Private Wealth Management

Financial Planner / Private Wealth Management / Retail Brokerage There are lots of euphemisms used for what people do in this industry. People are sometimes called financial planners, wealth managers, private bankers, stock brokers etc. There are thoughtul fee-only financial planners working in small-town America, everday “stock jocks” in “bucket shops” trying to sell equities and more rarefied wealth managers who work for Swiss banks in Zurich – catering to the very wealthy. Whether cultured or not, the key point is that private wealth managers provide services to individuals rather than institutions and as such are not investment bankers in the traditional sense of the word. It turns out that in today’s environment that is not such a bad thing. This is a huge growth area and more people than ever are turning to others for advice and guidance in their savings and investment decisions. A good private wealth manager provides quality, objective advice to a group of individuals and is typically gauged by the dollar amount of “assets under management” that he or she is managing. Top players will have between $500 million and $5 billion that they are managing for their clients. These assets are often “sticky” so a wealth manager can jump from firm A to B and typically take most of their customers with them. Not surprisingly, pay is good in this business once an individual has accumulated a pool of funds under management. In 2009 there has been hot competition to get the best wealth managers in each of the various firms. The major players are perennially trying to pick up assets given that the fee flow from these assets is generally stable. For example, Bank of America’s purchase of Merrill Lynch was primarily motivated by a desire to pick up the “Thundering Herd” of Merrill’s brokers rather than their investment bankers. In this tough economy, this is an area where hiring is still taking place. Jobs are available but, of course, it’s not easy. To break in involves picking up customers, knowing your stuff and having a good sales personality. An interesting movie that portrays the sometimes brutal process of getting started in this industry is “The Pursuit of Happyness” with Will Smith. It turns out that if you have been laid off as a traditional i-banker or money manager, this is a good place to go. You may well have institutional client relationships that can be translated to success as a private wealth manager.