Why does everyone hate on PWM/AM?

It seems that based on what I've read on WSO everyone hates on PWM and AM internships and jobs as far inferior, much less prestigious and horrible in comparison to IB, and it seems that the attitude toward PWM/AM jobs is very, very low. As someone who is considering planning to recruit for both IB and PWM (and undecided currently on which path to take), what are your thoughts? 

I personally think PWM could have better work life balance and be more morally satisfying, but there has to be a reason why everyone hates on PWM/AM.

Comments (32)

 
Dec 13, 2020 - 9:18am

Generally, people who work in PWM are not hard workers, not as intelligent, or motivated. At lease that's what people's attitudes towards people who work in PWM. Especially out of undergrad, unless you really had an affinity for PWM and already knew you wanted to get a CFP, most people who do PWM couldn't get anything else.

Additionally, with all the information available now and cheaper services, why should people be paying 1%+ on their portfolio management fees to be run by some 23 year old kid who doesn't even know what an RMD is? Also let's not forget the fund selection are load funds with 1%+ expense ratios too! So the fee to invest with a 23 year old kid is 2%. I'm sure it's worth it since I'm only foregoing millions of dollars of opportunity cost.

 

 
Dec 13, 2020 - 11:44am

Success rate in PWM is literally like 3-6%. Interned in PWM last summer and my MD said 95-97% of people that try to break into PWM dont make it and pivot somewhere else. My brother graduated from harvard business school too and he had 4 or 5 buddies that went into it and i think none of them succeeded. The other side of the conversation that hasnt been mentioned is it is a sales job, not a finance job. There are definitely different nuance opportunities at a private bank like Abbot Downing and really any big wealth management firm, but if you work traditional wirehouse its 100% eat what you kill. Normally they start you salaried and transition you off as your book grows, which is essentially after a year or so. If you make it in the industry your work life balance is amazing, absolutely killer. MD at RBC that i worked for easily cleared 900k a year at age 38 and he works 50 hr weeks at most probably.

Edit: you can always go into PWM, whenever you want, no barriers to entry practically, IB is obviously the opposite

 
Dec 13, 2020 - 5:19pm

@rickle is absolutely right about the perception of IB in the finance industry and within overall OCR. And I definitely wouldn't listen to the super introvert pivoting to ER. Multi-millionaires and billionaires don't want to waste their time managing their own investments and also don't trust a computer to 100% handle their money. They like to know the person handling their generational wealth and build on that relationship for better investment outcomes (tax advantages, etc.)

PWM can truly be for most people. Take JPM PB for example:

- Want to be a true sales person? Work your way to become a Banker on a Partner Coverage team where your main focus is relationship management and client retention, along with building your book.
- Are you more introverted and want a more analytical role? Seek out a role on their Investments desk within a Partner Coverage team where you dive into bigger money, which means more complex investments for wealthy families and others. Lots of people I know in these roles have their CFA as well (not totally necessary, but a plus for sure.)
- A little bit of both? Recruit for a Single Coverage team and become a Client Advisor (where you bring on new clients while also managing the investments). Analysts here get a lot of exposure to these clients as well.

 

This is just one firm, one example. Many other firms work differently, and you can dive deeper into the cloud of PWM. If you want to grind hard post-grad and shoot for IB, nothing wrong with that. It's a totally different area of the business with different needs.

 
  • Analyst 1 in IB - Gen
Dec 13, 2020 - 8:47pm

Except JPM's PB business is fundamentally not PWM / WM and is actually a respected line of work / career path. There is no bullshit weaning you off of a salary into a commission-based role. It's more like the apprenticeship type of progression that you get in professional services careers or in IB.

Standard PWM / WM (not PB, not developing a career at an RIA, not working at a Trust company) in general just sounds like a ponzi scheme for 95% of people going into it. You don't develop any decent skills and let's be real Advisors have no idea what they're talking about half of the time. Your job for the first 5-10 years is to unilaterally be focused on bringing in assets at the detriment to everything else lest you get fired. There is no coaching. No mentorship. No career development.

If you get canned mid-way through growing your asset base all you're qualified to do is more sales or you have to completely switch careers. But sure if you're one of the top 1-2% of advisors that brings in enough assets you can work 30 hours a week and siphon off people's retirement accounts by providing "advice" every now and then between rounds of golf.

 
Dec 13, 2020 - 9:02pm

This better articulates my thoughts. Most advisors are in sweatshop programs or companies that provide terrible planning (Edward Jones). Very few people work at RIAs or add any value at all. This forum will always get mad if you criticize PWM though as seen through MS given and they'll resort to talking about their network, "value add", and making high 6 figures after many years and being the surviving 1%.

 
Dec 13, 2020 - 9:27pm

Yeah I def agree here - I took the assumption that the younger crowd wouldn't know/would never recruit for standard PWM shops anyway, and are more looking at PB roles at BBs or Trust companies. That's where I see most shitting on this site towards PWM anyway, targeting PBs as less-than when compared to IB which at the end of the day is just a difference of opinion.  

 
  • VP in S&T - FI
Dec 13, 2020 - 8:37pm

If you want to do PWM as a career I would advise you to work for AT LEAST 5 years, honestly 10 is most likely the sweet spot, in some sort of a client facing role in finance before trying to transition over.  I know a lot of successful PWM guys sub 40 and almost all of them had another client facing role in finance before and were good at it.  Goldman has a program that targets this exact type of person  I know 40 seems really old to a college student but that is on the young end for an advisor.  Couple of basic reasons why you should wait.    

1. It is near impossible to get people twice your age trust to you with their money when you have no working experience.  Your 5-10yrs in (IB, S&T, institutional asset management, etc.) will allow you to build creditability and polish your communication skills.  You will have spent thousands of hours around people who are similar to the people who you are going to prospecting, you will have a comfort level dealing with people like this.  

2. You are most likely going to have to take a pay cut to move into PWM at the start, so if you have worked for 5-10 years you have saved some money to float yourself while you figure things out.  

3. You are most likely going to want to start as part of a team or as a partner with someone else, even if you have a lot of work experience you are going to need some help and guidance figuring out how things actually work.  If you have substantial work experience and are currently gainfully employed you are going to have time to find the right situation for you.  Also you are not a 22yr old clueless kid, you are going to be able to tell who is BSing you are who is real.  You are going to be partners in what is basically a small business with someone, you want to know exactly what you are getting into.   

 
Dec 14, 2020 - 3:04pm

Its easy af to get into. Not a great career choice straight out of undergrad. Very tough to be successful period let alone as a 22 y/o wet behind the ears --failure rate is in the high 90s. It may seem compelling to some who have very limited offers in IB/S&T/AM/consulting/etc) but its mostly all smoke and mirrors.

 
  • Analyst 1 in AM - Equities
Dec 14, 2020 - 3:26pm

I made a terrible decision in joining right out of school and I had other opportunities. I was essentially lied to in terms of what I would be doing. I was really interested in investments and thought my day to would be more focused on finding the best investments for clients. There is so much random crap I do on a given day that I cannot wait to get out ASAP and join the institutional side.

On the other hand, I do understand that if you were interested in relationship building, this would be the right career for you. Personally, I needed more substance than convincing a random millionaire who doesn't know anything about investing to stay invested when the market drops.

 
Dec 14, 2020 - 5:36pm

There's a lot of reasons why but one is prolly the circle jerk that IB is. Don't read too much into it. It's a bunch of 20 year old giving 18 year olds advice on this site. Kinda entertaining tho

 
Dec 14, 2020 - 8:33pm

The thinking is that PWM selects for salesy personality instead of academic excellence, which is what IB purportedly does. In this sense, PWM is nominally part of the bulge bracket ecosystem, but might as well be boxed in with working in a car dealership, or selling insurance door to door, while IB could be boxed in with law, medicine, consulting, engineering.

Obviously, the thinking is silly when you recall that IB isn't intellectually demanding and at the top it's a sales job to the core. But the prestige component to the marketing pitch, plus the higher bonus dollars in IB, allows IB to source talent more competitively than PWM.

So, if the market can stay irrational longer than you can stay solvent, then the thinking among college kids and 2nd year analysts can certainly stay silly for the entirety of your recruiting season. 

 

The truth is you're the weak. And I'm the tyranny of evil men. But I'm tryin', Ringo. I'm tryin' real hard to be the shepherd.
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Dec 15, 2020 - 7:04pm

PWM is frowned upon here because A) its more of a personal sales/relationship job rather than "high" finance B) it has much lower barriers to break in and C) is generally much lower paying at entry level roles.  Its still a great job with amazing work-life balance and you should pursue if if it interests you.  Many on this forum hate on it as a way to mask their insecurities and try to justify the sacrifices of the IB-or-bust pursuit where they had no fun in college so they can have no fun in their 20s either.

 

ETA: as others have mentioned, I would only recommend this route if you're joining a solid team with UHNW/Institutional type clients where you will be properly trained and given a salary rather than making cold calls on your own all day.

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