Sophisticated diplomats managing money for the world’s rich
Private wealth managers help very rich and, occasionally, famous people manage their money, ensuring that it grows and that they’re able to pass it on to the next generation.
They fall into two categories:
Private bankers – help clients invest their money wisely and avoid any risks that might reduce the value of their assets. They also offer tax and pensions advice, help develop a strategy for charitable giving, and advise on bequeathing wealth.
Private client brokers – help clients buy and sell financial products, particularly equities or stocks (hence the term ‘stockbroker’). They also advise on products to invest in.
The clients of private wealth managers range from company chief executives to property tycoons, sports stars or members of privately run family businesses.
The fastest growing type of client is the ultrahigh- net-worth (UHNW) individual or family – those with at least $10m in investable assets (although some banks only deal with clients worth $30m or more). However, there’s also the high-net-worth market – those with at least $1m to invest – and the ‘mass affluent’ clients who have at least $100k.
Roles and career paths
If you work as a private banker, you can expect to perform one of three broad categories of job: investing money for existing clients, building relationships, or managing back-office functions such as human resources or accounting.
People working in investing either invest their clients’ money or offer them detailed advice to help them invest their own money. They are typically product specialists: experts in a particular asset class, such as fixed income, equities, structured products, or investments in the private equity and hedge fund sectors.
Those on the relationship side are effectively salespeople who cultivate links with clients and sell the bank’s services. This can involve a lot of travelling and close contact with demanding people – relationship managers have been known to compare themselves to general 'family advisers’ akin to the family doctor. After a relationship private banker has established a client’s needs, specialists produce a detailed solution.
There are two types of private client brokers. The first works on discretionary mandates, in which wealthy clients communicate their investment strategy and the broker buys and sells the financial products they think appropriate. The second works on advisory mandates, where the broker advises the client what to invest in, but needs their permission before making a move.
Junior brokers are most likely to work on advisory mandates. However, making the first move can be challenging, as generally only the larger firms offer graduate training courses.
Pay and bonuses
Singapore has been labelled the ‘new Switzerland’ because of the rapid growth of the wealth management industry there. Relationship managers start on S$80-120k ($63-95k), according to recruiters Robert Walters, rising to S$220-320k+ ($173-250k+) at the senior end. In Hong Kong, junior relationship managers earn HK$300-540k ($39-70k), rising to HK$600- 720k ($77-93k) for those with more than eight years’ experience.
In the US, the mean wage for a financial adviser is $91.2k, according to figures from the Bureau of Labor Statistics.
Switzerland remains a hub for wealth management, and relationship managers earn CHF100-160k ($108-170k) after five to seven years, according to Robert Walters, rising to CHF160-260k ($172-280k) in the senior ranks. In the UK, a senior private client investment adviser should expect at least £90k ($138k), while junior positions typically pay £40-60k ($61-92k).
In an industry built on relationships, it’s not surprising that one of the key attributes wealth managers look for is ‘emotional intelligence’, according to Joanna Thornell, managing director and head of banking services at Coutts in the UK.
“Personality is a key factor behind the success of a private banker or wealth manager, given the importance of chemistry in building and sustaining trusted relationships with wealthy individuals, their families and their advisers,” she says.
Knowledge of financial products within your specialism is important, which means good numeracy skills and a keen interest in financial markets, but a good private banker must always present their advice to clients in a way they can easily understand.
“We are looking for people with a strong curiosity and active interest not just in investments and the financial markets, but across every aspect of an individual’s wealth planning,” says Kam Shing Kwang, managing director and head of Hong Kong at J.P.Morgan Private Bank.
In the fiercely competitive market of wealth management, private bankers need technical expertise to get ahead of the herd. Most firms will teach their juniors what they need to know, but a natural “inbuilt curiosity and ability to connect with people” is what will set a good private banker apart, says Thornell.
“Candidates must also be confident and demonstrate a willingness to learn and ability to adapt, as markets or the environment in which they work continually change,” she says. “Communication skills are also important given that the clients they will be dealing with are typically highly intelligent, successful and demanding individuals who are often very short on time.”
“Private banking is a long-term career, so the ability to build solid and real relationships over time, as well as to gain the trust of the most successful people in the world, is another trait of a client adviser,” adds Kwang.