implications of various investments, lending, and philanthropic advisory. This job requires a long-term commitment given that it takes time to grow your business from scratch.

Summer Description: While Private Wealth Management is primarily a sales job, particularly starting out, the summer program focuses heavily on Goldman's investment platform and training summer interns on all investment vehicles including internal strategic investment strategies, equity, fixed income and cash products as well as alternative investments. As such, it's a very structured summer with much class room training, particularly during the three weeks in New York. Summer associates will gain exposure to the sales process by going through sales training, interacting with current clients, working on prospecting exercises and working on a business plan that entails "principles of commercial success." Another significant portion of the summer includes staying abreast of latest events in fixed income, equity, option instruments, hedge funds, and private equity funds. Finally, networking is key to success both in this business and during the summer experience. Get to know as many people during the summer as possible.
Offer Specifics: Summer Associates receive end of NYC, mid-Summer and end-of-Summer official reviews. Interns receive office-specific offers, but not to a particular PWM team, around Labor day.

Credit Suisse Wealth Management

2.3
Private Banking Associates become experts in a comprehensive range of investments, including domestic and international equity and fixed income securities, derivatives, restricted stock and direct private investments. Working in a team or on their own
Relationship Managers advise high net worth clients on the optimal asset allocation designed to protect and grow their wealth. The
role pairs the relationship and account management roles. There are two components to the training within Private Banking: A formal training and development program designed and delivered by some of the most skilled professionals in the financial service industry as well as Credit Suisse Relationship Managers and product specialists. Associates also prepare for and take Series 7 and 66 exams.
The Private Banking Training Program aims to prepare associates to become a successful RM (Advisor) and to successfully perform on
the job. Associates are provided with an in-depth overview of the products and services provided by Private Banking and acquire the skills needed to launch and manage their own business and develop and maintain strong internal and external relationships. Associates are assigned a mentor to help them through the program and support them with their integration. A rigorous performance management process ensures that associates are clear on their objectives and development points on a regular basis throughout the program.
Positions at Credit Suisse are available in Atlanta, Boston, Baltimore, Chicago,
Dallas, Los Angeles, Miami, New York, Philadelphia, and San Francisco.

Private Wealth Management interview and Recruiting

3
Companies hold firm-wide presentations at school. Students are highly encouraged to attend and meet Private Wealth Management representatives at these events. The recruiting style varies from bank to bank and it is important to build contacts and follow up with them. Some banks have invited students for dinners while other banks like JPMorgan, Goldman Sachs and Credit Suisse have invited students to New York for a "Day on the job".
The interview process typically begins on campus, with a subset of those interviewed on campus being asked to return to the company's office for subsequent rounds. For summer positions there are typically two rounds before a decision is made.

Useful Resources and Interview Questions

Industry Research

4.1
In order to learn more about the financial markets, which is necessary to succeed in Private Wealth Management, students can use the following resources:

Periodicals:
Business Week, CNN Financial Network, The Economist, The Wall Street Journal, Investment Advisor, Investor's Business Daily.

Websites:
Bloomberg, FT.com, Money.cnn, Investorlinks.com, MarketWatch,
MoneyCentral.nbc, Yahoo

Interview Questions Wealth Management

4.2
1. Tell me about yourself.
2. Why PWM? Why do you want this job? What have you done to get here? Whydo you know this is the job for you? What else are you considering job-wise?
3. Why our firm? Who have you talked to at each firm?
4. How would you go about getting clients and building your business?
Broader market questions:
1. Where is the Federal Funds Rate right now? When is the next fed meeting?
What do you think they will do?
2. Where do you think the dollar going? How does a weak dollar affect the economy?
3. What is the price of a barrel of oil? What's your view on oil prices? Where do you think the price of oil will be in one year? Would you go long or short on oil? How do you think OPEC will react to the current oil situation?
4. What are your thoughts on currencies? China?
5. What are your thoughts on the sub-prime crisis? How did it start? What are the repercussions?
6. What are your thoughts on the market right now? Where would you advise someone to invest right now?

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Comments (18)

Mar 16, 2013

Great post, thank you. I have been searching for a one-stop shop answer to my PWM questions.

I am also a veteran who is interested in a career in PWM out of business school. I think that PWM really appeals to me because of the "entrepreneurial" component of the job (basically building your own book of business and then being compensated in accordance with your work) as well as the opportunity to be in a "client-facing" role early on in one's career.

Besides reading up on the industry and doing interview prep, what else do you think someone seeking a PWM internship/full-time offer can do to prepare oneself? Would you recommend studying for the series 7 and 66 exams now, or is that best left to the formal training programs you write about?

"Don't measure yourself by what you have accomplished, but by what you should have accomplished with your ability."
-John Wooden


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Best Response
Mar 16, 2013

I don't think series 7 or 66 prep work or exam certifications would be the best use of your time. Once you start full time, the firm will have that built into the process and will pay for everything. CFA materials may be a better use of your time and your B-school classes are helpful for that. Although, most banks view CFA vs. MBA as an either or thing and do not require both. Certainly a good way to show your genuine interest in the industry, though.

If you have already done enough introspection to determine that you really ARE into PWM/PB, the best thing to do is to get smart on the major macro issues (Tax portion of Fiscal cliff resolution, sequestration, QE3, Operation Twist, Global outlook by region). During my interview process, I got the question "What do you think our clients are most concerned about right now?" You want to become conversant about the major, top of the mind issues of the day.
You will get the finance basics during B-school and during the firm's training program, so most Investment banks don't grill candidates on their hardcore finance skills. They are looking for someone with the aptitude to learn who has a naturally high EQ who can adjust their communication style depending on what the client wants. For some clients/prospect, you'll need to distill difficult concepts into the simplest key components. Other folks may want to get super deep into portfolio theory and macroeconomics, so you should be able to go there when you need it.

I really enjoyed taking a behavioral finance class in school. Pretty applicable to PWM/PB because a big part of the job is about recognizing and countering the psychological biases that lead to investment mistakes. Negotiations is another great class.

    • 2
Mar 17, 2013

what're some options for analysts in smaller markets at JPM/GS after their analyst stints? is it likely to transition to an associate role in a bigger city? how about to more technical or portfolio management functions?

Mar 17, 2013

Wasn't an analyst, but you could definitely transition into an associate role in a bigger city. Your contacts are going to be with the folks in your regional office, so they will have to be endorsing your performance to the management of the larger city office. I think the key to ensure that you have flexibility as an analyst in PWM is exceptional job performance and continual networking outside of your division.

Jun 12, 2013

appreciate the writeup. definitely cleared things up a bit for me.

    • 1
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Jun 12, 2013

Currently interning at one of the three mentioned in the post and I agree 100% with what was said.
It is really appealing to those who want to be their own boss, and if you bring in money, you make a LOT.
Also its not all glamorous, beginning to build your book is literally making 50-100 cold calls a day and maybe getting 5 out of 1000 to roll over. Usually takes 1.5 years from initial contact to land a client. However, there's a waterfall effect, so the more clients you get the more they tell their friends, making it easier to get even more clients.

Jun 14, 2013

50 to 100 a day? haha...up that number a bit

Dec 19, 2013

50 to 100 calls a day seems very manageable after reading about all of the people in GWM making 300-400 calls a day.

Dec 24, 2013

Trainees in this business get way too caught up on the quantity of phone calls and this is almost a meaningless activity unless you are calling qualified prospects. 50 to 100 calls per day to well qualfied prospects is all you need.

    • 1
Dec 24, 2013

That's very true, but qualifying is half the battle. How do you obtain a list of qualified prospects other than personal network?

Dec 25, 2013

There are several ways but one of the easiest is to purchase (or create through linkedin) a corporate directory of a large, local company and have it filtered to include VP or Director level and up. Although not guaranteed (I know many director level executives that make lots of money but blow it all and essentially have no net worth) these types of prospects typically have some money. The more familiar you are with that company's benefits (401K,, stock options, etc) the more effective you will be on the phone, Also once you obtain clients within that company you will be able to generate new clients through referrals.

    • 1
Jan 15, 2015

OP, can you share some insight on what a 'Portfolio Administrator' might do and how that could provide some foundation within PWM.

Jan 15, 2015

Description for aforementioned role: The incumbent provides support to Senior Portfolio Officers with responsibility for management of assigned client relationships. These may include personal trusts, agency, estate, charitable, pension and institutional accounts which are most sensitive and will be characterized by a large revocable (or terminable) component. The incumbent will review accounts to ensure the account is administered in accordance with the governing instrument and accepted fiduciary principles.

Jan 16, 2015

Thanks a lot! Do you know if all these firms's research scope also includes some emerging markets coverage? Or they tend to focus the advise based on their client's location?

Feb 10, 2016

Thank you for this, wish I had found it before failing my interview... I'll definitely save it for the next time.

Feb 13, 2016

Great post! Couldn't have said better myself being in the industry for almost 3 years.

Aug 30, 2017

Great post, thank you very much, gave me a clear view of the industry.
Do you believe there are any possible career switch from PWM to PE for instance?

Sep 10, 2018

got milk bro?