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How Do You Build a Sustainable Career as a Wealth Manager?

Wealth Managers need to deal with an uncertain economic and financial market such as fluctuating equities, bonds, foreign exchange rates and interest rates.

Add onto the wealth management responsibility includes keeping track of global political, tax & legal frameworks that could impact the financial well-being of clients, especially international clients.

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So, how do you build a sustainable career as a Wealth Manager? Will one crisis wipe out all the hard work you put in for 10 years and lose all the good faith and trust of your clients?

We look at how you can build a sustainable career as a Wealth Manager?

 

No. 1 What does a Sustainable Career Means to You?

Preparing for Interview
Preparing for Interview

What does sustainable means to you?

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What does sustainable means to you? Is it a stable career, forever? Is it a predictable revenue margins and above average returns for clients? Is it one that balances the interests of clients, firm’s and your interests?

More Questions to Ask:

  • Do you want to grow your career with clients?
  • Do you want to only target at wealthy and wealthier clients?
  • Do you want to share financial planning importance with clients?
  • Do you want to help clients grow their wealth?
  • Do you have the knowledge and expertise to help them?
  • How do you know if you know enough?
  • Do you want to be rich?
  • Do you want to quit after you making enough money?
  • Would a crisis or an economic boom change the way you look at wealth management?

Unlike many professional financial roles, Wealth Managers often have to choose between staying with their clients for many years or find more “ideal” clients.  A sustainable career means differently to different wealth managers.  What does sustainable means to you?

 

No. 2 Are You Providing Service or Advice?

Wealth Management Services
Wealth Management Services

It is hard to distinguish between providing Wealth Management service or advice.  Even financial institutions have a hard time understanding what they offer is a premium service or providing professional advice.

Knowing if you are offering a service or providing advice helps you to understand the knowledge and skills you need to build up as a Wealth Manager.

Service or Advice:

Questions to Ask Providing Service Providing Advice
 Can you execute the transaction?  Yes No
 Do you provide information, data and comparison?  Yes No
 Do you advice on most suitable products and solutions?  No Yes
 Do you provide updates?  Yes No
 Do you provide advice on possible changes & adjustments?  No Yes
 Is the outcome of the advice of importance to you in the future?  No Yes
Is the outcome of the advice a professional opinion of yours?  No Yes

 

Sometimes, the answers could be both a service and advice.  Wealth Managers are often responsible for the entire process, from educating clients to selecting suitable solutions, executing the transactions and follow-up service calls and adjustments to the portfolio, investments and financial plans.

There could be products whereby the Wealth Managers provide solely execution services either due to clients’ knowledge & prior experiences of the product.

There are other times when clients completely leave the recommendations in the hands of the Wealth Managers.  Some clients could be CEOs of Banks, Fund Managers or Private Bankers who already have deep understanding of the range of products and solutions.  Read More: 7 Things To Do When You Meet People Who Are Better Than You In Finance and Investments?

Considerations:

  • Are you better at providing excellent Wealth Management Service?
  • Are you better at providing excellent Wealth Management Advice?
  • Are you equally good in providing both Wealth Management Service & Advice?

 

No. 3 Clients First or Income First?

Banker in Deep Thought
Banker in Deep Thought

Should you or do you place clients’ interests first or your income first?

You can place earning an income first if you are selling basic insurance plans.  Basic insurance products are low-cost and somewhat useful.  It is a good necessity in a developed or developing economy as the cost of healthcare or death to a sole-breadwinner can be really expensive.

But in an under-developed economy, insurance is a premium product as many do not have a regular income.  Illness and mortality rates are higher, leading to higher moral hazard on bad claims on insurance policy.

clients’ interests or earning an income

For investment products such as Stocks, Bonds or Unit Trust, it is tricky to place income first.  Any sudden crisis may erode 30% – 50% of the money, thus clients may have to be made aware and educated on the risks of such investments.

But without placing income as priority, the financial institution may not survive business the following year and clients’ assets may be in jeopardy due to a financial collapse in the company.

Should you place clients’ interests or earning an income first?

 

No. 4 Safe or Risky Products?

Mutual Funds
Mutual Funds

Insurance business is a long-term one while Hedge Funds tend to be opportunistic and may also shut down anytime.  Insurance companies invest 10, 20, 30 years or beyond to provide sustainable and predictable profits and returns to policy-holders while Hedge Funds tends to drive larger returns due to discovery of investment opportunities that could drive better returns.

One is innately prudent while the other goes anywhere from low-risks, high-risks and neutral-risks.

As a Wealth Manager, should you build your clients and portfolio like a Insurance Company or a Hedge Fund?  Should you go for safe products or should you build your Wealth Management career around risky products?  Or should you do both?  Which gives you a more sustainable career path?

 

No. 5 What is Your Expertise?

Private Banking
Private Banking

Many clients go to a Wealth Manager and conclude that money matters is now in the good hands of Wealth Managers.

Pay a fee and collect the returns for investments

  • Pay a fee and collect the returns for investments.
  • Pay a fee and have a strong financial plan that will lead them to financial freedom.

While Wealth Managers have the required professional knowledge, access to financial products, instruments, information and platforms to better navigate and execute a strong wealth management plan, you are not able to forecast the future. So knowing your area of expertise (s) allows you to equalize or match clients’ expectations on what you can do:

Examples of Wealth Management Expertise:

  • Financial Planning
  • Portfolio Allocation
  • Investment Management
  • Asset Management
  • Risks Management

 

No. 6 Building Trust & Relationships

Having trust and relationships are important.  But what if the trust and relationships with clients are broken when financial products face systemic risks, product failures and missed expectations.

Wealth Managers have to be cognizant and savvy about global economic and financial affairs, as well as review products and institutions’ risks and management.  A bad move change clients’ relationships with you and for the worst.  Other financial advisory firms would be ready to pounce on your mishaps, taking your clients right under your nose.

 

No. 7 Inflationary Environment

Wealth Management only works in an inflationary era.  In other words, if the global economy or region sinks into a long-term recession or depression, many wealth management services might be shut down due to lower fee income and expensive infrastructure.

These basic economic trends impact the the sustainability of a wealth manager.

Will one crisis erase all the hard work you put in for the last decade ?

How would you build a sustainable career as a Wealth Manager? Will one crisis erase all the hard work you put in for the last decade and lose the good faith and trust of your clients with you? Is better knowledge, good advice or good service the key to a sustainable career as a Wealth Manager?

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