Wealth management careers explained

If you want to work in an expanding part of the finance sector, where you will be judged on your ability to create long-term relationships rather than clinch one-off deals, wealth management is worth considering.

While the asset management sector is funded by investments from insurance companies, pension funds and other institutions, the money in wealth management comes from rich individuals. In its broadest sense wealth management employs not only private bankers, but also private client brokers, who help clients buy and sell financial products, particularly equities, and also advise on products to invest in.

However, the most demanding and sought-after roles in wealth management are typically found in private banking, based in established financial markets like London, New York, Switzerland, Hong Kong and Singapore. Private banking is a much wider service, focused not just on managing investments for rich people but also on helping them to expand their businesses and develop long-term strategies for protecting their family’s wealth.

“It’s a business that boosts longevity of client relationships through multiple generations, inter-mingled with the client’s business needs,” says Jullie Kan, managing director and vice chairman Southeast Asia, private banking Asia Pacific, at Credit Suisse. “Depending on the lifecycle of the client, private banking isn’t just limited to the client’s investment needs, but may include family wealth planning, life insurance and the educational needs of the next generation.”

It’s a business that boosts longevity of client relationships through multiple generations, inter-mingled with the client’s business needs

Private banks come in all shapes and sizes – some are divisions of large firms such as UBS or J.P. Morgan, while the likes of LGT and Pictet have a more concentrated private-banking focus. Most firms split their private banking teams into two units – ‘high net worth’ (HNW) and ‘ultra high net worth’ (UHNW) – according to their clients’ liquid assets. The thresholds vary between firms, but HNW people typically have at least $1m to invest ($5m at some larger banks), while the ultra category is usually for those with $30m or more.

“The client base generally represent the most influential and successful individuals: entrepreneurs, executives, sports and media stars, top accountants and lawyers,” says Dylan Williams, managing director, head of England and Wales at Coutts.

Most firms split their private banking teams into two units – ‘high net worth’ (HNW) and ‘ultra high net worth’ (UHNW)

And the client base for private banks is growing. In 2014 the number of HNW individuals rose 8.6% in North America, 6.3% in Europe and 9.7% in Asia Pacific, according to Capgemini and RBC Wealth Management. As Asia’s millionaire population increases – at 3.1m people it’s already overtaken that of Europe – private banks are now focusing much of the expansion on the regional wealth hubs of Hong Kong and Singapore. But it hasn’t been easy going. There are not enough bankers to meet demand and the costs of operating across different emerging markets means smaller firms face tight operating margins.

Within the industry, private bankers are more typically referred to as either ‘relationship managers’ (RMs) or ‘client advisors’, depending on the bank. As the name implies, RMs manage relationships, respond to clients’ requests, and sell products to clients. Some bank also employ investment professionals who manage clients’ money and recommend products, but RMs are increasingly taking on these tasks and the distinction is disappearing. Behind their army of RMs, private banks have technical product experts who tailor products to meet clients’ needs.

Like investment banking, private banking has undergone rapid change since the 2008 financial crisis. International efforts to curb banking secrecy led to more than 50 countries signing an agreement in 2014 that seeks to put an end to tax evasion. Meanwhile, large private banks are also making greater efforts to cross-sell investment banking services to private clients and are piling money into new online platforms to help manage client portfolios.