A quick review of Wealth Management’s job…
In this article, Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023) explains what an Wealth Manager works on, on a daily basis.
What does Wealth Management consist in?
Private banking is a specialized advisory service offered by financial institutions to individual or institutional clients with substantial financial resources and assets. The clients targeted by this type of activity may be company directors such as Bernard Arnault or François Pinault. Clients may also be wealthy families who maintain and grow their assets through the solutions offered by private bankers.
To do this, institutions that practice private banking employ various experts who cover all the issues related to the optimization of an estate: private bankers, tax lawyers, asset managers and notaries.
What does a Wealth Manager work on?
As stated above, the Wealth Manager should be able to propose a property investment (such as the Pinel Law in France for example), an investment in traditional life insurance or even an investment in a private equity management company. The diversity of investment products can be very great, and it is therefore important for the Wealth Manager to understand his client’s needs in order to offer him the solution that is best suited to his needs.
This is particularly true in an independent wealth management firm but much less so in a division of a large bank with wealth management activities. Indeed, in an independent asset management firm, fund managers will have to invent new investment solutions. The private bank employees of a large bank, on the other hand, will only be able to offer products created by the bank to which they are attached.
For this reason, wealth management work varies greatly depending on the type of structure in which the wealth manager works. Indeed, the proportion of “commercial” work will be much greater for a “non-independent” private banker, since he or she will not be as involved in the construction and development of the solutions proposed. For independent private banks, the work of creating investment solutions and finding investment opportunities will logically be more significant.
What are the different levels of clients that wealth managers can deal with?
In this respect, four main levels of segmentation of high-net-worth clients can be distinguished, hierarchized according to the thresholds of assets managed by the firm or the private bank.
Upper Affluent : The Upper Affluent have assets between €100,000 and €1,000,000. In order to develop their wealth, these clients mainly turn to the so-called premium investment offers of retail banks or small independent wealth management firms.
High Net Worth Individuals (HNWI): High Net Worth Individuals (HNWI) have assets of up to €5,000,000. HNWIs generally make up a large proportion of the client base of both independent and non-independent private banks.
Very High Net Worth Individuals (Very HNWI): These are individuals with an estimated wealth of between €5,000,000 and €30,000,000. This very wealthy clientele is generally advised by the wealth management departments of independent private banks and private banks attached to the network banks. It should be noted that this type of individual constitutes the so-called “premium” clients of these departments.
The “above €30 million”: The most affluent individuals (with assets of over €30,000,000) are the main clients of family offices. They are external organizations of individuals related to a single family and advise them on all aspects of their wealth management. Family offices employ people who are often experienced and have a wide range of skills.
Related posts on the SimTrade blog
▶ Wenxuan HUMy experience as an intern of the Wealth Management Department in Hwabao Securities…
▶ William ANTHONY Working for a Private Bank
▶ Hélène VAGUET-AUBERT Private banking: evolving in a challenging environment
Resources
Youtube Top 20 Wealth Manager Interview Q&A
Youtube Natixis wealth management department’s website
About the author
The article was written in December 2022 by Louis DETALLE (ESSEC Business School, Grande Ecole Program – Master in Management, 2020-2023).