A GRADUATE GUIDE TO...Wealth management

As their name suggests, private wealth managers help very rich people to manage their money in private, far away from the prying eyes of the gossip columnists and paparazzi.

They fall into two categories:

· Private bankers - who help clients invest their money wisely and avoid any risks that might reduce the value of their assets. They also offer tax and pensions advice, help clients to develop a strategy for charitable giving, and advise them on bequeathing their wealth to the next generation.

· Private client brokers - who help clients to buy and sell financial products, particularly equities or stocks (hence the term 'stockbroker'). They also offer advice on the best products to invest in.

The clients of private wealth managers can be anyone from company chief executives to property tycoons, investment bankers, footballers, pop stars or members of privately run family businesses.

Private banks typically look for clients with at least $1m (503k) to invest, but many deal only with clients whose financial assets (so not their houses or yachts) are worth more than $30m.

Key players

The world's biggest wealth managers all saw the assets they manage shrink throughout last year, in some cases by over 25%. The merger between Bank of America and Merrill Lynch knocked the already beleaguered UBS from its long-held top spot.

Roles and career paths

If you work as a private banker, you can expect to perform one of three broad categories of job: investing money for existing clients, building relationships, or managing back-office functions such as human resources or accounting.

People working on the investment side of private banking either invest their clients' money for them or offer their clients detailed advice to help them invest their own money themselves. They are typically product specialists who are expert in a particular asset class, including fixed income, equity, structured products of any kind, or investments in the private equity and hedge fund sectors.

Those on the relationship side are effectively salespeople who spend their time cultivating links with clients and selling the bank's services. This can involve a lot of travelling and close contact with interesting, unusual and demanding people. When a relationship private banker has established a client's needs, investment specialists are brought in to put a more detailed solution together.

Meanwhile, private client brokers come in two kinds: those working on discretionary mandates, in which wealthy clients communicate their general investment strategy and the broker buys and sells the financial products they think appropriate; and those working on advisory mandates, in which the broker advises the client what to invest in, but needs their permission before making a move.

Junior brokers are more likely to work on advisory mandates. However, taking the first step can be challenging, as few brokerage firms offer graduate training courses.

Pay and rewards

Private bankers are normally paid on a combination of base salary and a bonus, with the latter often outstripping the former at the senior level.

Last year was a very good one for Middle East private banking pay. A managing director working in CRM position in a global bank brought in an average total compensation of $664k last year, according to a salary survey by headhunters Napier Scott. $372k of that was in bonus payouts.

It's not too bad lower down the ranks in private banking either, with executive directors bringing in an average of $504k, and directors earning $365k.

Skills and attributes

It is no good going into private banking if you have a taste for gossip. Discretion and an ability to manage, retain and build relationships with incredibly wealthy individuals are absolutely vital.

"The key to being successful in wealth management is to be good at building relationships. You must have the confidence to call people who you do not know, be able to strike up relationships, listen to clients and understand and interpret what they need," explains Sarah Crawford, head of graduate recruitment EMEA, at Goldman Sachs.

An understanding of different cultures will help too. "You will usually be working on a certain client desk that is for that country or region. So it is important to have the social and cultural knowledge that relates to those clients," explains another wealth management graduate recruiter.

This article is adapted from eFinancialCareers' 'Careers in Banking and Finance 2009/10', which is available free as a PDF download here