Private Wealth Management (PWM)

Private Wealth Management (PWM) Definition: Private wealth management is the division of a bank that provides financial and investment advisory services to high-net-worth (HNW) and ultra-high-net-worth (UHNW) individuals and families in exchange for fees on the managed assets.

The definitions of “high net worth” and “ultra-high net worth” vary, but as rough guidelines:

• High Net Worth: An average net worth of $5-10 million USD, with a minimum of $1 million.
• Ultra-High Net Worth: An average net worth of $20-30 million USD, with a maximum of around $100 million.

People often use the terms Private Wealth Management (PWM) and Private Banking (PB) interchangeably, and we tend to do the same on this site. But the technical differences are:

1. Work Focus – PWM focuses on managing clients’ investment portfolios, while PB has a much broader scope.
2. Net Worth – PWM is open to a much broader set of clients; the minimum net worth might be a few hundred thousand USD rather than $1-2 million or $5-10 million.

Many students use PWM and PB internships as springboards into corporate finance roles, such as investment banking, while others decide to stay in the field and work their way up to the top.

We cover the main recruiting tips extensively in the “Recruiting and Interviews” section of the Private Banking article, so you should refer to that.

In short, interviews tend to emphasize breadth over depth, and you should know about the markets, portfolio management, different asset classes, economics, why this firm, why this industry, your strengths and weaknesses, etc.

They will not ask you to build a 3-statement model or DCF or even walk through them, and the technical questions common in IB/PE interviews will not come up.

Questions tend to revolve around how you might advise clients to invest their portfolios, how you might win new clients, and which asset classes you might recommend based on a client’s goals.

The process itself is straightforward: network and apply online, do an initial HireVue or phone screen, and then do in-person interviews.

The main difference is that it moves far more slowly than the IB recruiting process and requires far less preparation work in advance.

You should refer to the “Day in the Life” section of our article on Private Banking for all the details, but in short:

• At the junior levels, expect to spend a lot of time reviewing client accounts, researching the markets, attending client meetings, and doing some “lead generation” (AKA cold calling and cold emailing) via LinkedIn and corporate websites.
• If you’re on the investment side rather than relationship management, you’ll spend more time running analysis on client portfolios, suggesting different allocations, and simulating the returns from alternate allocations.
• At smaller firms that cater more to UHNW clients (the very wealthy), expect more “ad hoc” requests and last-minute emergencies, but also more interesting work in some cases.
• Compensation starts at around $100K – $150K USD, and rises up to the $500K – $1 million range for MDs and Partners, with some earning above even that, if they’re at the right firm with the right client list.

On average, it’s a 50 hour per week job, so the trade-off vs. investment banking salaries is clear: in exchange for greatly reduced hours, expect greatly reduced bonuses.

Private banking is best at the top levels when you have an established client list and plenty of underlings to do most of the work. Compared to an investment banking Managing Director, a PWM or PB MD has a much less stressful life and still earns a good amount.

They don’t have “blowout years” like some IB MDs do, but many people would take high-six-figure compensation in exchange for less stress and reduced hours.

Let’s not mix words: our courses are not at all geared toward private banking or private wealth management.

In general, you will not find many PWM or PB courses online because most of the work is very specific to clients’ needs and can’t be taught as a specific, repeatable process.

If you want training in this area, you’ll have better luck with general courses on topics like macroeconomics, the markets, trade policy, and different asset classes.

With that said, some of our Breaking Into Wall Street (BIWS) courses are applicable to parts of PWM and PB:

• IB Networking Toolkit – This may be useful if you need email and call templates for networking purposes in any field
• Excel & VBA – You still use Excel in many wealth management roles, and automating your workflow always helps
• PowerPoint Pro – You will spend a good amount of time making presentations to clients, and shortcut/macro efficiency always helps
• Core Financial Modeling – This provides an introduction to accounting, 3-statement modeling, valuation, and deal analysis; understanding the fundamentals could help if you ever analyze individual companies