Exit opporunities from wealth management?
Move to Bolivia.
(Note: if you already live in Bolivia, move to Estonia.)
You’ll never be a master of the universe type in Wealth Management, but it can provide quite a comfortable life with good work-life balance once you’ve collected a book of clients. It helps to have rich friends of course. Or make them while you’re a junior wealth manager.
Collect your fee. Golf by 3:00.
Not many people make it big, but when you do life gets easier once your book is established.
That could also apply to garbagemen
One exit strategy is to sell your practice. Usually this involves selling your book of business to another wealth management firm and servicing the clients for a transition period, say 3 years. If you had $50M in AUM, you’d generate about $500,000 in annual recurring revenue (this can vary significantly by practice). At this level you’d be selling your practice for about 1-1.5 million.
You can also go the opposite route and acquire other practices. Wealth managers who have acquired 5 or more practices sometimes will transition into a CEO type role and hire an employee to manage their book of business. Many of the people who go this route also make a career of advisor coaching, where they use their best practices to mentor other advisors to improve their practice, for a fee.
Depending on what company you work for, there are also many opportunities for advisor recruitment. People who get tired of the wealth management business for whatever reason often sell their practice and become recruiters for their parent company. Advisors get paid fat bonuses when they transition to a new firm and this has become a big source of revenue growth for some firms.
Who are the big garbagemen of the world? I haven’t been keeping track.
Admittedly, being a garbageman is a highly sought job here in New York because (as long as you don’t need sleep) many shifts are compatible with having a day job and generating more income.
Wayne Huizenga… he had a little trash collection company that went public and committed accounting fraud, in a sense serving up garbage to stock market investors. You need scale if you want to sell garbage to people and you have to be smart. Probably some pretty material portion of the Forbes 400 finance section are garbagemen in one way or another. They don’t drive the truck but they are in the garbage business.
^ cheerio
Ok, I didn’t realize that by garbagemen, he meant “Owners of Waste Disposal companies.” I can see how that can make people rich. One of the women I dated years ago did exactly that.
Actually, checking up on her, it looks like maybe she got rich by letting her husband use the company to launder corrupt mob funds. Fancy that! That could have been me, if I’d just played my cards right!
She still looks good in her photos, though I think she was cuter when I dated her and her hair was different.
He probably didn’t mean that, I just brought it up (but it’s still true).
Pics
… and the ‘plumber’.
I wrote a reply on my iPad, but it crashed so I took a screenshot of what I wrote before rebooting it. Since I’m slow at typing on my iPad I’m just going to attach a picture of what I wrote and add a few more points.
There are two more exits that I’ve seen:
-product strategist. This role comes up with portfolio ideas and strategies for the firms financial advisors. It’s also a “closer” role that gets brought in to meetings for big pitches. It is a cool role that people seem to enjoy since you don’t have the menial daily tasks of being a financial advisor (compliance BS, servicing client accounts, etc) and focuses more on coming up with interesting ideas. This role is only at larger shops. Pay is $150-250k
-portfolio manager. Financial advisors that know their stuff have transitioned into portfolio managers at smaller shops. It’s not nearly as lucrative as a MF, HF, or PE gig, but it still entails picking stocks/funds/indexes albeit it usually entails benchmark hugging.
Please excuse my typos! 
double post
It really depends what you mean by wealth management. I know private bankers that have a $400k base not working for their own company. If they wanted to transition to a more business management or strategy role, many of them could I am sure. The point is, why would they want to?
People who are ambitious and risk seeking have definitely gone out and set up their own shops. All of the members of one of the most successful MLP shops started in “wealth management.” I don’t have the disrespect for the industry a lot of people do. It’s diverse. There are JT Marlins and family offices.
Why exit from wealth management? There are a lot of good careers working for endowments, foundations, charities, family offices etc. Work your way up the ladder and the pay is pretty good. You could also work on the sell-side advising (i.e. selling products to) such clients.
Work life balance tends to be good in asset management compared to other finance positions that people assume are more glamorous. But in reality, there is nothing glamorous about working 80 hour+ weeks and getting maybe one weekend off each month.
Don’t assume the grass is greener elsewhere.
Depends on several things. Where did you work (wirehouse, RIA, bank, etc.), how big is your book, why do you want to get out, and what do you want to do?
Getting into portfolio management from wealth management is extremely difficult in most cases. Depending on the size of your book, you would probably make more money as a wholesaler so there’s that.
Northwestern Mutual called me today…
I just successfully transitioned from Financial Advisor to an Associate Portfolio Manager role so it can be done. I was in Wealth Management for 3 years and since I had a dearth of rich friends I always viewed this as a stepping stone.
Everyones points are right on. It can be a great work/life balance and pays well once you’ve attained a certain AUM but that takes an affluent network or years and years of sales hustle. The best thing is to work on a Senior Advisor’s team who is about 2-3 years away from retirement and buy his book.
I took the PM road for several reasons but speaking monetarily I will only be 2-3 years away from making the kind of money that it would take me 10-15 years as an Advisor.