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Interview with: Wealth Management Associate

What is your background?

I studied finance at UBC, and was in the PMF (portfolio management foundation) program.

How did you get into wealth management?

Vancouver has a large community of affluent people, so there is demand for private wealth management. I already knew my boss from the PMF (she is an alumnus), she had institutional experience and came to the retail side to manage her own book. She was looking for someone to do equity analysis, and thought I would be a good candidate.

What is the objective of wealth management?

The objective is to generate return for clients at a risk level they are comfortable with, and offer financial planning advice to support their lifestyle and retirement. The minimum portfolio size of new clients is generally $500,000, but it’s up to the manager’s discretion to make exceptions.  Investment style fit is really important. My team’s style focuses on fundamental equity analysis and has a long term horizon, so our client base is naturally younger than the industry average, because their investment horizon is long as they continue to work and save.  The firm also provides complementary will and estate services and insurance products for high-net-worth clients.

What candidates is the firm looking for in terms of education? (GPA, School Brand, Major)

Typically, associates in wealth management do administrative work, such as paper work, prepare marketing presentations, and sometimes cold calling. Education requirements for associates are relatively low – a bachelor’s degree in any faculty is sufficient, with no GPA threshold. Outside of formal education, attention to detail and personable are the traits that wealth management firms look for. However, as there are many more candidates than positions, the young associates hired tend to be overqualified.

What technical knowledge would be expected from a new hire? What technical questions would you ask?

Ability to work with technology systems and proficiency in Microsoft Office is expected for a new hire in wealth management. Most of the time, associates are not expected conduct research like in Capital Markets.

What is the career trajectory of an Associate?

You start as an Associate, a largely administrative role. The next title upgrade is the Associate Advisor role, which you get after completing your Wealth Management Essentials (WME) course. The details of your responsibilities and income are subject to discussion with your boss. If you are up for it, you can either become an Investment Advisor (IA) or a Portfolio Manager (PM), where you manage your own book and run your own business, with no ceiling on income. If your interest is in financial planning, you may be hired by the firm as a Financial Planner (FP)

What are some trends in the space and the industry?

  1. Moving from commission model to fee model. Commission model charges clients based on a percentage of transaction value (ie. IA recommends client to buy Apple, client accepts, IA trades for client and gets commission). Fee model charges clients a fixed percentage of assets under management (AUM) and is usually associated with discretionary asset management, where the PMs can make investment decisions for clients.
  2. Increasing number of ETFs and Mutual Funds, and private wealth management firms act as distributors for mutual funds.

What tasks do you do regularly throughout the year?

  • Trading securities when clients invest money or take money out
  • Researching investments – covering current investments or looking for new investments
  • Reviewing portfolio with clients
  • Meeting with prospective clients

What are your hours like and are they flexible?

My hours are normal (40hr/week) and flexible. During earning seasons, I spend about 50 hours a week. Most associates are 8am-4pm, depending on the team.

When people quit where do they tend to go?

All kinds of places – competitors, real estate, travel agencies, start-ups, there is no consistent theme.

Are the CFA or other designations helpful in landing a job? On the job itself?

For associates, doing the CFA exams prior to getting hired will probably make you overqualified, but may help you get the job.

For IAs and PMs, having the CFA designation builds your credibility; however, clients may not recognize the designation as many are relatively unsophisticated in Finance. At the end of the day, PMs who are able to generate good compounding returns will grow AUM organically by retaining existing clients and getting referrals. The industry seems to emphasize sales skills though.

If you want to go into financial planning, you will need your CFP (Certified Financial Planner) or other related designations.

What financial products do you deal with on a regular basis?

Equities, mutual funds, GICs and sometimes ETFs and bonds.

If someone has a non traditional background in Science/Engineering/Arts, how do they break into banking?

Just apply. If you apply through the firm, the threshold for education is relatively low. After your interview with corporate HR, you will have an interview with the advisor that you will be working with, that interview will be more relevant.

Networking is important in Finance overall. If you are lucky to have found an IA/ PM who is hiring and you are a good fit, it’s easy going from there.

What are the hiring cycles like? How many on cycle hires does your firm make? Off cycle hires?

If an IA needs additional help/ replacement, they hire off cycle. The firm may have a Competitive Recruitment program, students are hired in the spring time for a rotation program that starts in the summer, and they will be assigned to help whomever needs help.

Do you have any advice for anyone looking to breaking into wealth management?

To break into wealth management, start networking and applying. Go on LinkedIn, apply for available positions, or look for PMs or associates and ask them for a coffee or an information interview.

Wealth management is good business in the long term, but might be difficult in the short term. The biggest perceived threat to the industry is automated investing (robo advisors). However, robo advisors are not yet sophisticated enough to take account of non-quantitative information (family matters, other assets etc). Also, your perceived risk tolerance/investment objectives may not be your true risk tolerance, and it is difficult for a computer to tease that information out. In addition, picking stocks and industries is not a pure quantitative discipline, as understanding human behaviour (what executives are trying to do) is essential in understanding how companies and industries will react to macro trends. Overall, the wealth management industry is an exciting space, it is getting bigger as the wealth pie grows.

If you start working with an IA, you really need to know that person, as they have a large influence on how you will eventually run your own business (potentially “inherit” their book). If you become an IA/PM and start your own book, your salary will increase steadily and there is no cap.

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