Private Wealth Management

There is a lot to like about PWM, once you've built your book of business, and I know people in it (I also interned at Merrill Lynch PWM when I was in college). However, your success in the business is not based on the quality of advice you give or your degrees on the wall, it's based on your ability to bring in business. PWM is a sales job. Even at a place like ML, which is the top PWM for HNW, you must build your entire book yourself. Having a top 10 MBA means nothing (unless it helps you convince people to invest with you, which I guess is possible). In PWM, including at ML, you are not given any clients (I assume you know this). You start entirely from scratch. You will build your book by working your existing network and cold calling. It's very tough and very few people make it. At ML you must bring in $50MM in AUM within 1-2 years (again entirely own your own, they do not provide clients or leads). If you don't bring in this much business, you are fired. PWM is a job for later in your career when you have a large rolodex of wealthy people to call on. If you have the contacts and can build your book, then it's pretty cool. You are an advisor and confidant. You assemble portfolios, do estate planning, retirment planning, etc. You do not pick stocks. You assign money to various managers. You work pretty short hours and you make decent money.

I was told a very similar explanation. So do most join PWM after they are successful in a different industry? If so, which industry leads to great contacts? IB?

Any industry can lead to great contacts. You could be a doctor and make lots of rich doctor friends and there is the start of your book. You could be a lawyer with rich clients, rich lawyer friends, etc and there is the start of your book. The 2 guys I know best at ML were in commercial banking and consulting before switching to PWM.

I have a friend in Private Banking at a BB (not ML/BOA) and he has never made a cold/sales call. He works on a fairly small desk, but the MBAs that have joined the group are not second tier types. He basically acts as client liaison and decides how to allocate assets, determines the risk profile, helps construct portfolio, answers any and all questions/concerns of the client, etc. It's possible that they have a different group within the bank that solely focuses on asset gathering, but his group does none of it. It seems like a good mix of interpersonal skills as well as investment knowledge which pays good money and doesn't take 70 hour weeks.

I have heard that some banks divide the private banking and private wealth management groups. For example, private banking may only deal with individuals with AUM >$25M, $50M, or $100M and private wealth may deal with individuals between $5M-25M, with retail financial advisor types taking anything below $5M.

I would assume that you would like to have a different kinds of people working with a $10M guy and a $100M guy. The $100M guy is going to demand top-notch legal, trust and estate advice and he is probably going to have a very different investment strategy as well.

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As IHateTheGMAT said, PWM is a highly glorified term for a sales position (aka broker).