As F. Scott Fitzgerald wrote in his 1925 short story, The Rich Boy, “Let me tell you about the very rich. They are different from you and me.” That’s true in many ways, including their money management needs. That’s where private wealth managers (PWM) come in.
What a PWM Does
A PWM works with high net worth and ultra high net worth individuals to manage their assets. High net worth is defined as a person or household with liquid assets valued at between $1 million and $5 million. Ultra high net worth is defined as a person or household with investable assets of at least $30 million.
These types of clients have complex needs. They may have properties and assets in multiple countries, may own multiple businesses, and could have diverse income streams. The more complex a person’s financial situation, the more complex their tax situation as well.
As such, they need more advisory services than a typical financial advisor like a certified financial planner (CFP) can provide. Part of what many PWMs offer is to coordinate with a client’s lawyer and accountant, almost like a financial concierge service. A PWM creates a financial plan alongside a client’s other financial professionals that considers all of these complexities.
Requirements to Become a PWM
Becoming a PWM is an arduous process. Most PWMs have a bachelor’s degree in finance, financial management, accounting, business, or economics. Some go on to earn a Master’s Degree.
There are two types of PWMs specific to wealth management:
- Master of Trust and Wealth Management
- Dual Degree Executive MBA in Asset and Wealth Management
While getting a degree, many aspiring PWMs will intern with a bank or financial advisor firm. After graduating, the next step for many is to earn a certification like a CFP, CFA, or ChFC, each of which has its own requirements.
Those with a Master’s Degree in finance, law, economics, wealth management, or a related field and five years of work experience can qualify as a Certified Wealth Manager (CWM). Candidates must complete the required coursework and pass exams to earn CWM certification.
Independent PWMs handling more than $25 million in assets must register with the SEC and follow SEC rules and regulations.
PWM vs. CFP
PWMs generally have more education, certifications, and specializations than CFPs, including tax and estate planning, and offer more sophisticated investment strategies that high net worth clients require.
While most people can benefit from working with a CFP, only high and ultra high net worth people require the services of a PWM.
Being a PWM
Working as a PWM requires a high degree of education and the ability to coordinate with other professionals to best meet the complex needs of sometimes demanding clients. Demand for PWMs is primarily found in larger cities, so the field doesn’t offer as much location flexibility as other financial fields. However, it can be a lucrative career for a talented wealth manager.
