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 their 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 ultra-high-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.
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 advisors’ 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.
In an industry built on relationships, it’s not surprising that one of the key attributes wealth managers look for is an ‘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 said
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,” said 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, said 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 changes,” she said. “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 most successful people in the world is another trait of a client advisor,” added Kwang.