The 텐알바 Bureau of Labor Statistics defines personal bankers and asset managers as financial advisers working for high-net-worth clients, and does not collect wage data for asset managers specifically. Private bankers advise clients on their overall financial needs and provide personalized services to help clients build, manage, and transfer wealth. Private bankers invest on behalf of individuals, whereas asset managers invest on behalf of institutions (and large groups of individual investors).
Private bankers manage an array of investments, called a portfolio, for those clients, using bank resources, including teams of financial analysts, accountants, and other professionals. Morgan Stanleys private wealth management firm, and the investment advisers at Bel Air, for instance, only work with individuals, families, and foundations who have $20 million or more of assets that they want to invest. Advisors working at financial investment firms or financial planning firms, or those working independently, generally make their money by charging a percentage of clients assets that they manage.
While traditional advisers generally charge between 1 and 2 percent of assets under management, the fees of robo-advisors are only between 0.25 and 0.89 percent of AUM. Generally, investors with less assets under management pay a higher proportion of their assets as fees. Since banks charge fees on a percentage of assets managed, targeting individuals with $200k to invest is not worth their time.
Wealth advisers, which typically handle larger families of clients, can actually charge lower percentage fees than a typical financial adviser working with smaller families. Financial and wealth advisers can be compensated either through flat fees or by a percentage of the value of the portfolios they manage. Typically, Financial Advisors charge either a flat fee between $1,500-$2,500 to create a comprehensive financial plan once, or approximately 1 percent of assets under management to manage an ongoing portfolio.
Wealth managers may offer any advisory services that they choose for a per-hour charge, ranging from creating a financial plan for you to execute yourself, to holding one-on-one meetings to discuss retirement planning, investment management, and more. The team at the firm will usually take part in making sure strategies are implemented based on the clients needs, as well as in coaching clients about the array of services a money management company may offer. In fact, the majority of time, the junior asset manager will talk with clients by telephone, meet with them personally, and possibly take them out for socializing.
If a junior asset manager is working 50-60 hours per week, it does not mean that they are sitting behind their desk all of that time. As a rule of thumb, I would say if you are not in a pure back-office role in a big, proprietary asset management firm, you are going to be tied down to your desk for 30 to 40 hours per week, and talking with clients, meeting clients, or going to events another 20 to 30 hours per week, when all is said and done. Weekends in a money-management job — even in the entry-level role — typically involve spending a couple hours each day going to networking events with clients, or hoping to meet clients, and doing a little bit of lighter housekeeping (e.g., cleaning your email inbox, etc.
While a MD in investment banking cannot really dictate how many hours they work – rather, has a lot of flexibility around when they work – in the realm of asset management, you absolutely can adjust the hours to match the kind of lifestyle you want to lead. The key difference between a financial planner and a wealth manager is that wealth managers handle literal wealth, whereas financial planners handle the finances of day-to-day clients looking to make it big. While a financial planner might simply provide guidance, a wealth manager can actively manage clients assets, returning the fiduciary responsibilities to their clients.
One of the core components to effective wealth management is building relationships, both with clients and other financial advisers and experts involved in the execution of a clients overall wealth management plan. Financial planners, financial advisers, and asset managers all offer clients financial guidance, including investment recommendations, but often, the lines that delineate the differences are nebulous and unclear. Many personal finance advisers devote considerable time marketing their services, meeting with prospective clients through seminars or participating in trade shows and social media.
Younger financial advisors, in particular, devote much of their time to customer acquisition during their first few years in their careers. Advisors track a clients investments, and typically meet at least annually with each client to keep clients up-to-date with potential investments, as well as adjust a financial plan depending on a clients circumstances or because an investment opportunity might have changed. Relationship managers manage existing client relationships and seek out new clients, while investment professionals manage clients portfolios, report performance, and research and recommend new products.
While this latter role is not necessarily the next stop in the chain, a Director of Business Development in a money management company plays a significant role in developing new client relationships and helping secure new business, while also helping maintain the great relationships between money management teams and their clients. While wealth managers may have areas of specialty on their own, they also coordinate services, bringing on needed experts, such as lawyers, accountants, bankers, and investment advisers, that bring in their skillsets to provide high-targeted solutions. To attract talent, asset management firms and asset management departments at larger institutions are effectively paying fairly high entry-level salaries in order to compete against other options in the financial industry.
According to a February 2006 survey conducted by Prince and Associates, a market research company that specializes in private wealth worldwide, average earnings for asset managers are twice those for product specialists and investment generalists, as shown in the following chart. An asset manager like Fidelity will invest funds from foundations, pensions, and similar institutions, and seeks a higher rate of return on endowment funds.