What do they do everyday? Is that related to Portfolio Management? Is CFA level I useful for this kind of job? Thanks!!
You need L3 for portfolio management.
Private Wealth Management is dealing strictly with HNW’s ( High net worth clients) who have outgrown typical retail mass market mutual funds and want more tailored investment portfolios. Basically they are handled by Investment Counselling firms by client associates who have the CFA charter and are usually expected to be just as knowledgeable as a portfolio manager.
IH8FSA Wrote: ------------------------------------------------------- > Private Wealth Management is dealing strictly with > HNW’s ( High net worth clients) who have outgrown > typical retail mass market mutual funds and want > more tailored investment portfolios. Basically > they are handled by Investment Counselling firms > by client associates who have the CFA charter and > are usually expected to be just as knowledgeable > as a portfolio manager. There must be different “levels” of PWM, then. I know a few guys in PWM and most of their clients are retired people with around 1-2 million, alot of them former business owners, and they basically park their money in mutual funds and collect a hefty fee. This is outside NYC though. It pays great after a few years when you have a client book, but it’s pretty much a sales job…and I would be bored out of my mind doing it.
PWM is most often associated with discretionary fee based investment advisory firms. Normally ppl with assets > 500k. They provide customized portfolio mgmt. If they use MFs…they are most likely no load low fee funds. These guys consider themselves as the anti-broker. (I work in HNW btw). Anyways…much of our business comes from the big brokerage houses who, from everything I have seen and know, tend to sell their products and invest in boring large cap names across the board and provide limited fee disclosure. I am bias obviosly. My best friend works in LEHs PIM division (Private Investment Mgmt). They actively seek out executives. Their clients tend to be multi or mega millionaires instead of the everyday run of the mill millionaire. PWM is the place to be in my opinion. We rely solely on word of mouth. No marketing or sales = no pressure. Hours are great. Salary is great.
I second jbisback. Hours are great, sales pressure is low, client turnover rate is VERY low so revenue streams is rather consistent. Consistent revenue = stable job with good pay. I just started PWM so I haven’t seen the $, but hopefully money will start flowing as I recommend good stock and/or build books.
jbisback, what is your background? (if you don’t mind my asking) Did you start off in a team, or were you on your own? I always thought it would be a great job to have for all the reasons you and Kevin mentioned. Also, what area of the country do you work in?
Sure. I have nothing to hide. I started as an intern here the summer before my Sr. year of undergrad. They asked me to sign with them 2 months in. I agreed. I didnt want to be looking for a job all sr yr. So i started off as an analyst @ 40k. I was pleased with that being pretty young and whatnot. We are a small shop so I was the only analyst. I worked with one of the guys who owns the place and I basically find investment ideas, report on any news, and they also gave me 100k to day trade in a prop acct (which is what I do from 9:30 - 4 everyday) I try to get in early or stay late to get other stuff done. Anyways…so I started full time May 2006 @ 40k. I am now making 60k and I get solid benefits. I convinced them to pick up the lease on my car (long story but I basically went waayyyyyy above and beyond and proved to them that they needed me in order to run the place. Other than the two owners…I am the most senior person here. We have had three ppl leave and we bough another small firm.
I work in PWM now for “2/1” of the largest entities in the U.S. I’m not sure what you goals are but if you’re interested in a mentally challenging job you probably shouldn’t get into PWM. With that said, you really can’t beat the atmosphere and work life balance. Also, just fyi, PWM is becoming more of a manager of managers role rather than an individual stock picking role; really, can one shop/man be an excellent growth, value, core, LC, MC, SC, Intl., etc manager all at the same time…No! Thus, they must choose the best managers for their clients portfolios.
What part of the country are you in? What kind of bonus do they give you? How is your performance evaluated? Thanks for sharing. This is useful for those of us considering a career in that area.
Essentially, it’s a sales job.
gobucksgo, you are right on the money! Dante, Assuming you know who I work for, I’ll move onto your other questions. I work in the Midwest (think St Louis, Dallas, IO, KC). The typical pay for someone who has little experience, CFA, MBA (average univ) is $75-90K base plus a annual bonus of 15% to 35% plus quarterly bonuses/cuts based on the size of the deal that you helped bring in. Your overall performance is based on factors like attrition, closed deals (heaviest weight), etc. Beating the various benchmarks in you client portfolios carries little weight; of course it does factor into attrition/retention (your clients will probably leave you if you suck). Please let me know if this helps or if you would like further info, which I can get to you via email.
Thanks guys - good info. JB, strong to quite strong move on the car lease!
Per my previous post - the shop I work at doesnt do any sales or marketing. We let our numbers speak for themselves. And in regards to mental stimulation…I have plenty of interesting things to work on. Im on the phone with industry professionals everyday. I come up with my own themes, present them to the investment committee and we go from there. I just got done working on a chinese coal company that I spent quite a bit of time working on. In addition, I also run all of the fixed income for the entire shop. Our strategy is very simple and is easily implemented. But…how many 25 year olds can say they manage 75m in FI ? …and Im an equity guy…i hate FI. Anyways…every shop is different. We dont use wrap accounts and parcel out business-that is what many brokers do. We DO NOT do any sales or marketing. Life is good.
I agree with some of the above posts. I think you can get a good feel for PWM if you search “private wealth management define”. There seems to be many definitions and we are all biased based on our personal experiences. Just one example of a PWM job… I got a call from a recruiter yesterday. Went something like this…“my name is such and such and we are in search of a senior portfolio manager in our private asset management division. This is not a sales position. You will buy LC stocks and mf’s for our HNW clients.” It was not a job I will pursue (I’m not looking for a job, step down on the food chain, narrowly focused, and based on an approved list of stocks). The job pays $120k base with up to 30% bonus.
Well gee golly jbisback…sounds like I should have got on with your shop. I guess the nature of the job can be quite different considering the size/location/specialty of the company. That also makes sense that a smaller shop would allow their employees more autonomy and creativity; larger BBs typically have things very structured and specialized.
i take it that this is very similar to how TD PIC works. the only thing i want verification on is, how hands on and how much input do you have in terms of constructing a portfolio (asset allocation, security selection)? do you guys send your money to guys at anohter department “asset management” for the actual portfolio management?
FrankArabia Wrote: ------------------------------------------------------- > i take it that this is very similar to how TD PIC > works. > > the only thing i want verification on is, how > hands on and how much input do you have in terms > of constructing a portfolio (asset allocation, > security selection)? do you guys send your money > to guys at anohter department “asset management” > for the actual portfolio management? Assuming this question is directed at me, we have all the discretion as to how the $$ is invested. We are, however, limited in what we can actually put in the portfolios (i.e. HFs, funds, individual stocks, etc).
bryant, may i ask why there are restrictions on what you can put in? is it a restriction set by the clients or by the firm? also, when selecting securities for a portfolio, do you actually perform your own security analysis or do you hit up advice from security analyst at your research department? from my understanding of Alt. Investments, it makes sense for clients to get into alt. inv. if they have a big portfolio since there are diversification benefits from them.
I just got a position as a PWM PM and have primarily worked with HNW the past several years. It’s funny because a buddy of mine who is an Institutional Investment Counsultant, are always discussing how different the PWM world is vs. the Institutional side, even when dealing with the same goals and investments. Basically, with PWM you have to “dumb” it down with regards to investment management. Focus is less on the numbers but more on the relationship management part (keeping the clients happy with communication, service etc.) Institutional side is all about the numbers. Regarding sales, it really depends on the culture of the firm. Some firms expect PWM PM’s to sell, other firms focus on retaining and servicing existing clients. But I have noticed that more Senior PM’s tend to have good sales skills and can close well when presenting to new clients. Don’t know if this is more of a function of the position or the person.