Wealth management is a career path like no other. In many parts of finance, the goal is just to close a deal. But in wealth management, the goal is to build a relationship with a client that will last for decades. There are actually a lot of wealth managers who have worked with the same family for generations, as money is passed down from mom to dad.
Wealth management has a very different pay structure than, say, investment banking or commercial lending. If you work in this field for a few years, your pay will totally change depending on how well you do. This means that after a short time, you won’t get a base salary or much of one. Instead, you’ll get a share of the money that you manage.
This “eat what you kill” style of pay can bring in huge amounts of money, but it also comes with a very heavy responsibility. Your clients look to you to help them navigate toward their financial goals.
Unlike a hedge fund manager, your goal is not simply to maximize returns outright. Instead, your goal should be to get the most money back based on your client’s risk tolerance and what they think they will need in the future.
Since the end of the Great Financial Crisis (GFC), wealth management has grown faster than any other high-field. There are now twice as many wealth managers in the US as there were ten years ago. These managers work for both small businesses and big companies like Goldman Sachs.
The United States accounts for about 2054 percent of all wealth management activities. However, the growth rate outside of the United States, especially in Asia, has been over 8 percent per year for the past five years. It’s not too surprising that this is happening, since wealth is being built up very quickly in Asia, the Middle East, and Africa.
In the ten years or so since the Great Financial Crisis, one interesting trend is that traditional investment banks are trying harder than ever to grow their wealth management businesses.
In the past, investment banks like Morgan Stanley and JP Morgan paid less attention to the wealth management side of their businesses. The reason for this is that they usually need more people and pay less than sales and trading or investment banking. However, as rules have tightened over the past ten years, banks have seen the value in the steady fees that come from wealth management. Also, working with very wealthy (UHNW) or very wealthy (HNW) clients through wealth management can open up new business opportunities in other parts of the bank.
Wealth management has grown a lot because banks like these have hired more junior wealth managers, given new employees more training, and tried to quickly spread out their franchises. Click on some of these links to see how much these banks have talked about how their wealth management businesses are growing:
A common misconception is that breaking into the wealth management industry isnt overly difficult. Some mom-and-pop shops may make job offers to the top 30 percent of applicants, but interviews for bigger, more experienced players are getting tougher.
Why did I make this site? Part of the reason was that I saw a lot of people go to interviews without properly preparing and then not getting the job.
It’s not always hard to get ready for a wealth management interview, but you do need to know what the most common questions are and how to answer them (that’s part of the reason I wrote a book on the subject!). In the end, the most important thing is to write answers that show you know what wealth management is all about and want to work in the field for the right reasons.
My response to your message was blocked for potentially violating safety policies. I apologize for any inconvenience.
How have you prepared for wealth management?
In some finance jobs, like investment banking, the person interviewing you will know that you’ll probably only be there for a few years. It’s not really important if you know what you’re getting into as long as you can stick it out.
By contrast, wealth management is truly a career choice. As soon as you start working at a wealth management firm, you should plan to stay there for decades.
So many people think that the right answer to this interview question is to talk about the books they’ve read or the interview guides they’ve used, like the one I made.
When interviewers ask this question, they really want to hear that you know what you’re getting into with wealth management and that it fits with your personality and life goals.
Starting your answer with the fact that you’ve talked to current wealth managers, both new ones and ones who have been in the business for a long time, is the best way to answer this question. You should say that these talks opened your eyes and helped you learn about all the different parts of being a wealth manager, even the parts you don’t like.
Second, you should discuss your interest in markets broadly. Not just the equity market, but also FX, credit, commodities, and alternative investments. You should point to the resources youve used to keep up-to-date; whether that be the Wall Street Journal, Financial Times, or Bloomberg.
Lastly, you should say that you’ve given a lot of thought to what it means to be a wealth manager and whether you could handle the disappointment that comes with not getting the clients you wanted or the anger that some clients will cause. Of course, you won’t know how you’ll handle everything until you start, but it takes a lot of maturity and poise to show that you’ve thought about both the good and sometimes bad parts of the job.
But when you answer this question, you should always make it clear that you know what the job entails and want to build long-lasting relationships with clients. Helping them to reach their financial goals for themselves and their families.
Let’s say your client wants to invest in cryptocurrencies or a SPAC. What should you tell them?
Throughout 2021 and into 2022 nearly all wealth managers have been fielding calls from their clients who want to gain some exposure to either cryptocurrencies or Special Purpose Acquisition Companies (SPACs).
One of the trickiest parts of being a wealth manager is to temper your clients whims. In this case, I mean making sure that your clients don’t freak out when the markets are going down and don’t make bad choices when the markets are going up for no reason.
However, unlike a hedge fund manager, you can’t stop your client from investing in what they want (with very few exceptions). If your client really wants to do something, you can’t stop them, even if you don’t agree with them.
When clients want to invest in something that is getting a lot of attention and is going up in value quickly, it’s your job to play the “devil’s advocate” role. Gather research reports from other firms (or your own) and talk to your client about how these investments fit in with their long-term financial goals. This is the best way to do it.
A lot of clients tell their wealth managers that they’d like some of their money to be put into cryptocurrencies in case the stock market crashes. Then you can show them research papers that show how cryptocurrencies fell more than the stock market did in early 2020 and continued to fall in mid-2021 even as the stock market kept going up.
Likewise, with SPACs, you can explain the mechanism behind how they work and that ultimately you are at the behest of the SPAC sponsor who may or may not go out and find a good company to merge with. If they dont find a good company to merge with, you could just get back your initial investment (but will have lost out on the returns you could have had elsewhere).
Ultimately, to be a true wealth manager you cant just be a “yes man”. You need to be willing and able to gently push back. This requires understanding the temperament of your client. For example, if they get easily offended then you need to be careful in not dismissing their ideas outright.
For example, a lot of wealth management clients have investments in cryptocurrencies. But wealth managers make sure that these clients’ money is put into well-managed indexes that track the overall market and make it easy to cash out and file taxes. Also, many managers have put their clients’ money into SPACs, but they’ve made sure that the other parties are trustworthy and are putting a lot of their own money into any deal they find. They’ve also promised to find a deal in a reasonable amount of time, not years.
Financial Advisor Job Interview: Common Questions and Answers
FAQ
What should I prepare for a wealth management interview?
How do I prepare for a financial advisory interview?
Why do I want to work in wealth management?
How to prepare for a Morgan Stanley wealth management interview?
How can a wealth management advisor help you prepare for an interview?
Leveraging decades of experience, they deliver valuable advice to help you feel confident and prepared for your interview. Common Wealth Management Advisor interview questions, how to answer them, and example answers from a certified career coach.
How do you answer a wealth manager interview question?
As you’ve also probably noticed, the most important thing to do in all your interview answers is to understand what the question is really asking and answer that. In many of the answers above I’ve tried to demonstrate this. If in doubt, just remember what the ultimate priority of a wealth manager is: to serve clients to the best of your ability.
What makes a good wealth management interview?
Anticipating common questions and crafting well-structured responses is crucial to succeed in these interviews. Wealth Management is a highly personalised service that requires a deep understanding of an individual’s financial situation, goals, and aspirations.
What questions do you ask a private wealth manager?
The interviewer will also want to assess your experience, educational background and how you performed in past roles. Some of these questions include: Describe your experience in finance and wealth management specifically. What interests you about working as a private wealth manager?
