Have you always been interested in providing others with sound financial advice? Do you enjoy identifying sound investment decisions to help grow a portfolio over the longer term?
If so, your interest and personality may be a good fit for wealth management. With the share of wealth/retail client segments as a % of total asset under management (AuM) expected to grow from 58% to 64% in the next 5 years, demand for wealth managers are expected to increase to capitalize on this trend.
Whether you’re interested in working in wealth management, or simply want to know more about what’s involved, read on as we take a closer look at the wealth management career path and highlight what it entails, how you can expect to progress and the benefits on offer.
Aside from the opportunity to earn a decent compensation as you progress through the ranks, here are some other benefits associated with joining this sector:
Most individuals suited for such a position are highly motivated and they enjoy a significant level of independence. This is not always the case with other financial roles such as accountants and risk managers. Wealth managers also need to have the right personality to be able to build solid relationships with their clients and anticipate their needs and requirements.
The term “wealth manager” is quite broad and it can encompass various roles and responsibilities. In essence, a wealth manager offers a holistic, big picture service to high net worth individuals (HNWI) on investment advice, some tax planning services and estate planning.
So, what does a typical day in the life of a wealth manager entail?
Similar to other professionals, wealth managers usually begin their day by examining any client emails or correspondences. This helps them to better plan their schedule. Other preparatory tasks can include analyzing the latest market trends, scheduling meetings with the clients themselves or preparing tax and insurance recommendations for your client presentation.
You may or may not be surprised to learn that wealth management can also involve a significant amount of paperwork. Professionals can often spend a lot of time at their desks, particularly at entry level, however hours aren’t generally as long as in some other sectors such as investment banking. Other daily tasks include attending in-house meetings and/or seminars, analyzing the latest investment opportunities and monitoring the performance of existing portfolios.
If you’re considering a career in wealth management then you’re probably wondering how to get into the industry to begin with, and how you can expect to progress.
The majority of candidates will need to obtain an undergraduate degree to be considered by a wealth management firm or department at a bank. Ideally, this should be related to financial services. Examples include business management, accounting, economics, and financial planning.
Most firms will not hire an individual as a wealth manager with no prior experience, so it’s important to cut your teeth and gain experience either by interning or by taking an entry level position.
However, it may still be possible to enter into this field slightly high up the chain if your professional background centres around finance and relationship management, and you’re able to demonstrate an excellent level of transferable skills and knowledge.
Let’s take a look at a typical wealth manager’s career ladder:
Most professionals will begin their careers as an analyst. They perform fundamental duties such as sourcing new clients, examining potential investment opportunities and assisting customer relationship managers. Various administrative tasks such as organizing presentations and collating data may also be required. Most individuals would expect to remain an analyst for between 2-3 years before progressing.
This next position is arguably the most familiar, as it involves establishing relationships with the clients themselves. Some core aspects include:
Relationship managers will also oversee the actions of junior analysts and they can also be involved within the overall training process. An additional 2-3 years will be required before ascending to the next level.
While not necessarily the next step in the chain from relationship manager, a director of business development at a wealth management firm plays an important role in developing new client relationships and helping to secure new business, as well as helping to maintain excellent relationships between wealth management teams and their clients. They will often be involved in ensuring strategies are implemented in accordance with client needs, and educating clients as to the range of services the firm can offer.
These professionals work closely with sales teams and they may also be involved in the marketing sector (in relation to the wealth management firm itself). A director of business development may remain at this position for between 5-10 years.
This tends to be the top position within a wealth management company although some firms may provide the opportunity to become partners. Investment managers and senior portfolio advisors spend a great deal of time overseeing both private and commercial accounts.
Once again, senior portfolio managers are generally focused upon the higher net worth clients in order to ensure a good return-on-investment (ROI). Additional certifications may be required to attain this position.
Although this may not appear to represent a “title” in the traditional sense, it is still sensible to highlight that some wealth managers may eventually choose to start their own firm. This normally takes place once they have ascended through the ranks and developed a highly detailed knowledge of the marketplace and strong relationships with many potential clients.
How much can you expect to earn as a wealth manager? The answer to this question involves the position itself and how you progress over the years.
In order to attract talent, wealth management firms and wealth management divisions at larger institutions actually pay quite good entry level salaries in order to compete against other options within the financial sector. This means it’s not unheard of for analysts or associates to earn somewhere around $100k at the top firms.
In a lot of cases, once you reach a relationship manager position your salary will be dependent on the level of assets under management (AUM) that you’re involved in managing. The firm will charge a management fee (typically of around 0.5%-1% depending on portfolio size) to each client. The manager will then take home a cut of this fee, once overheads and profits for the firm have been covered.
This pay structure means that as a manager develops their client base, and (hopefully) increases the value of the client’s assets, they can expect to see their commission increase. A relationship manager at a good size wealth management firm could expect to receive around 40%-50% of the management fee as compensation.
As more senior managers will typically be looking after higher net worth clients, as well as clients whose assets they’ve helped to grow over the years, their AuM figures will mean they will take home higher levels of compensation.
For example, AuM of $100 million at a firm charging a 1% management fee and paying 40% commission would equate to compensation of $400k. With AUM of $1 billion, a management fee of 0.5% and commission at 50%, the compensation for the manager would be $2.5 million.
Average pay for those in the wealth management sector is as follows:
| Position | Average Time In Role | Annual Compensation |
| Analyst | 1-2 Years | $80k – $100k |
| Associate | 1-2 Years | $90k – $120k |
| Relationship Manager | 2-3 Years | $150k – $500k |
| Senior Manager | 3-5 Years | $250k – $1 million |
| Partner | n/a | $500k – $5 million |
| Position | Average Time In Role | Annual Compensation |
|---|---|---|
| Analyst | 1-2 Years | £40k – £60k |
| Associate | 1-2 Years | £50k – £80k |
| Relationship Manager | 2-3 Years | £80k – £120k |
| Senior Manager | 3-5 Years | £100k – £200k |
| Partner | n/a | £150k – £1 million |
These figures are based on earnings at larger firms or within divisions of top banks, in financial centres such as New York or London. As you might expect, compensation at smaller firms or in other locations may be lower.
Most candidates will need to first possess an undergraduate degree from an accredited university. After this has been obtained, one of the most popular routes involves securing an internship with a reputable firm. This will provide the hands-on experience required to obtain the title of analyst. It may also be prudent to secure a handful of industry-recognized certifications.
Changing careers from a previous finance-related role (such as financial planner) could also be a possibility. As these individuals will already possess much of the basic knowledge associated with wealth management, it could be easier to change job titles. Some common examples include:
Of course, those with more experience in the world of finance will naturally be more likely to be hired by a wealth management firm.
One of the most exciting aspects of wealth management is that the learning curve never truly ends. This is why even senior-level professionals are always looking to increase their skill sets. A handful of certifications will provide opportunities for career advancement while simultaneously augmenting your talents.
Let’s take a look at 5 well-known programmes.
Obtaining a Certified Financial Planner qualification is highly valued in the wealth management sector. Potential clients also view it as an indicator of competence and it is recognized globally. If CFP is not your cup of tea, there are a few other online Masters degrees in financial planning or analysis from Kaplan that are good considerations too.
A CFA (Chartered Financial Analyst) is by far the most well-known certification to possess. In fact, an estimated 5% of CFA charterholders are wealth management specialists. The reason for this trend involves the fact that many CFA core competencies (such as portfolio oversight and financial planning) are the primary responsibilities of a wealth manager.
A Financial Risk Management (FRM) qualification is another relevant option to consider. Of course, one of the main intentions of any wealth manager is to mitigate the risks associated with a specific investment strategy.
A certified FRM will provide an even more detailed overview of such an approach. As a result, the professional will be adequately prepared to provide sound advice at the appropriate times.
A Chartered Alternative Investment Analyst (CAIA) is yet another possibility. Alternative forms of investment have become extremely popular in recent times due to their ability to provide a portfolio with a greater degree of stability. Therefore, those who attain a CAIA certification are highly sought after across the entire financial sector.
Environmental, Social and Governance (ESG) certifications are a final option to highlight.
ESG certifications are focused around issues such as compliance, transparency, moral advice, and corporate responsibility. It has even been shown that ESG-related investments tend to outperform traditional strategies.
So when it comes to managing client’s assets over the longer term, it’s clear to see how expertise in ESG investing is a valuable asset, particularly as ESG issues are expected to become increasingly important over the coming years.
The asset management sector is expected to see some quite significant growth over the next few years, with total AuM expected to grow to $145.4 trillion by 2025, up from $84.9 trillion in 2016.
This means that demand for talented wealth management professionals is likely to expand over the coming years, so there will likely be plenty of opportunities for the right individuals,
In terms of working in the sector, perhaps the most obvious observation we can make is the role of digital technology and the transition into hybrid work environments (particularly as a result of social distancing measures due to COVID restrictions). This also includes an increasing reliance upon financial software platforms, requiring professionals to become more familiar with such systems.
Notwithstanding a migration into the digital community, another issue involves a greater focus placed upon sustainable investment strategies in relation to wealth management. Not only may these provide a higher return on investment, but they have become attractive to an audience that is increasingly concerned about their impact upon the environment. Here are some other trends to highlight:
It will be interesting to see whether these observations come to pass and if they do, the effects that they will have upon the entire wealth management industry.
Although the perks of wealth management cannot be denied, there are still times when you might wish to take a different career path. What types of exit opportunities are available?
Similar to asset management, there are several options to contemplate for those looking to make a financial career switch. These include:
As touched upon earlier in this article, many wealth management specialists eventually decide to become freelancers, starting their own firms once they have accumulated the expertise and a solid client base. This will primarily depend upon your personal desires as well as what you are trying to achieve.
The sheer breadth of the wealth management sector is undoubtedly one of its most attractive qualities. Not only will you be provided with plenty of room for career progression, but a number of exit opportunities exist, too.
Some other reasons why this could represent an excellent career choice include:
Similar to any professional career, there are also some possible drawbacks to wealth management. These can include:
Weighing the benefits and possible drawbacks of wealth management is crucial if you hope to make an objective decision. Still, this career can provide a wealth of rewards if you are willing to make such a commitment.
We hope the guide above shed some light on a wealth management career. Do you think this career path suits you? Let us know in the comments below!
Meanwhile, here are related articles which you may find interesting:
The right set of headphones or earphones can really make a difference to an effective…
Finance certifications such as CFA and FRM are a cost effective way (compared to an…
Finance careers can be lucrative and open up a wide range of professional opportunities. However,…
Financial modeling is a critical skill used by people in a range of analytical and…
Whether you’re applying for an entry level financial position or looking to move into a…
After a long and hard job search, you’ve gotten yourself a job offer. Congrats! But…
View Comments
Im getting in to this and got hired today at wealth management as the administrative assistant!! I can't wait help build someone empire with them!!
what degree did you get? was it hard? and how was the job search process?
Wealth Managemnt feild is a excelent skilled peoples have plenty of oppertunities. Evarybody making the money but people don't know where they should invest or corporate leval mergers and aqusition and investment is a tough process. CFA ACCA , Risk Managemnt CAIA is the high quality proffession, Please understand and learn and observe Global Economics and Geopolitical conditions and kindly read the finance and World Economy artecles publishing by IIM, LSE, Oxford, Came bridge and Chicago School of Economics.
Thank you ....