The field of private wealth management is about offering professional advice and finance services to high net-worth clients, enabling them to channel and manage their wealth as well as possible. There are a range of fields related to wealth management including investment portfolio management, financial planning, inheritance and trust management, pension/401k consulting and tax advisory among others.
In most cases, higher end investment firms, local lenders and banks that target high net-worth clientele, offer private wealth management services. This is by providing specialized services and accounting, which requires little input from the client i.e. comprehensive solutions that solve most of the client’s needs, with specialists at hand to handle any upcoming situations.
Within this field, there is also private banking, which is a niche created to offer tailored banking to a client directly, with one-on-one services such as directly investing money or giving cash advance solutions for a client as opposed to acting from an available reservoir of funds drawn from several accounts.
Who is a private wealth manager?
A private wealth manager dabbling in private settings may offer services of two kinds: discretionary or advisory. Advisory services include providing guidance and input on suggested actions to the clients, leaving them to make the final call. Discretionary service on the other hand involves action on the client’s behalf following some general direction, usually a written instruction detailing general guidelines on how to invest their wealth.
Private banking services have been engaged by society’s extremely wealth players i.e. those whose net assets are in the tens of millions of dollars and beyond. Among these, there are ultra-high value clients, whose net worth exceeds $50 million. However, many private banks are venturing out to manage clients whose net worth is as little as $1 million and even lower.
How does the private wealth manager earn?
As a private wealth manager, you can generate an income in three main ways. First, you will charge a monthly fee for your advisory or discretionary service. You may also make a passive income on your investments by selling your own products to the client. Finally, you can earn a commission based on the value added to the client.
As regards the monthly fee, some private managers base their feels on a percentage of the client’s assets or a percentage of the profits made for that client.
A host of opportunities is available for those looking to dabble into private banking. Conventionally, relationship management and investment consultancy are the most highly demanded jobs within private banking as well as the most common. However, there are also other services as outlined in the fields detailed above.
Those dealing with investment consultancy may do so in advisory or discretionary capacities. This is through liaison with other member of staff that have specialized knowledge in different investment categories.
Those looking into relationship management will mostly work under sales and marketing roles. The idea is to sell the bank’s services to the client and act as the first point of contact between the client and the bank then afterwards direct the client to a specialist depending on his needs.
About the Author: The author is a qualified investment banking practitioner, with a wealth of knowledge in different fields in the finance industry. He currently works with local lenders to offer cash advance solutions for small business owners.