Need advice. I have an opportunity to take over a ~$500MM book of business from a senior FA at a top wirehouse (think Morgan, Merrill, UBS, etc.). Would work under him for ~3 years before starting the transition process (which is another 6 years before fully complete and he transitions out). The book pays him about $1.5MM annually. Sounds too good to be true, but I have some concerns, and would greatly appreciate any advice (continued in next post).

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His book of business is a bit older, with an average age of 60, and average account value about $5m (although varies widely). Growth is steady at about 8-10 new households a year, mostly through referrals.
This all sounds like such a fantastic opp, but concerns are as follows:
- Client acquisition is tough, and I worry about my ability to “close” new business once he exits
- Related to the above, I am concerned that the younger generation is not interested in paying fees for Wealth Management services (as evidenced by a lot of the advice on this app).

My other option would be to go for Partner at PwC, which is also not a guarantee, but I’d say more likely than not if I continue to grind.

What’s everyone’s thoughts on the long term outlook of both industries? What should I consider that I haven’t already?

How do you feel about the value proposition he’s developed with his clients? Why do they refer him?

I think there’s alpha, and there’s a “family CFO” role. They’re different services - I think the latter will be around for a while…

What type of relationships does he have with the beneficiaries of his older clients? Would it be close to a given that those assets would stay under your management when the existing clients die? What type of program does the firm have to transition clients from self-directed/robo products to wealth management once they reach a certain AUM threshold?

Client acquisition and maintenance would be my main concerns, but it sounds like your transition runway is long enough to build solid relationships.

I would ask the FA what capabilities he has or the bank enables around householding to understand assets held away, relationships with extended family members, etc. You’ll need to be several years or more ahead of those life events to have a decent chance of maintaining the AUM with the new account holders.

Obviously robo products are great for accessing the lower end of the market, but there’s still plenty of demand for wealth management and private banking services above a certain level, and it’s not like they want to turn away higher net worth customers.

Most of the wealth managers I’ve seen don’t have a great story around intergenerational wealth transfer, but most of them are trying to solve for it.

What are some other main uncertainties to you? Is the compensation and work life balance worth the risks - just general gut check.

Compensation and work life balance would probably be slightly better than consulting (when comparing to the Partner level). That’s offset by the fact that it’s likely a more risky move than being a Partner. I’d probably want to Partner up with another FA to share in profits as well as risk.

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