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Wealthy people come from all walks of life and make their money all sorts of ways. Some are doctors or lawyers, and others are small business owners operating roofing businesses or a chain of dry cleaners. Some inherited their wealth, and others are corporate middle-level executives who've saved and invested, making millions in the process until they became rich. Others are young multi-millionaires who’ve become wealthy by founding and selling the latest hot tech startup. And yet others are high school dropouts who started their own companies, eventually selling them for handsome sums.
Regardless of their backgrounds, though, the wealthy have various asset management issues that are different than the average Joe's with a 401(k) and a few hundred stock options in his company. To address these more complex asset management issues, the financial services industry has created private wealth management departments that offer a host of products and services for the very wealthy.
Private wealth management, also called private banking, is a specialized branch of the investment community that provides one-stop shopping for a whole host of products and services needed by wealthy folks—typically defined as those who have liquid assets of more than $1 million (not including the value of one’s primary residence). But the most prestigious private banks and wealth management firms, such as those attached to major investment companies like Citigroup or Goldman Sachs, have much higher minimums, more than $5 million in some cases, and cater to the richest of the rich.
Private wealth managers, sometimes known as personal bankers, are the key players in this industry, but the wealth management industry also need legal, compliance, marketing (including social media), computer security, and office and tech support workers.
A bachelor’s degree is the minimum requirement to work in most wealth management positions. Wealth managers have bachelor’s degrees (and sometimes advanced degrees) in finance, mathematics, financial planning, economics, business, financial engineering, or quantitative finance. Other wealth management professionals have degrees in computer science and programming (tech support workers, database administrators, etc.), marketing (marketing professionals), or business administration (office managers).
Wealth managers with one to three years of experience receive salaries that range from $50,000 to $70,000 or more, plus bonuses. Those with three to five years of experience earn $62,000 to $85,000. Experienced wealth managers who generate strong profits for their employers can earn $500,000 to $2 million or more (including bonuses).
Wealth management firms are located throughout the United States. Most are headquartered in major cities. There are also opportunities throughout the world. Total assets under management (AUM) reached a record $74 trillion worldwide in 2014, according to The Boston Consulting Group, a professional services and consultancy firm. The top 10 global operators (led by UBS, Morgan Stanley, Bank of America Merrill Lynch, and Credit Suisse) in terms of assets under management collectively manage 47.1 percent of the entire wealth management market, according to the Global Private Banking Benchmark 2015 report from Scorpio Partnership. Assets under management for the 200+ industry players that are annually assessed for the report grew by 3.4 percent from 2013 to 2014.
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