Been working in buy side ER for ~ 4 years and have a CFA. Good job that’s intellectually stimulating, but the stresses of stock picking, earnings season, and slave to newsflow are sort of getting to me.
Was looking into PWM as I think client work seems more appealing, but not looking to become a FA to pull in the money- more on a support person that can do a mix of CFA/CFP stuff (asset allocation, client relationship etc)
Wanted to see if anyone ever made this move, and what the pros/cons are? Do you need a large network of high net worth clients to become succesfull in this area long term, or do roles similar to the one described above exist?
As you work in equity research so you might be able to shed some guidance…how do you forecast fair values or make a reasonable approximation of FV changes when you are doing your research? I am absolutely stuck on this…
The standard in the industry is to make up random numbers and hope the stock price magically appreciates in that direction. This is widely accepted as long as you have a convincing cover story for your investors.
I’ve sort of made the opposite move. Large network of HNW clients? Yep, you need’em or someone to get them for you. The roles do exist. Check out trust shops, private banks, & RIA’s.
well institutional stuff seems a bit boring to me as you don’t really get to know personal clients as much. in the long run, i’d like to learn more about personal finance, which also the institutional side doesn’t really with.
You actually want to sell to individuals? God help you man. You overestimate how enjoyable time with the average HNW asshat is. Pretty much you’ll be selling junk to subject matter idiots with insane and unreasonable demands.
I’ve been in the type of role I think you’re talking about. Like JBro said, check out Private Banks for a good opportunity for this type of role. Also Trust companies and RIAs. There are many roles available where you’re on the investment team, but aren’t necessarily responsible for prospecting.
Agree and disagree. Depends what kind of team you are with.
The analyst community sometimes beats up on PWM but I love it. The pay range can be less or more than other areas of finance, and less nerdy/ugly/socially handicapped people than your typical finance areas. Its a good place for well rounded people, you need the usual credentials plus a good personality to fit in.
If you join a junky independent it will be 100% sales, mostly old school commission based businesses, little room for advancement and forced to push the garbage new issues that the big banks didnt want. Clients are generally small fry’s, unsophisticated and demanding. Books of business are small and the brokers are usually on the cheezy/slimy side of things.
If you join a BB or major bank (here in Canada its the big 5 banks or go home with few exceptions) there are a lot or larger teams with plenty of CFA’s in the ranks and decent pay (great pay by non-finance standards). If you join a good team the clients will be public company management, business owners, athletes, actors even lotto winners, inventors etc. In Canada retail licensing means you deal with both retail & institutional clients so you may have mutual funds, charities, public companies etc on the books as well. Some clients will be more sophisticated than you, others will be clueless trust fund babies. I find the typical HNW/UHNW (aka rich person) to be happy, pleasant to deal with and above average intelligence/ market savviness.
I’m on a large discretionary team at a major bank, make well in to 6 figures enjoy the work and most of the clients. Coworkers are great as its a business of people that have a balance of social skills and education.
Id try to get an associate role at a well recognized institution with a high performing and established team. The PM’s on those teams require staff with strong finance credentials and people skills. Your focus will likely be on portfolio management and meeting with existing clients and the person/people below you do all the admin stuff. You will be paid a base + commission on your advisor/PM’s revenue. I can’t stress enough how important the choice of team and company are. There is a very wide range and if you make the wrong choice and join a struggling team/company you could easily be miserable and hating PWM without having a clue what else is out there.
Hope this helps and feel free to ask any questions.
^I’ve long considered a move to PWM and will strongly consider it if/when i get my charter. With this said, what do you think is an appropriate total comp for someone who comes from a sales background - starting with retail and moving more towards the institutional side? the 6 figure comment is a large range are we dealing with low 6 figures or on the high end? Do you suggest buying someone’s book, coming into a practice where a manager is on the onset of retiring, or just starting from scratch?
I’d aim for instritutional side also. Look for smaller shops if you want a more personal feel. Boutique asset managers, endowments, family offices etc. You can be working on a small team with a broad responsibility set and your end clients will be relatively sophisticated.
The one perk of pwm that i see over institutional sales is less travel and more leisure. I was at foxwoods this weekend playing with a woman who works in pwm in nyc who was discussing her normal hours, range of salary, and what her job actually entailed. All in all, it was pretty appealing.
Sorry about the late reply but maybe this finds you. if you don’t have previews PWM experience or strong finance experience, IE you only have soft skills then coming in fresh with your charter I would expect you to make the low end as an Associate PM (ie. #2 on the team), which is around the $100k level total comp (less if you are a recent grad). The highest paid APM I know personally makes close to 7 figures. If you go the PM route and buy a book or build your own then you could be making less than anAPM on a top team if you are at the low end, or millions per year if you do really well. Like other areas of finance, PWM can be hard to crack in to but if you have credentials and a good personality then you will be accepted. The standards for education have been rising rapidly for PWM but I cant stress enough if you are not a people person or if you are introverted you wont enjoy it. You will be in an office full of outgoing people that like to have fun so if that sounds like you then you will have a ton of friends. If you prefer to stick behind your computer monitors working on excel, you will be put in a corner and your growth will be limited. Not because you have to be friends with everyone in the office, but because you need to be able to talk to clients to add value. Hope it helps!