eFinancialCareers

Combining diplomacy with product knowledge.

As their name suggests, private wealth managers help very rich people to manage their money in private, far away from the prying eyes of the gossip columnists and paparazzi.

They fall into two categories:

• Private bankers – who 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 clients to develop a strategy for charitable giving, and advise them on bequeathing their wealth to the next generation.

• Private client brokers – who help clients to buy and sell financial products, particularly equities or stocks (hence the term 'stockbroker'). They also offer advice on the best products to invest in.

The clients of private wealth managers can be anyone from company chief executives to property tycoons, investment bankers, footballers, pop stars or members of privately-run family businesses. Private banks typically look for clients with at least $1m (£503k) to invest, but many deal only with clients whose financial assets (so not their houses or yachts) are worth more than $30m.

Key players

In strict private banking terms, Swiss companies such as UBS and Credit Suisse are the world’s leading brokers to the very rich. However, in broader 'wealth management' terms, which includes private client broking, the big US brokerage houses such as Citi and Merrill Lynch are big hitters, too.

Roles and career paths

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- ofice functions such as human resources or accounting.

People working on the investment side of private banking either invest their clients’ money themselves or offer their clients detailed advice to help them invest their own money. They are typically product specialists who are expert in a particular asset class, including fixed income, equity, structured products of any kind or investments in the private equity and hedge fund sectors.

People working on the relationship side are effectively sales people who spend their time cultivating links with clients and selling the bank’s services. This can involve a lot of travelling and close contact with interesting, unusual and demanding people. When a relationship private banker has established a client’s needs, investment specialists are brought in to put a more detailed solution together.

Meanwhile, private client brokers come in two kinds: those working on discretionary mandates, in which wealthy clients communicate their general investment strategy and the broker buys and sells the financial products they think appropriate; and those working on advisory mandates, in which the broker advises the client what to invest in, but needs their permission before making a move.

Junior brokers are more likely to work on advisory mandates. However, making the first move can be challenging, with few brokerage firms offering graduate training courses.

US banks such as Merrill Lynch, Citi and Morgan Stanley hire graduates onto their wealth management or broker training programmes.

Leading global wealth managers 2007
Assets under management
UBS: $1,608bn
Citi: $1,438bn
Merrill Lynch: $1,209bn
Credit Suisse: $642bn
JPMorgan: $465bn
Morgan Stanley: $450bn
Source: Scorpio Partnership

Banks such as Coutts (now part of Royal Bank of Scotland), Citi Private Bank, Barclays Wealth, Goldman Sachs, HSBC Private Bank and UBS all run graduate schemes for private bankers. A number of smaller private banks, such as Brown Shipley (part of Belgian group KBC), also run programmes.

Pay

Private bankers are normally paid on a combination of base salary and a bonus. According to recruitment firm Morgan McKinley, salaries for managers in private banking roles in the UK (typically with around eight years’ experience) start at around £80k. But when bonuses are added in, total pay will normally be about three times that.

The average European starting salary at intermediate level is around €50k, according to recruiter Robert Walters, with managers starting at around the €60k-€90k and moving into three figures after 10-12 years.

Skills

It is no good going into private banking if you have a taste for gossip. Discretion and an ability to manage, retain and build relationships with incredibly wealthy individuals is absolutely vital.

“The key to being successful in wealth management is to be good at building relationships. You must have the confidence to call people who you do not know, be able to strike up relationships, listen to clients and understand and interpret what they need,” explains Sarah Crawford, head of graduate recruitment for EMEA at Goldman Sachs.

An understanding of different cultures will help, too. “You will usually be working on a certain client desk that is for that country or region. So it is important to have the social and cultural knowledge that relates to those clients,” explains Corina Kathriner, head of graduate recruitment for UBS in Switzerland.

Click here to find out about global trends in wealth management.