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Private Banking/Wealth Management

The objective of private bankers is to provide a more personalized level of service to wealthy clients than is available to typical customers at a commercial bank.

The business has always catered to the world’s wealthiest people. Over the last several years, as the ranks of the wealthy have steadily expanded, many banks have refined their offerings to serve three distinct gradations of wealth.

At the top are “ultra-high net worth” clients – individuals or families who can invest $10 million or more. Some banks apply a still higher minimum, such as $30 million, to this category. This is the fastest-growing slice of the private banking market, and banks are pursuing it avidly.

Next comes “high net worth,” clients, typically defined as having at least $1 million in liquid assets to invest. Finally, there are the “mass affluent,” clients whose account balances add up to at least $100,000. This last group represents something of a grey area. While they usually don’t qualify for the full range of private banking services, many institutions still give them a degree of personal attention that’s beyond what ordinary account holders receive.

The main role of a private banker is to help clients manage their money. Traditionally, this involves helping them invest wisely while avoiding risks that might reduce the value of their assets. Private bankers also offer tax planning and pension advice, help clients develop a strategy for philanthropy, and advise them on estate planning. In one subset of the sector known as “Family Offices,” the bankers also perform tasks that range from screening solicitations for charitable contributions to making sure the client’s bills are paid on time.

A successful private banker needs an outgoing, service-oriented personality, plus the ability to carefully listen to clients. It’s a role best-suited to people who can observe other individuals and come to understand their needs. Their real talent is connecting with people who may have a lot of their wealth tied up in a fairly narrow activity, such as a successful family business, or who can be very demanding. In short, good people skills help.

As the array of potential investment products widens, the job of a private banker is becoming increasingly complex. So, private bankers need an understanding of financial products from basic stocks and bonds to financial derivatives, private equity and hedge funds. In most cases, the lead banker – who manages the direct relationship with a wealthy client – will be supported by a staff of experts who can address specific questions or needs as required.

Around the world, the wealthiest tier of people are getting richer, particularly over the course of recent bull markets for stocks and real estate. So, the private banking business is going strong. A study published in June 2007, by the Scorpio Partnership, a London-based wealth management consulting firm, found assets managed by private banks have surpassed $10.8 trillion worldwide.

Roles and Career Paths

If you work as a private banker, you can expect to focus in one of three areas: investing for existing clients, building relationships, or managing back office functions such as human resources and accounting.

People working on the investment side either invest their clients’ money or offer detailed advice to help clients make their own decisions. They are typically product specialists who are expert in a particular asset class.

People working on the relationship side are essentially salespeople who spend their time building connections with clients and selling the bank’s services. This can involve a lot of traveling and close contact with interesting, unusual, and demanding people. When a relationship banker has established a client’s needs, investment specialists are brought in to put more detailed solutions together. For clients who are very wealthy, the relationships are often entrusted only to experienced executives.

A decade ago, most private bankers combined the investor and relationship role. In some organizations, they still do. But in most banks, investors and relationship managers are now separate – another sign of the industry’s growing complexity.

Firms such as Goldman Sachs, HSBC and UBS run graduate training programs for private bankers. If you don’t find a place in one of those, it’s often possible to move into private banking if you have a background in corporate finance or, more particularly, fund management.

Having an MBA or majoring in business isn’t considered critical for a private banker. In fact, a diverse background can be an asset, because clients can differ considerably in their needs and personalities.

Skills and Qualities

– Discretion and trustworthiness

– The ability to build strong relationships with discerning clients

– Knowledge and understanding of financial markets

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  1. very helpful and encouraging for a novice.

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