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Should You Be a Wealth or Investment Professional?

Both Wealth Management and Investment Management are highly specialised areas in the financial industry.  Although many enter into the industry yearly, few actually advise or manage money for clients.

 

A Small Team Managing Big Money

Global Investment Committee

Be it a Private Banker or a Portfolio Manager, Trader or Hedge Fund Manager, it takes only 1 to 4 person to manage the money or assets for clients.

The amount can range from as small as $10 Million to as large as $500 Million.  In rare cases, some do manage funds that exceed billions of dollars.

 

Many More in Settlements, Operations or Supporting Roles

For every 2 or 4 person team that manages millions or billions of assets, there are many more that provide critical supporting roles.

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Functions in middle-office or back-office roles such as settlements, operations, risks, or supporting roles such as legal, compliance and finance hire tens to hundreds of people to ensure the timely, accurate processing and reporting of financial transactions, including adherence to multiple regulatory standards.

 

Should You be a Wealth or Investment Professional?

Management Associates

The popular career aspirations is to be the person that is managing the money, deciding what to invest and where the money goes to.

But what really does a wealth professional do and what does an investment professional do?

As a Wealth Manager, he or she could be advising clients from basic financial planning such as what is the optimal way to manage debts & cashflow (especially real estate loans in Asia), managing and projecting income, savings and expenditure to achieve a sustainable lifestyle.

More specialized areas could be managing investments such as portfolio allocation or wealth structuring for succession planning, tax planning or asset optimisation.

The Investment Professional would be managing investments, driving returns while managing risks.  Since the investment universe by itself is complex, many investment professionals specialize in one area or one sector.

 

By Products, Asset Class, & Sectors

Investment Management is exciting but in reality, an arduous learning journey.  It is perhaps more difficult to get into (See below: What are the sectors to join).

But before you start choosing the sector to join, you might want to look at the investment products, asset class and sector coverage in the investment universe.

Investment Universe:

Products Asset Class Sectors
Stocks Cash Equivalents Financial
Bonds Equities Technology
Unit Trust Bonds Consumer
Foreign Exchange Commodities Industrial
Commodities Real Estate Infrastucture
Interest Rate Alternative Investments Telecommunications
Derivatives (Options, Swaps) Commodities
Futures Property
Structured Products Agriculture

 

What are the Wealth & Investment Roles?

Popular careers include Financial Advisor, Personal Banker,  Private Banker, Stockbroker and Analysts for various asset classes such as equity analyst or fixed-income analyst.

Many of the investment roles also exist in the Wealth Management industry.  For example, in many financial institutions that provide wealth management services, it is common to find either an Investment Advisor or Portfolio Specialist.

Example of Wealth & Investment Roles:

Wealth Roles Investment Roles
Financial Advisor Treasury Advisor
Wealth Manager Investment Advisor
Personal Banker Fund Specialist
Prority Banker Portfolio Specialist
Private Banker Equity Analyst
Insurance Specialist Fixed Income Analyst
Credit Specialist FX Analyst
Estate Specialist Commodities Analyst
Dealer
Stockbroker
Trader
Portfolio Manager
Fund Manager
Hedge Fund Manager

 

What are the sectors to join?

Banking, Private Banking, Fund Management and Brokerages are the most popular sector to join as they hire tons of fresh graduates every year.

Specialized sectors such as Family Office, Hedge Funds and Private Equity usually hire only very experienced professionals, and only a handful occasionally.

Wealth Management Investment Management
Banking Brokerage
Private Banking Fund Management
Independent Financial Advisory Asset Management
Private Wealth Management Hedge Funds
Family Office Pension Funds
External Asset Management Sovereign Wealth Funds
Insurance Banking
Private Banking
Private Equity
Investment Bank

 

Why are some sectors or roles extremely hard to get into?

Fund Management

If you ever imagine what billionaires are doing everyday, almost likely some of the top wealth & investment professionals are involved.

From providing capital management solutions to their companies, planning for the next IPO or managing their complex family assets that might span across different continents.

Be it confidential deal-making, investment decisions or for privacy and secrecy, the most reliable and trusted professionals do not place themselves in situations of possibly leaking or making unnecessary contacts with people who might be fishing for opportunities or information.  They thus keep their circle highly guarded and close.

On the other hand, most teams in Private Banking, Family Office, Boutique Advisory firms, Hedge Funds, Private Equity, Investment Bank work in extremely small team of 2 – 4 person, and are fully capable of managing hundreds of millions and billions of assets.  This means opportunities rarely come in.

And no one would ever easily entrust you a billion to manage, no matter how good you are.  In other words, even if you do get in, you either won’t be able to acquire large assets to manage or you might lack the expertise and experience to manage the enormous assets.

 

Can I learn and manage a more reasonable sum of money?

Financial Advisor

Even for the top wealth & investment professionals, many start their career by doing supporting roles in research, analysis or managing small assets as a Personal banker, Financial advisor or Investment advisor in Banks, Private banks, Brokerage or Fund Management firm.

They spend many years (5 – 15 years) building up their capabilities in both knowledge and expertise, chalking up valuable experience before they become the money manager.

And since everyone has savings, either more or less, and for institutions tens or hundreds of billions, the amount to be managed varies.  For consumers, the market are often classified as Mass Market, Affluent, High Net-worth and Ultra High Net-worth.  For non-consumer segment, it is classified as Institutional business.

Read More: Should you build a Career in Mass Market, Affluent, HNW or UHNW?

 

So which would you prefer: Be a Wealth or Investment Professional?

More Popular Questions (Coming Soon)

  • Which offers better career prospects?
  • Which earns lots of money?
  • Which allows you to explore further in your career?
  • Which roles are more fun?
  • Which roles requires lots more knowledge?
  • Which roles allow you to develop your career?

 



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