Wealth Management

IB2PWM's picture
Rank: Monkey | 38

I've been in IB for a couple of years, and got an offer from a private wealth management firm. What do you think about the PWM industry? It basically is being a Broker/Financial Advisor for super rich people. The salary is shitty (and only lasts first two years), but the payout is really good.

Anyone here looked into the PWM side?

Comments (144)

Oct 11, 2006

Here's the sample pay structure.

[Assumption]
- Salary : $60,000 (only first 18-24 months)
- Payout : 35% of the revenue (between 25-45% depending the firm)
- Asset under Mgmt.: $100 million
- Fees : 0.50%

-> $60k + ($100m * 0.5% * 35%) = $60k + $175k = $235k

From what I've seen, the guys who are good makes millions, and the ones who suck at it leaves within two years. Average PWM guys who are faily good have between $250m-300m under management. I've seen guys managing $1bn+.

Oct 11, 2006
IB2PWM:

- Payout : 35% of the revenue (between 25-45% depending the firm)

As you stated in point # 2, what do you mean by pay out. I'm just trying to understand how their salaries are sturctured.

Oct 11, 2006

Shouldn't people start out somewhere like Edward Jones and deal with low scale ass people to build up confidence and then move up into PWM?

Oct 11, 2006
ZiggyMon:
IB2PWM:

- Payout : 35% of the revenue (between 25-45% depending the firm)

As you stated in point # 2, what do you mean by pay out. I'm just trying to understand how their salaries are sturctured.

Payout would be the commission. 35% payout would be basically 35% cut of the fees the firm brings in. If the firm brings in $1m in fees from a client, the rep will keep $350k as his fees. Most of these firms, the "salaries" are really not there (unless you join as analysts or sales/marketing associates).

By the way, in the PWM industry, "associates" are secretaries or other supporting staffs (mostly in sales/marketing). Unlike IB where "associates" are higher than "analysts", in PWM, associates are same level or below than "analysts".

Typically, the top 5 firms would pay very low salaries (before the commissions/payouts) to encourage the brokers to produce. Typically the salaries last only the first 18-24 months, and are typically less than $60k. But most of the brokers make the big bucks from the fees. If the broker is recruited by other firms, they typically pay huge upfront buyout pay (which can go into millions).

If you are looking into the industry for non-broker position - such as a portfolio analyst, etc. - in a PWM industry, a typical pay (post-MBA) would be between $115k-$250k depending on your background. The bonus depends on how the team does.

Wasting Time:

Shouldn't people start out somewhere like Edward Jones and deal with low scale ass people to build up confidence and then move up into PWM?

The PWM industry is very different than the "retail" industry (Ed Jones, Charles Schwab, etc.) Most retail industry services its clients (from average Joe's to "rich" individuals) in retirement and simple small investments (mutual funds, etc.)

The PWM firms typically target $10m+ individuals and families, but the minimum target varies between firms. There are different categories of target clients, and they are,

  • UHNWI (Ultra High Net-Worth Individual) : $30m+ in net-worth
  • HNWI (High Net-Worth Individual) : $5m-30m in net-worth
  • Wealthy Individual : $1m-5m in net-worth

Most retails would target $5m or less and the PWMs would target HNWIs and UHNWIs. But there sometimes are UHNWIs and HNWIs using retail brokers for various reasons.

The business model of PWM firms is, offering institutional-level services to individuals and families. Also when UHNWIs and HNWIs use retail brokers, their investment options may be limited. For example, a person who is worth $100m who is looking into investing in a large PE fund (such as KKR or Blackstone), would have to use a PWM firm, since if he uses a broker at a retail office, his broker may not have existing relationships with such large firms.

Also typically, when a broker is successful at a retail-level, he/she would not leave the retail-level, since their existing retail businesses won't be able to move to PWM with him (for example, a retail broker's $500k client won't be able to move his account to a PWM firm).

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Oct 11, 2006

What does it take to become good at PWM? Do you have to be a really good salesperson? Is PWM easier or harder to get into compared to investment banking (lets say for DB)?

Oct 11, 2006
Wasting Time:

What does it take to become good at PWM? Do you have to be a really good salesperson? Is PWM easier or harder to get into compared to investment banking (lets say for DB)?

I think the combinations of 1) social skills, 2) sales skills, 3) investment knowledge makes someone good at PWM. I think it is easier to get into compare to IB, but most top-tier PWM firms rarely hire people with no previous investment-related jobs.

What do you mean by DB? Deutsche Bank?

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Oct 12, 2006

Yeah Deutsche Bank.

I have good social skills but sales skills I have no idea.

Oct 12, 2006

Are you pre-MBA? If you are fresh out of undergrad, it would be nearly impossible to join PWM as a broker.

There are three ways to do this.

1) Start as an analyst and move up
2) Start in retail and move up (not really ideal, since you'll give up your old clients)
3) Do other things first (IB, PE, Consulting, etc.) then make the move.

Also at most top-tier PWM firms, the analyst positions are post-MBA positions. If you are pre-MBA wanting to do the analyst route, look into second-tier firms, too. In PWM, the top tier firms are, JP Morgan Private Bank, Morgan Stanley PWM and Northern Trust (Please note that the PWM, trust services, and private banking are VERY similar in nature, but somewhat different).

There are 21 firms in the industry - Bank of America Private Bank, Bank of New York Private Client Services, Bessemer Trust Company, Charles Schwab, Citigroup Private Bank, Credit Suisse First Boston Private Client, Deutsche Bank Alex, Brown, Deutsche Bank Private Wealth Management, Fidelity Investments, Goldman Sachs, HSBC Private Bank, JP Morgan Private Client Services, Lehman Brothers, Mellon Financial Corporation, Merrill Lynch, Morgan Stanley Private Wealth Management, National City Private Client Group, Neuberger Berman, Northern Trust, PNC Advisors, Smith Barney, SunTrust Banks, U.S. Bank Private Client Group, U.S. Trust, UBS Wealth Management, Wachovia,and Wells Fargo Private Client Services.

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Oct 12, 2006

What are the 2nd tier firms? Is Business Admin/Finance a good degree for PWM? Out of the 21 firms in the industry, the ones I like from that list are... BoA, Citi, Deutsche PWM, and GS. Is it hard to get a job at these firms even though they are not top tier?

Oct 12, 2006

I guess the top-tier firms are,

Bessemer Trust Company, Citigroup Private Bank, Deutsche Bank Private Wealth Management, Goldman Sachs, JP Morgan Private Client Services and JP Morgan Private Bank, Lehman Brothers, Merrill Lynch, Morgan Stanley Private Wealth Management, Northern Trust, Smith Barney PWM, UBS Wealth Management,

I guess the second-tier firms are,

Bank of America Private Bank, Bank of New York Private Client Services, Charles Schwab, Fidelity Investments, HSBC Private Bank, Mellon Financial Corporation, National City Private Client Group, Neuberger Berman, PNC Advisors, SunTrust Banks, U.S. Bank Private Client Group, U.S. Trust, Wachovia,and Wells Fargo Private Client Services.

It's just my opinion. Also some of these firms are retail-type PWM, and others are insitutional-type PWMs. Also some offer propreitery products and some are more open. You just need to meet as many as possible to differentiate the differences (sames goes to the clients... most clients can't really tell the difference in the services so the firm's name and existing connection/relationships drive business more than anything else).

Also you listed GS as a second-tier in your message. GS defintely is top-tier is one of the hardest to join. I think GS and JPM are most picky in this industry.

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Oct 14, 2006

I am thinking about if I want to do PWM or IB after I graduate. I interned with a top tier retail broker and so basically understand how that part of the industry works. I think that it is possible to start out as a broker from undergrad but since you still "look young" it is hard to convicne people to let you manage their money.

I think you can start as an analyst out of undergrad and a broker from an MBA program?

Any idea what an analyst salary would be from undergrad compared to ibanking from undergrad, and the bonus?

Also what about the hours, how do they compare?

How many years after being an analyst do you think you could get promoted to a broker and start brining in your own clients?

Oct 18, 2006

Retail brokerage is easy to get into, but most PWM firms/offices are quite picky. PWMs typically require MBAs or 3-5 years in solid experience in retail-level.

For FAs, your base pay would be about $60k for someone who's starting up (can be substantially more if you are recruited from other firm), and 25%-45% commission plus bonus (new FAs get bonuses for good performance).

The pay for the pre-MBA analysts is typically $50k-80k plus bonus, and post-MBAs do $100k+ plus bonus. The bonuses are typically related to the team's performance.

Apr 23, 2007

Are those comp figures standard across the PWM industry?

Apr 23, 2007

You want to manage people's personal stuff? Help them figure out how to finance a new yacht?

Dec 28, 2007

I'm guessing the PWM analyst salary is much closer to the $40-50k range.

Dec 28, 2007

uh, I'm assuming that the idea was for you to say why you wanted to do that as a job, not why you think the industry is an important one.

Dec 28, 2007

Somebody has goldman's miami private wealth mgt superday on friday...

Dec 28, 2007

yes I do. I'm happy, after getting interviewed and dinged at JPMorgan for their Honors Program any opportunity is a good one.

what about u Khameer?

Dec 28, 2007

Sure you can paint a rosy picture of how the world's wealth rests on the advisers. In terms of working there, it's a different story. Had a friend who went into PWM some years ago. Tells me that PWM is a good industry to get in only if you are ready to live your life as a salesman - everyday! These brokers make cold calls and pay for extravagant lunches (out of their own pockets) all day long. Their P&L consists of them, their analysts and assistants. usually teams of 3-5

In the end they make good money - start off in the $60k area and the highest producers in most Street firms rake in about $3-5MM a year (yes, there are outliers as well!)- takes a whole lifetime to get to that point.

the bottom line of their business model is this "I want YOUR money" period.

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Dec 28, 2007
kreatif:

Sure you can paint a rosy picture of how the world's wealth rests on the advisers. In terms of working there, it's a different story. Had a friend who went into PWM some years ago. Tells me that PWM is a good industry to get in only if you are ready to live your life as a salesman - everyday! These brokers make cold calls and pay for extravagant lunches (out of their own pockets) all day long. Their P&L consists of them, their analysts and assistants. usually teams of 3-5

In the end they make good money - start off in the $60k area and the highest producers in most Street firms rake in about $3-5MM a year (yes, there are outliers as well!)- takes a whole lifetime to get to that point.

the bottom line of their business model is this "I want YOUR money" period.

Couldn't be more right. - A guy in the industry

Dec 28, 2007

If no reply ring them.

Dec 28, 2007
hnazary:

Do you guys recommend me just calling them and acquiring them?

Yes, please just take out a loan and proceed to acquire these companies.

Dec 28, 2007
Sean Click:
hnazary:

Do you guys recommend me just calling them and acquiring them?

Yes, please just take out a loan and proceed to acquire these companies.

funny !!

Dec 28, 2007

Oops, sorry. I meant to say, "Do you guys recommend me just calling them and asking about it." Sorry, it was 2:30 in the morning and I was studying for a German test.

Should I tell the companies I am willing to be an unpaid intern when I ring them up? Also, should I just e-mail or mail them my resume along with a cover letter. Or is it best to just call every single wealth management company in Dallas?

Dec 28, 2007

If you call then all that will answer is a secretary...calling is useless unless you have an "in"

Ask your parents and all of your friends parents who they use to manage their investments. Then inform them that you are looking to get into the bus and ask if they can persoinally email your resume or if you can call or meet with them concerning an "informational interview." Hopefully this will lead to him hooking you up.

That simple.

Dec 28, 2007

Agree with above, just try to use people you know. Everyone has SOMEONE managing their money, just find out who it is and if they need someone. What year are you?

If you are a freshman you may have to work for free, but only do it for like 3 days/wk if you aren't getting paid. Having that name on your resume will probably help you get something paid for soph summer.

Dec 28, 2007

I am a sophomore. I don't mind being a paid or unpaid. Just as long as I can add something to my resume with finance-related work.

Dec 28, 2007

I dont see to many small Dallas shops turning down free work.

Dec 28, 2007

I began calling some places. I called one place who transferred my call to the MD, I got rejected. She said, "No, not at this time." Then it was getting late so I stopped calling places.
I wish my dad had a better relationship with my next door neighbor because he works for Smith Barney.

Dec 28, 2007

Dont be a puss! Its your neighbor too. Just drop by and ask. The worst that could happen is that he says no! I am willing to bet that since he is your neighbor, even if he cannot accept you, he will help you in other avenues.

If you really want this then you need to step up your game. One phone call...done. Then you wish your dad could help you? Come on buddy...are you for real?

Dec 28, 2007

GROW A PAIR!

Dec 28, 2007

Private Wealth Management (PWM) is the term generally used to describe highly customized and sophisticated investment management and financial planning services delivered to high net worth investors. Generally, this includes advice on the use of trusts and other estate planning vehicles, business succession or stock option planning, and the use of hedging derivatives for large blocks of stock.

The CFA Institute curriculum on "Private Wealth Management" indicates that there are two primary factors that distinguish the issues facing individual investors from those of institutions. Firstly, time horizons are different. Individuals face a finite life as compared to the potentially infinite life of institutions. This fact requires strategies for transferring assets at the end of an individualaEU(tm)s life. These transfers are subject to laws and regulations that vary from locality to locality and therefore the strategies available to address this situation vary. A second factor contributing to different portfolio management strategies for individuals and institutions is the fact that individuals are more likely to face a variety of taxes on investment returns that vary from locality to locality. Portfolio management techniques that provide individuals with after tax returns that meet their objectives are necessarily going to be specific to these tax structures.

The term was first used by the elite retail (or "Private Client") divisions of firms such Goldman Sachs or Morgan Stanley (before the Dean Witter merger), to distinguish themselves from mass market offerings, but since has spread throughout the financial services industry. Certain larger firms(UBS, Morgan Stanley and Merrill Lynch) have "tiered" their platforms - with separate branch systems and advisor training programs, distinguishing Private Wealth Management from "Wealth Management", with the latter term used to describe the same type of services, but with a lower degree of customization and delivered to mass affluent clients. At Morgan Stanley, "Private Wealth Management" is the retail division focused on serving clients with greater than $10 million in investment assets, while "Global Wealth Management" focuses on accounts smaller than $10 million.

Dec 28, 2007

The general public has become extremely risk averse and you can't expect returns of most asset classes to be attractive for a while. I think the brokerage business is relevant right now because it's the only thing with money even if they're losing it as fast as they can. The frenzy in PWM has more to do with demand-side deficiencies.
PWM won't generate revenue outside of management fees as long as the crisis lasts, and when the economy finally recovers, I suspect high finance will still be the favorite destination for top business graduates.

Dec 28, 2007

A lot of PWM and retail brokers will be on the streets over the next 6 months amidst the consolidation, which presents opportunities for top brokers/advisors to start their own small shops since customers are loyal to the broker not their firm ( generally speaking)

Dec 28, 2007

PWM guys wont be on the street b/c pwm isnt going anywhere... that said it will never be a "hot" sector.

No matter where the market is going or if deals are getting done by banks or not, wealthy people still have a lot of money that needs to be managed. I think it is a focus now b/c as everything else dries up, its one of the few things still bringing in good fees for these banks so its getting more attention temporarily. They market the clients with "hey, if you didn't have us telling you to diversify you could have been down twice as much as the 12% you were last year..."

Dec 28, 2007

Get ready to starve for a long time while you establish your book. The benefits are you get paid more, but unless you are a sales jesus you would be better off being the junior guy.

Dec 28, 2007

Get ready to starve for a long time while you establish your book. The benefits are you get paid more, but unless you are a sales jesus you would be better off being the junior guy.

^^^ Extremely true.

Dec 28, 2007

no exit ops

Dec 28, 2007

Go for it

Dec 28, 2007

pwm not so bad. Did a year there before transferring internally to a much better role. So yes, there are exit ops, in the right size bank. Not in BB--- so if you did a few years at MSSB then went to a smaller WM shop, you could make some good money by the time you are 26+

That said, you have to run with the right crowds, especially in NYC, to grow your book substantially.

Dec 28, 2007

What was your better role, if you don't mind me asking. Also, why would I make more transferring out? Thanks for the reply!

Dec 28, 2007

BuySide Research Analyst

I can only speak from buyside experience here. In PWM, out of college you may get low-balled and then inched up (10-15% annual raise on good performance.) So, after 4/5 years experience you stand to transfer from a 60-70k base role to a more market-level 80k role, for someone with 5ys experience in a non-IBD role. Of course you have to roll into the equation growth opportunities. It it looks like you stand a chance at making partner at your shop one day, then it would be pretty dumb to throw that away for an extra 10/20k a year, eh!?

Dec 28, 2007

lol @Anonymous MonkeyPWM pays just as well on the junior level while the lifestyle is better." Base may be the same, but total comp far from it.

PWM is a dead-end job unless you want to take a long road to become a financial advisor. Knowledge is basically the same as taking a financial investing class at school + reading about the market. I've done a few PWM internships and I feel very very bad for the analysts there. Frankly, the job sucks

Dec 28, 2007

Lol @ LookingForHelp --Did you ever think that the job of a successful investment advisor differs from a summer internship?

At OP - This site started as an IB website --but has branched out recently. There will always be more IB talk than anything else on here

PWM can be a very lucrative job if you are good at what you do. You can't just be a good salesman either, as some on here would argue. You must know the markets inside and out and understand the valuation of all kinds of investments. The lifestyle is 10x better than any other job in finance because you can become your own boss. Little traveling, lots of free time, you set your own hours.

The downside is the first 5 years. You have to work your ass off get clients. Think about it --What 50 year old man wants a 23 year old managing his millions? There is a very high failure rate for this reason --people either aren't good investors, can't schmooze, or get too frustrated at a lack of quick money.

However, the skills for PWM are very different from IB. Extremely tough to transfer from PWM to IB.

Also, MBA is definitely not a requisite for PWM. Why would you get an MBA if you have already started your own book of clients?
However, if you want to exit --you probably will have to get an MBA

Dec 28, 2007

Lol @ Shmoozer, yes I have actually. Not sure if you read the latter half of my response "unless you want to take a long road to become a financial advisor."

I'm pretty sure the OP was mentioning the position for a JUNIOR role AT A BB. You can't build a book of clients straight out of undergrad, especially at a BB in PWM. You work as an assistant to the advisor for a while (@ GS as a "Financial Analyst") which is straight up processing trades, supporting whatever the advisor needs, and doing bitch work.

Dec 28, 2007

not a good place to start man...other experiences will be more broadening. it's tough to break into, but if you can accumulate a book of biz, it's becomes a pretty sick annuity though. kind of like being a swap or futures broker.

Dec 28, 2007

Thanks for the feedback everyone.

Should've probably clarified this right away but my original post was meant for the PWM Analyst program only. I wasn't talking about doing PWM for 10 years, building a book of business or becoming an independent Financial Advisor. Am primarily just curious about your thoughts on doing PWM for a few years after college for someone who wants to do something finance-related later on in life but not sure exactly what. Specifically, the pros/cons of doing PWM as opposed to i-banking.

Thanks again!

Dec 28, 2007

Pros vs banking: Better lifestyle, and you'll probably like the people you work with more. You also might meet some interesting customers.

Cons: Will pay worse. Prob like a 50-100k a year sort of job as opposed to a 90-150k sort of job. Not sure how much that matters to you. You will be dealing with less sophisticated problems, and will have a less varied set of experience. Exit ops won't value your experience as highly.

PWM isn't a bad spot if you're into it, but it's much more a job you should go to as a lifer.

Dec 28, 2007
Jimbo:

Pros vs banking: Better lifestyle, and you'll probably like the people you work with more. You also might meet some interesting customers.

Cons: Will pay worse. Prob like a 50-100k a year sort of job as opposed to a 90-150k sort of job. Not sure how much that matters to you. You will be dealing with less sophisticated problems, and will have a less varied set of experience. Exit ops won't value your experience as highly.

PWM isn't a bad spot if you're into it, but it's much more a job you should go to as a lifer.

I have to disagree with you post, a friend of mine has been in PWM for 5 years now and is already making 300k+
it depends on how good of a sales man you are. You are paid on how big your book of business is.

Dec 28, 2007

Thanks Jimbo!

Unfortunately, I don't know many people in PWM. The few bankers I spoke to about PWM really hate on it and try to prove that on an analyst level, especially at a BB, the skills acquired in PWM are very limited and much less superior than those acquired in IB.

But then again, most analysts in IBD sit around cutting and pasting graphs and profiling companies all day, waiting to do a live deal where they can actually do a model. So that doesn't seem much more glamourous either.

For someone who's not certain about what to do after the analyst program and is just looking for something that will open up doors and give a breadth of skills, will going into PWM significantly limit my options?

Dec 28, 2007
8_di23:

But then again, most analysts in IBD sit around cutting and pasting graphs and profiling companies all day, waiting to do a live deal where they can actually do a model. So that doesn't seem much more glamourous either.

For someone who's not certain about what to do after the analyst program and is just looking for something that will open up doors and give a breadth of skills, will going into PWM significantly limit my options?

I'm sorry, but the first sentence doesn't even deserve a response.

As for the last sentence...the answer is a resounding yes, PWM is far from a good launching pad, because it does NOT open doors and it does NOT give a breadth of skills.

Dec 28, 2007

So, does this mean that if I want my job after undergrad to open up doors and give me flexibility in my long-term career moves within the field of finance, the only way to go is do i-banking?

Are there any other options?

Dec 28, 2007
8_di23:

So, does this mean that if I want my job after undergrad to open up doors and give me flexibility in my long-term career moves within the field of finance, the only way to go is do i-banking?

Are there any other options?

consulting

Dec 28, 2007
8_di23:

So, does this mean that if I want my job after undergrad to open up doors and give me flexibility in my long-term career moves within the field of finance, the only way to go is do i-banking?

Are there any other options?

Corp fin positions in top companies also place reasonably well and have good lifestyles and benefits. My SVP has an impressive resume including stints at GS/MS/etc. and he started at PepsiCo. Honestly, I could easily see myself leaving banking in the next three to five years to do strategic M&A, etc. in a similar setting.

Dec 28, 2007

I have several friends that are first year analysts for PE firms (im an intern for one) and we have all picked up a preatty solid backround. I made my start in PWM and unless your looking to learn basic modeling and risk managing tools (and knowledge in insurance) steer clear. the hours might be good, but I enjoyed doing 12 hours of work that was chllanging rather than 8 hours that was boring as hell.

Dec 28, 2007

Had a friend in ML pwm and he absolutely hated it and left after a few years. You don't do anything your first few years except support your team and you learn basically nothing.

Dec 28, 2007

if you are talking a bout exit opps, then PWM pales in comparison with IBD (and this includes b-school as well). if you do PWM, just be sure that's what you want to do long-term.

Dec 28, 2007

I have quite a few friends who work in PWM (in top firms) and absolutely love it. They get to meet clients and the workload is quite relaxed. The only problem is that often you'll meet people who are working there simply because of the clients that they have.

Dec 28, 2007

Do what you like and don't worry what people on an Internet forum say. PWM is essentially sales and relationship management. Your exit ops are going to be focused on those skills. If you can get a CFA and some experience you could move to a money management type role where your comp will be much bigger. I could see you making a move to Private Banking also. Inst sales can also be an option.

To the original little child who so actively shits on PWM, not everyone wants to be in IB. At the junior level your work is very tedious and you have very little interaction outside of the people you work with. If you love it then good, it was a right choice for you, but characterizing PWM as shit is moronic. Some people want to interact with clients, enjoy coming up with solutions or just dealing with people in general. Also, PWM is a good paying job which is more easily obtainable than a BB IB position.

Dec 28, 2007

How relatable are private banking, private wealth management, and venture capital to investment banking in terms of internships? I am choosing between internships next fall and am aiming for a summer investment banking internship next year.

Dec 28, 2007

how about doing pwm for 2-3 years and then get a good MBA and switch to IB?

Dec 28, 2007

Very tough to get into top MBA from just 2-3 years of pwm

Dec 28, 2007

so what do people who does pwm and hate it do afterwards?

Dec 28, 2007

Understand the fundamental differences in the market over the past couple of years, and more importantly how that's effected the psyche and willingness to invest of clients. Know what's going on from an Asset Management standpoint and global market performance. Know which firms acquired who.

Dec 28, 2007

From an equities point of view, I don't think this has necessarily had a serious impact on the industry, but there has been a shift in how money managers are being paid...

Since this part of the industry has transitioned from a commission based business to more of a fee based business over the past several years, there's more of an incentive for money managers to gather assets and focus on marketing, rather than focusing on trading individual accounts. Still, their performance has to be good, but for an honest money manager, times will be a bit tougher and there isn't as much of an incentive to maximize clients return.

On top of this, there's been a much greater push by firms for their money managers to diversify clients in "focus" accounts. Less individual stocks and bonds and more ETF's and insurance products, which can be good or bad. I'm more of an equities guy, and I would be disappointed if the firm I worked for pressed me to shy away from primarily putting my clients in equities (while using options for hedging), especially if this is what my clients prefer.

Edit: I would also add that some banks are separating wealth management from capital markets, cutting off money managers from internal notes that research analysts send around. This limits the money managers to the AM/PM research call and research notes + the research reports. I think this is probably an attempt to push the fee based system.

Dec 28, 2007

Yeah. My uncle used to work for a wealth management firm. I've look around google and gathered some info, so.

In PWM, depending on the firm, you can expect to make a lot lower then ibanking. Since I banking, you make your bonuses based off of the returns that you help companies get, in PWM, you don't get bonuses based on your selling. However, if you are at a small firm, I've seen people making 2 million a year.

Dec 28, 2007

^^^ Ehhh, not exactly.

If we are talking about how much people make at the analyst level, PWM/PB is actually pretty attractive based SOLEY on pay per hour. Your base will be comparable to an IB analyst, but your bonus will be less -- probably much less. However, IB analysts are going to be working 20-40% more hours than a PWM/PB analyst.

Now if you look at potential future earning, IB opens up a lot more doors, so an IB analyst earning trajectory is higher than a PWM/PB analyst.

Regarding how bonuses are based for senior level PWM/PB advisors, it depends on the firm and their model. If they have a brokerage/commission model, then it's eat what you kill. There is a very defined line between how many client assets (at what kind) you bring in (what you sell) to the firm and what you get paid. On the other hand, some firms have a salary + bonus model. The bonus will be based on bringing in new client assets and clients, but there is not a direct correlation between the two, as other factors come into play (how your office performed, how the PB division performed, etc).

Dec 28, 2007

PWM is all about relationship management more than anything else. Investment performance only plays a small role in PWM and I would say that only ~10% of clients actually truly nitpick and analyze their portfolio's performance. PWM can be a very lucrative career if you have the soft skills required to capture new assets. PWM can be a very solid and rewarding career. There are plenty of guys in their 40s who have nine or ten figure client books that work 30 hours a week and pull down $1MM+. There are also a lot of guys in their 40s at Edward Jones who make $50K/year. There are some very reputable PWM & PB shops like JPM, CS, and GS.

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Dec 28, 2007

A position where soft skills go a lot further than anything else. You can make a ton of money doing it but may not be for those who want an "intellectual" challenge.. If PWM is all you can swing right now then I would advise to do it while keeping irons in the fire re: looking for a gig that suits you.

Dec 28, 2007

On effectiveness of pwm internships. I think many in their fresh soph yr will use it as a way to improve res (bb name) in the hopes of passing the hr machine. A better option IMO would be unpaid boutique ib or unpaid hf. The latter will have zero prestige most likely (prestige is of utmost importance in life let's never forget) to SA recruiting (ESP bb hr who generally screens on name andnperceived prestige of name -e.g. Janitor at GS or ib at RJ) but will be more analytically sophisticated - generally. I'd say the risk some bb hr screens u out for interning at no name hf or boutique ib v bb pwm is low and attractive relative to the huge returns from becoming a quality SA candidate given the disproportionately superior experience available at the former.

Dec 28, 2007

Outside of recruiting context it is tough to say this job can be interesting to the majority of finance professionals - the asset mgmt industry at large is becoming massively disintermediated, and the trend for pwm pb guys is that while hnw guys are growing in number expectations are for institutional like methods. Given pwm guys primary concern is asset gathering their ability to skew sharpe in the general direction of hwn expectations is limited and not allowed by the overarching bb structure, which chooses to hire outside managers. If you love sales this isn't necessarily the place to do it either as the brand and open architecture is an increasingly larger value add than rm / sales which will compress payout to sales like roles

I work at a hf

Dec 28, 2007

For anybody trying to get finance experience, a PWM internship is great. Doesn't matter if you're fresh/soph or even a junior who just got interested in the finance world and needs some experience to create his story.

Dec 28, 2007

Thank you all for your responses! Having done a PWM internship as a Freshman, I agree with almost everything said. Still, there is SO much room for improvement in most PWM programs.

Dec 28, 2007

google search local firms and cold e-mail/call

Dec 28, 2007

google search local firms and cold e-mail/call

Dec 28, 2007

google search local firms and cold e-mail/call

Dec 28, 2007

Network, Network, Network.

Dec 28, 2007

did this program. overall it's a machine. you get out what you put into it. Use the opportunity to netowrk and learn about the business. Ask to sit in on PM pitches and meetings and just be a sponge. meet people and dont give a sht about the group project (nobody cares about it)

I say fuck change, I don't chase dimes

Dec 28, 2007

you cold call

    • 1
Dec 28, 2007

It depends whether the customer has a discretionary account or not...if discretionary, the WM rep can act in the "best interest" of the client.

I had a PWM internship at a now defunct BB back in the day in high school, and it was mostly a customer calling up my boss, saying they wanted X type of security/investment, me researching investments that fit the bill, and my boss selecting a few of those to present to the client. I made presentations for that purpose, as well. In general, a PWM guy or gal will look at the type of asset allocation the client wants, investment goals, etc. to determine what sort of security is suitable for their account and make a recommendation. A lot of times they will cold call, as mentioned above, if the company wants to sell a specific security, if they have one in mind that they want to sell, or if they are trying to find new clients. They also will accept orders from clients, sometimes with a price as specified by the customer, sometimes with the customer telling the PWM person to choose the correct price. They then enter in the orders for execution.

It can also go beyond securities into life planning, securing against potential "investment threats" like tax increases, new child eventually going to college, and so forth. http://www.smithbarney.com/products_services/wealt... seems to have a decent overview.

    • 1
Dec 28, 2007

A friend's dad did this for HNW guys (like 1-10 million). It seems pretty straightforward. He was the relationship guy, then out sourced a lot of the technical stuff (legal issues, tax planning, investments) to other professionals. He worked 25-30 hours a week, if that. Probably took home 300-500k annually in his early 40s.

I don't remember him advising clients on life events/goals (e.g. home ownership, paying for college) but I am sure he did.

As you start pushing into the Ultra-HNW range, you start seeing things like shared family offices, psuedo-concierge services, access to secondary markets and auctions, etc.

    • 1
Dec 28, 2007

For me I had to do a lot of portfolio analytic on the clients' holdings using Thomson One - Investment Management and do a report on the top holdings, biggest gains and losses. My bosses also made me learn VBA and program a lot of macros so we could format excel files easily and get information faster. I actually didn't do any cold-calling at all.

Dec 28, 2007

You're looking for a fucking bonus on an internship?

    • 1
Dec 28, 2007

hahahahahahahahahaha

in all seriousness, absolutely not. you're lucky you're getting paid at all, my PWM internship was fo free.

Dec 28, 2007

Be happy you're getting paid

Dec 28, 2007

It varies greatly on the shop and your exact role

Dec 28, 2007

PWM internship at a large bank is great to have on a resume - easy to leverage for other opportunities in finance. That being said, I don't believe there are many exit-ops from this role. But hey, if you end up loving it, who cares?
Otherwise, you are in a good spot to transfer before full-time.

    • 1
Dec 28, 2007

If you're a senior I would advise against it.

From my experience, PWM internships can be a great stepping stone to other internships (I started with PWM after my sophomore year), but not the best stepping stone for solid full time positions.

From a PWM internship, there are typically three full time paths.

1) Work as an assistant on a team. This means getting your licenses but doing whatever clerical bitch work needs to be done.

2) Work as an "analyst" on a team. Typically only large teams with a lot of cash under management have analysts, and you'll probably end up doing bitch work too.

3) Begin on a path to becoming a Financial Advisor yourself. Super difficult to do by yourself- good luck being 22 and convincing rich old people to trust you with their retirement. You can also join as a junior on a team if you network well in the office, although you're still expected to bring in business.

PWM is just as much about sales than it is about managing money- not as prestigious as you might think. Go do something else first if you do think you want to do PWM, its better as a second career.

"No one ever wishes they had slept more in college."

Dec 28, 2007

Thanks guys. It's not a BB. It's a private shop with almost 90B AUM. I have no idea what area of finance I want to go into right now. What would you recommend I shoot for given my past experience?

I liked the team at this shop and I like that it's a relationship business. I have a strong resume and a high GPA, but I'm not the most technically proficient and I never will be compared to many others. But I'm very personable and all that. So I figured if I can do something that's more client-facing, it would play to my strengths more.

tl;dr: White male wants to get paid for being a while male and looking good in a suit.

heister:

Look at all these wannabe richies hating on an expensive salad.

https://arthuxtable.com/

Dec 28, 2007
GoldenCinderblock:

tl;dr: White male wants to get paid for being a while male and looking good in a suit.

Bingo, my man. The PWM world is your oyster.

Dec 28, 2007

Glenmede ? Hirtle Callaghan? Pm me shop name

Dec 28, 2007
shorttheworld:

Glenmede ? Hirtle Callaghan? Pm me shop name

...why?

heister:

Look at all these wannabe richies hating on an expensive salad.

https://arthuxtable.com/

    • 2
Dec 28, 2007

Because you're asking for advice about something and it varies wildly on what your role and what shop you're at and very few people actually know that about PWM vs thinking everyone's a northwestern mutual cold caller?

But that's cool

Dec 28, 2007
shorttheworld:

Because you're asking for advice about something and it varies wildly on what your role and what shop you're at and very few people actually know that about PWM vs thinking everyone's a northwestern mutual cold caller?

But that's cool

It's one of the shops mentioned here:
//www.wallstreetoasis.com/forums/life-at-a-top-asset...

heister:

Look at all these wannabe richies hating on an expensive salad.

https://arthuxtable.com/

Dec 28, 2007

@goldencinderblock - I took the opposite route as far as knowing I will never be as technically proficient as my peers but am strong in the social aspects of business. I thought a couple years of operational / analytical finance would help strengthen my overall knowledge and then when I switch to a more client-facing role I would be stronger technically. I'm only a year and 3 months into this financial rotational deal and I won't know the results of this until a few years down the road, but at times I do miss the cushy office w/ flexible hours and wonder how strong my book / relationships would be by now if I had just jumped into a more relationship based business.

90B is big for PWM, so they're obviously sophisticated and you'd learn a ton. I recommend you go for it - don't buy into the people that tell you its not good enough because you won't spend 100 hours/week at a desk, re-formatting the same power point 3 separate times. Money is money and at the end of the day, its important you enjoy what you're doing.

    • 1
Dec 28, 2007

Private wealth management is where financial advisers cold call clients, usually with a substantial income, in order to manage their money. They are licensed to give their clients all kinds of advice on stocks, fixed income, real estate, taxes, and insurance. In some aspects it is a sales job, but much of the time you are meeting with clients and doing research on investments. So to answer your question--yes, it is a good place to learn about investing and it would be a great place to intern at, especially if you are in your early years of college.

    • 1
Dec 28, 2007

If you are going to do PWM, try to get on at a place that doesn't have you cold all at all. I did a PWM internship and I did no cold calling. If it's a good gig, the guys you work for will be too busy with existing clients to worry about getting new ones. I learned a great deal about how to manage money during my internship. The guys I worked for had the intuition to know when to get their clients out of the markets and into cash and when to be fully invested. They truly believed not losing any client money and making them as much as possible was God's work. I would stay away from shops that focus on getting new clients just to put them into some cookie cutter managed plan with a bunch of bullshit high fee low return mutual funds.

    • 1
Dec 28, 2007

I can't speak to it directly, as I'm not in WM, but I do think that it's harder than people think - at least at the beginning. Everyone sees the golf and taking it easy working 25 hours a week which is certainly much better than the end-game for most other finance careers from a balance perspective. Getting to that position however is very hard. It's a number of years of building and keeping that books which isn't easy. In banking you can get by with 5 - 10 good, solid relationships as the revenues are very lumpy and a few deals can get you over the hump in terms of target whereas in WM you need to cultivates dozens, if not over a hundred relationships for you to be able to build out a team and live the good life.

    • 1
Dec 28, 2007

I would say don't enter a PWM position hoping that you can move to to IB, because the odds for that are slim to none. And maybe even smaller than that. There are exit ops, but they are usually other forms of financial services/sales.

Also realize that most of these places won't really care about your degree in economics or how much you "get" the market, but rather your ability to build your book. Don't get me wrong, a passion for investing is helpful, but so is a rich uncle. If you pursue this role be prepared to network like crazy and make a lot of calls. Understand you are applying for a position in which 90% of the people don't make it.

If you want to be an advisor great - go for it. If you are thinking about this job as a stepping stone or as a means to get into IB then just stop right now.

Dec 28, 2007

Thanks for the input. I am aware that PWM is all about sales, which is why I feel that I may be a good fit for it (due to the nature of my current business, I have a strong sales background)... What about moving from PWM to AM? On that note, what would be a good career path other than PWM that would lead into AM?

Dec 28, 2007

So far you'e mentioned PWM, AM, and IB. These are all similar in that investment banks do all three but they are all quite different. What is it, exactly, that you want to do?

Dec 28, 2007
psv:

So far you'e mentioned PWM, AM, and IB. These are all similar in that investment banks do all three but they are all quite different. What is it, exactly, that you want to do?

what exactly is the difference between wealth management, asset management and ibd?

Dec 28, 2007

My ideal position would be one in which I would be trading... With that said, I understand that those positions are more than likely out of my reach given my lack of experience in the field, and lack of ivy league degree. PWM appealed to me, because it is on the sales side (not only do I like sales, I have a sales background, and am good at it). It also appealed to me, because it seemed like a way to crack into the field. This led me to AM since, in a way (at least from my understanding), PWM and AM are similar in nature. Again, I would appreciate your input.

Dec 28, 2007
vr4mitsu:

My ideal position would be one in which I would be trading... With that said, I understand that those positions are more than likely out of my reach given my lack of experience in the field, and lack of ivy league degree. PWM appealed to me, because it is on the sales side (not only do I like sales, I have a sales background, and am good at it). It also appealed to me, because it seemed like a way to crack into the field. This led me to AM since, in a way (at least from my understanding), PWM and AM are similar in nature. Again, I would appreciate your input.

PWM is pure sales and it doesn't really have 'exit opps'. You are not given clients to cover, you must find your own. You should take that job only if you know of a way to raise $20 million or more in the first 12-18 months. You really won't get help from the firm. They'll give you a phone, a computer, and a business card and that's about it. If you can succeed, it's a great job, if you have the right personality. Keep in mind that the failure rate is north of 80% in the first 12-18 months.

I don't think PWM and asset mgt are very similar. Guys in PWM sell products managed by people in AM, hedge funds, and private equity....that's about as close as it gets.

Dec 28, 2007

If you think you might like PWM then definitely reach out to them and see if it's for you. You can make a lot of money and have a great work/life balance.

Dec 28, 2007

Let me ask you this, what would be the best career path to get into the investment side of PWM or AM? (investment side ie analyst/trading support/trading as apposed to sales)

Dec 28, 2007

bump?

Dec 28, 2007

bump?

Dec 28, 2007

thanks for the input, just out of curiosity what do you do at a HF

Dec 28, 2007
vr4mitsu:

thanks for the input, just out of curiosity what do you do at a HF

A little bit of everything.

Dec 28, 2007

What type of company did you get your start at?

Dec 28, 2007
vr4mitsu:

What type of company did you get your start at?

Please see link here.

http://www.wallstreetoasis.com/blog/qa-interview-w...

Dec 28, 2007

awesome. thanks

Dec 28, 2007

I am also passionate about trading. I am an advisor at Merrill and it is pure sales. You have to bring in about 1 million a month to stay alive realistically. Craziness.

If you like trading, google proprietary trading shops on google. Most are in Chicago, some NY. I have had success networking on linked in and talking to recruiters. You don't have to be IVY. Another good place to look is energy trading specifically power. Try researching real time power trading.

Dec 28, 2007

Can't tell if this is a joke...

Dec 28, 2007

bump.

anyone?

Dec 28, 2007
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