The financial services industry offers plenty of excellent careers opportunities, but many students and career-changers are unsure of which part of the industry to join. Here are various reasons for and against pursuing a career as a financial adviser in the private banking or wealth management division of a bank or broker-dealer.
It may be easier to get your foot in the door in the industry via private banking or wealth management compared to investment banking, hedge funds or private equity, because major financial services firms hire plenty of smart, outgoing people as financial adviser trainees. Most train them well over a period of several years. That said, it is a steep learning curve.
Finding your own clients is about 99% of the new adviser’s job. You need to build your book, starting with your natural market, that is, your peer group and relations. The firm likely wants accounts started with a minimum of $ 250k of investable assets.
Not all new hires start their careers on the same track. The traditional approach was the sole proprietor model, later joined by the team structure and advisers domiciled in bank branches.
Getting a job as a financial adviser gets your foot in the door of a large organization, which often has retail banking, investment banking, commercial/corporate banking and private banking operations.
Initially affecting only retirement accounts, the Department of Labor's fiduciary rule requires advisers to act under the fiduciary standard, not the suitability standard, which threatens the commission model and gives a boost to fee-only advisers. It took effect on June 8th, but its fate is in limbo due to scrutiny from the Trump administration.
Suppose a client defines professional money management as a portfolio aligned with their investment objective and risk tolerances that use ETFs and rebalances automatically. They want to pay the cheapest price possible. Today, there’s an app for that.
There are many professional certifications available, both relating to the role of financial adviser and other industry careers such as research. Many are costly and time-consuming to get, but some employers will pay for their employees to get them, and they will give your career prospects a boost.
The major reason people get into the wealth management industry is to make money. You must put up with lots of pressure and achieve hard-to-reach performance milestones to stay employed and eventually become successful. Assuming you don’t wash out, the rewards can be tremendous.
Bryce Sanders is president of Perceptive Business Solutions, a consultancy specializing in financial services client acquisition training, author of “Captivating the Wealthy investor” and a former director, sales manager and financial adviser at Merrill Lynch.
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