The role of a private wealth manager is about offering professional advice and financial services to high net-worth clients, enabling them to channel and manage their wealth as well as possible. There is 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. It takes the experience of many years to become an expert like Thane Stenner.
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 wealthy 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 in 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 members 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 afterward direct the client to a specialist depending on his needs.
Private Wealth Managers – What Leaders Know!
Advanced planning for affluent families requires a detailed discovery step to even reach the point where discussions about solutions can take place. Those discussions, which are most properly conducted with an ad-hoc team of appropriate professionals, can run smoothly leading up to comprehensive solutions and documents. Or, they can get stuck in the muck of egos and interpersonal politics, taking much longer to arrive at something resembling consensus.
Most private wealth managers have probably experienced more of the second variety, and they can relate many stories of the one member who derailed the team proceedings with his own need to control meetings. A team of experienced advanced planning collaborators, however, works thoroughly and efficiently, even as members engage in deep debates about the appropriateness of various solutions to particular client goals.
Leaders vs. managers
One central factor of successful teams is intelligent leadership, which is distinct from good management. “The leader’s job is to mobilize, focus, inspire and recharge the energy of the team they lead,” says Tony Schwartz, president and CEO of the Energy Project and the author of “The Way We’re Working Isn’t Working: The Four Forgotten Needs That Energize Great Performance.” “That’s as relevant if you have three people in a group as if you have three thousand. The qualities of a great leader are found first in the qualities of a great human being.”
Schwartz identifies three capacities for leadership that have direct applicability to advanced planning teams:
1. Leaders recognize strengths in others that they don’t necessarily see in themselves.
An estate attorney in New York with excellent interpersonal skills—and patience—was particularly good at explaining wills and trusts to less sophisticated clients who typically didn’t deal with financial and legal matters. An advisor who worked with him on client solutions greatly appreciated these strengths since he often had to explain the legalese and its implications to other clients when another attorney prepared the documents. Another way leaders demonstrate this capacity is by mentoring junior professionals, noting when they’re ready to observe, and perhaps even participate in advanced planning.
2. Leaders understand what drives others to a higher mission and sense of personal fulfillment.
Leaders are emotionally intelligent and know that how they make people feel directly influences how they perform. One extreme example is the efficient, but insensitive office manager who barks instructions to the staff, but doesn’t understand or even recognize the resentment this approach creates. In an advanced planning group, a leader acknowledges the contributions of each member to show that they’re valued.
The higher mission is often satisfied by the long-term financial security and risk reduction a good plan can provide for the client’s family and from fulfilling admirable philanthropic goals.
3. Leaders provide a clear vision of success and enlist everyone’s talents to achieve it.
No one likes to be micromanaged and a conference room filled with professionals with driven, Type A personalities is no place to start. The head of a small, but well-connected planning practice tried to dictate to the people in his firm and outside partners how they should do their work, in effect giving them assignments that he would then assemble into a plan. He was possessive of his clients and shared the minimum information. Rather than getting collaborative solutions, he essentially hired skilled professionals to do piece work.
Not surprisingly, this approach always led to strife and short-term working relationships. In a well-functioning team, members can express their views in an atmosphere that also encourages debate and allows for some wrong turns on the path to the right solutions.
A leader who clearly defines the deliverables from each person, then gets out of the way, creates a productive atmosphere that encourages active engagement.