Personality Is Key for a Move into Wealth Management

For registered investment advisers recruiting from other financial sectors, finding the right skill sets and a service gene isn’t easy.


A help wanted sign hangs on the window of Gino’s Pizza in Miami Beach, Florida, Friday, August 5, 2005. U.S. employers added 207,000 workers in July, a bigger increase than forecast, and wages grew at the fastest pace in a year, suggesting companies are gaining confidence as the economy picks up speed. Photographer: Mike Fuentes/Bloomberg News

Mike Fuentes/Bloomberg News

In this post-Dodd-Frank environment, wealth management has come to the forefront of finance. The growing prominence of the sector on Wall Street has meant that as professionals from other areas of the financial service industry consider making a career transition, registered investment advisers (RIAs) can command compensation that is much more lucrative than in the past.

Fresh faces are sorely needed in the private wealth sector. According to a report released in January by the U.S. Bureau of Labor Statistics, employment in wealth advisory services is projected to rise 27 percent by 2022 as baby boomer advisers retire — necessitating financial expertise — and Gen Xers and older Millennials hit their peak earning years. This dwarfs the projection of 11 percent for the private sector as a whole. For independent RIA and family office practices, this increasingly competitive landscape is changing the game when it comes to finding new talent. (See also “Wealth Management Firms Look to Millennials for Growth.”)

According to Christian Wagner, CEO of $600 million wealth management firm EagleView Capital in Wilmington, Delaware, recruiting professionals from competitors has become prohibitively expensive. “The industry has painted itself into a corner as the cost of carry to recruit a successful team is no longer attractive,” he says. Wagner has been actively recruiting legal, insurance and trust professionals as well as buy-side Wall Street veterans to help expand the firm’s family wealth business. In his view, one obstacle to the firm’s recruitment efforts is that many senior-level players at major banks and advisory firms are lacking the skill sets and entrepreneurial mind-set necessary to flourish at a boutique firm. “A big issue facing the industry is that the really large wealth management firms have evolved into a culture of professional lunch eaters,” Wagner says.

But, as Mitchell Weiman, a financial professional making the transition to wealth management, can attest, “Wealth management is an extremely competitive business.” After 20 years spent as a high-yield debt trader and salesman at financial institutions, including New York–headquartered FBR Capital Markets and Miller Tabak, Weiman decided to make a career change and work with private investors; he was recruited by Bethesda, Maryland–based Sumner Financial Advisors earlier this year. Weiman says he was attracted to private wealth management because of the opportunity to build long-term, stable client relationships. So far, Weiman has found the registered investment adviser experience to be positive — but demanding. He reflects on the cultural differences: “On the institutional side of the business, you have to go in every morning and figure out how to make a living,” he says. “Institutions have short memories, and you are only as good as your last trade.”

Personal adaptability is important in making the shift from institutional to private wealth adviser. Alan Weiss, founder and president of Regent Wealth Management Group, a Woodbridge, Connecticut–based, fee-only private wealth management firm that manages more than $240 million, says, “The challenge is getting people that are the right fit for the long term.” Regent relies on external recruitment firms that use specialized tests to identify professionals with the right personalities to fit with the firm’s culture and client base. Weiss, who began his career as a certified public accountant, has also recruited professionals from outside private wealth advisory. According to Neil Kreuzberger, founder and president of San Rafael, California–based executive search firm Kreuzberger Associates, whereas many Wall Street professionals have the right professional skills for family office work, they also need to have the right personality. “I call it the service gene. Not everyone can work in an environment where a single decision maker can decide to pass on a deal that the team has been working hard on for weeks without frustration.” Kreuzberger adds that even in a multifamily office, there can be decision bottlenecks very different from those commonly faced by buy-side and investment-banking professionals.

Although large single-family offices can be among the least flexible organizational structures in wealth management, they do have one key advantage when it comes to recruiting. More and more, families are allowing their financial advisers to participate in investment profits through equity stakes in individual investments or synthetic equitylike participations in the firm’s profits. “Done correctly, with incentives tied to long-term performance, it can be a win-win, since it can be an attractive salary package for an otherwise unaffordable recruit,” says Kreuzberger. “The skin in the game for the employee keeps their interests aligned with the family’s.”


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