9/8 Alumni & Faculty Panel Recap

We started off the school year welcoming back Professors Hbrook and Way, and Hayley Swaim from Austin Private Wealth! It was great to hear from them about the state of the wealth management industry and also to get an introduction to the subject for our newer members! We have posted the event highlights below.

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Speaker Backgrounds

• Hayley - works for Austin Private Wealth, which has about $800 million of assets under management

• Professor Holbrook - faculty member of McCombs' accounting department

  • Transitioned from working in investment banking to working in private wealth management within the same bank

What Is Wealth Management?

• 2 types of wealth management

  • Institutional wealth management

  • Private wealth management - this is more akin to the wealth management/financial planning we normally think of

• Wealth management is a bit more sophisticated than the term ‘financial planning’ suggests

• Wealth management is about asking - how do you build wealth, preserve wealth, and transfer wealth?

Wealth Management Career Timeline

• Hayley started working with a smaller practice where she was involved with client support (sitting in meetings, inputting client data into software)

  • 2-4 year time horizon for her from graduating to working as full advisor

  • Paraplanner - gets supporting data, prepares advisor for meeting with client, follows up on meetings with client

• Some people enter field through smaller boutique firms or through large banks

  • No longer model where you need to build your book of business - you now tend to work in teams doing lot of prep work for meetings with clients

• 3-5 years (like Hayley) is relatively short time to becoming an advisor

  • At bigger firms (like banks), it tends to be 10-15 years

• Schwab has a training program and you have the option of working with senior advisors or bringing in your own book of business

Smaller vs. Bigger Firms

• At bigger firms, it feels more like you are involved in account management

• Bigger firms have higher minimum wealth levels

• At smaller firms, you as a young individual have greater opportunities to work with clients on a more personal basis

• Banks/bigger firms are more likely to be able to offer more alternative investments to clients (ex. Hedge funds, private equity firms)

• Institutional wealth management is very quantitative, does not offer as many advisor facing roles

Alternative Paths Within Wealth Management

• Many people get CFP with no desire to go into the field

• Big banks also have large research departments to support the advisors

• People can also work in adjacent fields - ex. Insurance, actuary

• Some people also occupy roles like trading specialists

Personal Advice

• CNBC, Yahoo Finance, WSJ are recommended sources

• For young people with extra money, you should aim for about 10% of your income to be put away for retirement

  • For remaining money, try and split it up based on your nearest financial goals (ex. You want to buy a car in 3 years, you want to buy a house in 10 years)

Getting the CFP license

• Cost of CFP education is about $7,000

  • Try to get your employer to pay for this

• 3 steps to get CFP

  • Education

  • Test - about $10,000 cost

  • Experience

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