Private Wealth Management vs. Equity Research

Looking for some thoughts from the forum on two very different career paths. I’m a level 3 candidate and I am in the middle of two interview processes right now that seem to be going well. One is with an RIA ($2 bil AUM) as a Portfolio Manager (PWM version of PM) position. The second is for an associate position at a boutique equity research firm (sell side) in a sector I think is fairly interesting. I know I’ll make double initially in the RIA role but I’m looking at the long game here, as hard as that is.

Assuming I get offers at both, I’m conflicted because they are two very different career paths, one being private wealth management to eventually build a book in a city that I love (and have good connections in) and the other down the sell side path, which would in theory open doors to the buy side at a fund. I’ve always said that I am going to be a fund portfolio manager one day but the thing is that I really like working with clients and talking to people. I’ll admit that I’ve looked down on private wealth management and business development at times because it wasn’t “technical enough” but now that I have the option between the two I’m having second thoughts.

My skillset is about evenly matched between the two positions. The last three years I’ve been with a firm that builds hedge funds for insurance companies and it’s a mixture of meeting with UHNW individuals (so client facing) and programming financial reporting software (kind of nerdy).

Has anyone on here done both Equity Research and Private Wealth Management that could give an opinion? I’ve seen some on LinkedIn that left ER to go to PWM so I know these unicorns exist. Any thoughts are appreciated.


In terms of core skills and the nitty-gritty of valuation and fundamental bottom-up work, the ER job is the best choice no question.

PWM is more high-level investing, more macro, more bigger picture allcation etc.

not saying 1 is defn better, but in my personal opinion, i think it makes more sense to get fundamental expereince first, and transition to allocation/macro later.

Put it this way, there’s always room for good people in reputable PWM firms. The sell side window closes after a while… PWM is a great pre-retirement gig after workign the markets for a while, but if you’re still a youngin, it’s a clear choice.

Thank you!

Just depends what you want, I suppose. I wouldn’t enjoy PWM (I had a similiar choice). I don’t know much about PWM career paths, but I imagine they are different. I’d just ask myself what I really want to do? And how important is work life balance (I assume PWM is similiar to a broker’s schedule)

I have experience with both. mk17 is right.

If you want to max your long term earning potential, ER is the better choice.

If you are content with a well paying job that can cover a comfortable existence, while having decent work-life balance, PWM is not bad at all.

If you don’t mind being ridden hard by your bosses, the logical choice is to do ER first and see how it goes, then look for a PWM job later on if you decide you aren’t doing well or want to tone down the stress.

Another note on PWM: it’s a field where clients like you to be older/plausibly experienced. Wealthy business owners in their 50s generally don’t feel comfortable entrusting their assets to someone under 35. They’ll let you be their broker and execute trades, and they’ll listen to your analysis, but the firm will make sure that someone with a little grey hair is actually the portfolio manager.

Going against the trend bit…boutique sell-side, especially now and especially after being out of school for a while can be a tough row to hoe. I have seen very smart people rise as high as director of research at boutique firms and have no viable options to which to turn for a buyside job because they are, once again, too experienced.

Does the RIA you are applying to run any money internally? If so, that may be a better choice should you want to actually manage a fund. I have seen some RIAs build a separate account strategy internally and subsequently launch a fund either themselves or by sub-advising for a distributor.

So, maybe not much help, but I really think you should go with the one you are going to be happier with and willing to work harder at. How long are you going to be ok making 50k when you could be making 100k if you had made a different choice?

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If they do, they’re going to have a bad time next year. DOL isn’t taking kindly to putting clients in your own funds. Doesn’t mean they couldn’t sell their funds to other advisors, but that’s an entirely different business model.

bchad is pretty right on. The ceiling is much higher doing ER if you can get into the buyside. If you stay SS, you’ll wish you’d gone the other way. Here’s the thing though, you start with a $2B RIA now, be a meaningful contributor to their success as they add another couple-few billion on top of that, and eventually get an equity stake. I don’t know how many people work at this RIA you’re looking at, but if you have a shot to move to the top over the next - I don’t know, 10 years? - you’ll be pulling down close to or above seven figures. You know how unlikely it is to make that kind of money going the ER path? Many PMs don’t make that.

Ceiling for ER-to-PM may be higher but it’s much less likely you’ll ever get there. The RIA route most likely offers better work/life balance and if you stick with it you’ll pull down plenty of money.

None of that matters, however, if you want to be a PM. If that’s what you’ve always wanted, go the ER path. GL either way.

My guess is that it would be easier to go from ER to PWM than the other way around. If your married, the PWM would be a much better work/life balance fit. If your married and don’t like your wife, go with the ER job.

From your first post, to me it sounds like to you are leaning towards the PWM role? (Do you want to be a PM building custom portfolios as an RIA, and delegate the financial planning to other associates)?

ER; however I would try to get two offers and leverage the higher pay to the ER people as much as you can even though they are different roles. I would have the mindset of taking the ER offer no matter what they say but you have an opportunity to negotiate if you have something else on the table. You could always go to PWM later as others have stated above but for now it would be great experience in ER to gain the fundamentals.

i work in PWM and have a role similar to a PM at an RIA, though my duties go well beyond PM activities. what i’ve found is that guys on the ER side really know the sectors they follow but know almost nothing about the sectors they don’t. i really enjoy the ability to bring it all together and actually attempt to judge valuation between sectors, rather than just within them. maybe its my experience, but i find the prospect of doing SS ER painful as you’re basically locked in a box and imo overanalyzing essentially unimportant company specific things and not at all analyzing truly important things like relative valuations between your sector and the other ~90% of the market.

your workday in PWM ensures no burnout or divorce and in the end you are likely to make more in PWM imo, performance and acheivements being relatively equal.

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Hire me Matt! I’m sold!

deal. come to Canada.

Just curious, whats the breakdown between sales and research for your job? I really love helping people with recommendations, but was always turned off by the sales first mentality of most firms rather than making the right decision for clients.

Can’t speak for MLA, but I’m in a very similar role. I have 0% sales responsibility other than sitting in a few client meetings and explaining how our process is different than most FA/PWM’s. Most of the day to day is spent building investment portfolios and monitoring recommendations.

95% of advisors/PWM are dishonest salesman. If you walk into their office to interview for a position they’re going to want to know how you can increase their revenue. How can you sell products and to whom are you going to sell them to? You have a big family, great! Lets get all of them an annuity, even your 12 year old niece. You volunteer to help the homeless? They could use annuities too. Your 97 year old grandma is sick and placed into hospice care? Sounds like a great candidate for some high-load A share mutual funds.

There are some firms now, and independent RIAs have led the way, where they are developing CIO/PM positions for their firm. There’s a big recognition that 60/40 isn’t going to cut it anymore and many baby-boomers are more interested in reducing risk than generating great returns in their portfolios. Many practices are also realizing that if they don’t provide additional value, then they’re going to get squeezed by the robo-advisors. This will be especially true if the fiduciary standard becomes manditory and if 12b-1 fees get banned entirely.

Financial planning is the main way for a financial advisor to add value for his clients, but so is offering more advanced financial advice. I’ve found that alternative investments are a complete mystery to most advisors, so if you can come in and add a small allocation to managed futures, maybe a market-neutral fund or a nontraditional bond fund, it really gives that firm an edge over the traditonal advisor who has a few target date mutual funds and some individual stocks. Obviously you need to have the capability of picking a good alt investment manager, there’s a lot of turds out there.

I think a lot of advisors are realizing that they need to make a change and we’ll see a lot of demand for these investment specialist roles. If you search ‘CNBC top 100 fee only wealth management firms’ you’ll find a list of companies that are doing exactly what I’ve outlined above.

lol. 100% True.

Great info thank you. Its good to hear these positions exist.

I did both. PWM first and ER second (currently).

I think doing the equity research, if you don’t succeed - will still give you IMMENSE insight into what really moves markets, and make you much better at PWM if/when the time comes.

That being said, I generally hate people, so PWM wasn’t for me. Maybe if ER doesn’t work out, I could go back to it with far more wisdom, but for now, I’ll do my best to stay on the buy-side.

Anyone find out what this chap ended up doing?