Hi all, Last night, I had the opportunity to go to an MBA social event where some gentleman from wealth management held a short presentation about his career and thoughts on the market. He was describing his day-to-day work as something that was a good blend between a sales job and an analyst job. I understand the sales side of things, but I’m curious to know exactly how analytically rigorous wealth management really is. I had presumed it wasn’t really rigorous at all. Anyway, he basically just rattled off a bunch of projections about different securities and markets, and every time he’d start his comments off with “My firm believes that…” or “We believe that.” He didn’t provide a whole lot of rationale for why, say, he expected GDP to grow ~3% this year – he just mentioned it like it was gospel. Similarly nauseating declarations prevailed for gold prices, emerging markets, the tech and healthcare sector, and so forth. Is this really what “wealth management” is about, i.e. regurgitating research performed by an investment bank’s research team, or do they do any type of real analysis? Pardon my skepticism, but any time someone talks about their views as “we” in the context of a primarily social event, I just can’t take them that seriously. Curiously, the other alumni in attendance seemed to be really enthusiastic about his presentation but I don’t know if they just felt obliged to applaud just because they all were alumni of the same school. Feel free to discuss!
I work in WM as a strategist. Part of the position is reading and summarizing banks/funds research and recommendations but the real value I feel I add is either validating the research or offering contrary opinions or developing what if scenarios. I also analyze the impact on our clients portfolios. If you took L3 you might understand…
Depends on the shop and size, I’d guess. Some I know do plenty of their own original work, just like any other buyside shop. Some surely just read and summaraze. I personally think a lot of sellside stuff is worthless, despite having flowerly language, so I am sure many lean on their own work. Due to multiple asset classes covered and the lean staffs, the term “generalist” is generally taken to a new level.
Just because I haven’t taken L3 doesn’t mean I don’t understand. Let me clarify that while I do not care about taking L3, I still would like to understand this field with greater acuity. Also, the gentleman’s title was “President - Private Client Services.”
Not much at all! Most investment manager at wealth managment firm are really “asset allocators” (IMO). They still use outside money manager to conduct their stragety (small cap, large cap, international…ect). The analysis they do is to compare which manager has higher/consisent return given a certain level of risk.
numi Wrote: ------------------------------------------------------- > Just because I haven’t taken L3 doesn’t mean I > don’t understand. Let me clarify that while I do > not care about taking L3, I still would like to > understand this field with greater acuity. Also, > the gentleman’s title was “President - Private > Client Services.” Just messing with you. His role is most likely relationship management which, by the way is a skill that I wish I had.
numi Wrote: ------------------------------------------------------- > Pardon my skepticism, but > any time someone talks about their views as “we” > in the context of a primarily social event, I just > can’t take them that seriously. Your skepticism is well put.
recycler Wrote: ------------------------------------------------------- > If you took L3 you might understand… Lol, this reminds me of the way people dog Dan Marino for having accomplished everything in his career except winning a Super Bowl. You just ain’t sh!t unless you got the ring.
In my firm’s wealth management division, 80% of the job is still sales/relationship management related. Bring in high-net-worth clients and institutions.
well is he a wealth manager for individuals or institutions?
His card says Private client Service, saft to assume for individuals.
In PWM you are likely to be explaining to clients and writing research on why you are underweighting TIPS and overweighting foreign bonds than you are writing research on why you have XEL bonds as market perform.
numi Wrote: ------------------------------------------------------- > he expected GDP to grow ~3% this year I bet this guy has said “We expected 3% GDP this year” in every presentation he’s made for the last 10 years.
XSellSide Wrote: ------------------------------------------------------- > numi Wrote: > -------------------------------------------------- > ----- > > he expected GDP to grow ~3% this year > > I bet this guy has said “We expected 3% GDP this > year” in every presentation he’s made for the last > 10 years. And 8% annual return on S&P for the next 50 years 
@ws: no probably not. I work in a similar role and we deal with individuals, institutions, foundations, etc. Really a very diverse client base. I had an opportunity to take either this position or one with our in-house institutional wealth management group that actually runs fund strategies. Went with this one since they are small and we buy most of their product. I like the job and the generality of it (i.e. I get to have a macro view of things instead of focusing on 2-3 stocks within a given sector) and the level of discretion I have over how I construct my client’s portfolios. Yes asset allocation is 91% of the game so if you get that right (which is a substantially higher probability proposition than picking the right stock) your a$$ is covered; i.e. it is easier to do and feel like you have added some actual value than trying to predict what a given stock is going to do (yes I have done both so I am not biased and do know what I’m talking about…not just talking it up since its my current position).
@sellsie and mo: I can see where he is coming from. In a public forum such as the one you observed him we are expected to mirror and express the predictions made by our CIO and provide the reasoning behind it. However, and more importantly, in meeting with clients we can express our own opinion in regard to the markets and the CIO’s calls more openly, but perhaps better yet we can take positions as we see fit taking the CIO’s output as nothing more than just another research report that we take into consideration when deciding how to best position our client’s portfolios. I hope that clears up some misconceptions.
95% people skills 5% being able to understand whats going on. Then using your people skills to explain in their language whats going on.
The people I know in the business say that the best way they can add value is to help a person manage their tax situation.
adavydov7 Wrote: ------------------------------------------------------- > Yes asset allocation is 91% of the > game so if you get that right (which is a > substantially higher probability proposition than > picking the right stock) your a$$ is covered; i.e. > it is easier to do and feel like you have added > some actual value than trying to predict what a > given stock is going to do (yes I have done both > so I am not biased and do know what I’m talking > about…not just talking it up since its my > current position). You just said it yourself, 91% is asset allocation. I agree that some shop allows PM has more discretion in pick asset manager or individual security.
There is a greater range of activities in wealth management than you may think. The firm I work for designs and implements individual concentrated portfolios of individual stocks and bonds. But we don’t reinvent the wheel by doing indepth research on individual stocks (i.e. we don’t perform our own DCF analysis, segment out company earnings and recreate projected earnings etc). There’s already 10 analysts out there doing that who pass the information on to us. The actual analysis we do is less number-crunching intensive and more like investigating the company’s products, prospects, management, industry, competition, meeting with management for a chat, making sure you’re aware of any developments through announcements and filings, and others. We also read the financial statements, but we don’t pull them apart as say a sell-side or buy-side specialist would. I guess it’s more about making sure the numbers look good (through the broker research) and then taking a more macro view of the company and its prospects. Other firms employ guys to trade PWM portfolios on a daily basis, others use option buying and selling pretty intensively, othets may just use mutual funds and ETF’s - there’s a whole world of different ways of managing your clients money. Personally I enjoy the balance of what I do with my firm - you don’t have to be tearing apart financial statements all day and punching numbers into spreadsheets, but nor are you just focused on asset allocation and picking a couple of mutual funds.