Private wealth management
Private wealth management (also known as PWM or private banking) provides individuals (known as high net-worth clients) with professional advice and services that help them manage their finances as efficiently as possible. This can include financial planning, investment management and advice on tax, pensions, inheritance and family trusts.
So, how is private banking different from retail banking? The secret is in the word ‘private’ – this type of banking is tailored to the client and offers a much more personal, one-to-one service. This could include advising the client or investing money on their behalf.
Most private banks will offer two types of service: advisory or discretionary. With an advisory service, the client’s private banker will contact them about investment opportunities and the client will make the final decision before an investment is made. With a discretionary service, the client will have a thorough discussion with their private banker about the strategy they want to take – and then the bank will manage the client’s portfolio on their behalf.
Who is eligible to be a private wealth management client?
Historically, private banking has been the exclusive reserve of the extremely rich – those with financial assets of more than £10 million. Private wealth management for ultra high net-worth clients (with £30 million or more to invest) is still a significant industry. However, many private banks now welcome clients with anything from £500,000 of financial assets, and some high-street banks offer a specialist service for customers with £50,000 or more.
How does private wealth management make money?
Banks can generate revenue from their private wealth management businesses in several ways, including:
- charging a monthly fee for their services
- charging a percentage fee for their services, based on the value of assets under management (the most common arrangement)
- selling its financial products to the client.
Professionals working in private wealth management usually focus on one of three main areas: investing money, managing client relationships or support functions.
Types of graduate jobs in private wealth management
Professionals working in private wealth management usually focus on one of three main areas: investing money, managing client relationships or support functions. Traditionally, most private bankers once did both investment and relationship management – dealing with money matters and also building a personal relationship with the client – but in many organisations, these roles are now separate.
Investment
Those working in investment are specialists who may either offer expert advice to clients to help them make their investment decisions – or who may invest clients’ money on their behalf. They may also liaise with other product specialists at the bank, who can provide expert advice on particular assets.
Relationship management
The relationship side is essentially sales and marketing. Relationship managers develop and maintain good relationships with clients and sell the bank’s services. After a relationship manager has established the client’s needs, an investment specialist will come up with a more detailed solution. Work in this area involves frequent travel and close contact with clients.
Supporting roles
People working in support functions make sure that the business runs smoothly and that key activities are carried out in an efficient, controlled and timely manner. This could include compliance (ensuring that legal rules and regulations are complied with), operations, human resources or accounting.
Skills for graduate private wealth management jobs
Language skills are highly valued in private wealth management – in this highly international and client-focused business, being able to communicate in several languages can be a real asset. Other core skills that graduate recruiters initially look for are:
- excellent communication skills
- a strong focus on customer service
- an interest in the financial markets
- discretion and trustworthiness
- analytical skills.
