Where Should You Work if Your Client Gives You $100 Million?
If you are lucky enough to have your client, dearest friend or family member deciding to give you $100 Million to manage his / her money, where should you work in?
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While many advisors dream of this good fortune, unfortunately, your good fortune is about to turn into a nightmare (Especially if you had not grasp the fundamentals of managing money).
” your good fortune is about to turn into a nightmare “
Thoughts:
- What if you make a mistake?
- What if you lose $20 Million?
- Would the relationship be destroyed?
- Can the experts be trusted?
- What if there are crooks?
- Will your client be constantly harassed to help others with charity, donations or financial assistance?
- Will your client pull out the money suddenly?
- Will your client get a professional manager in to check on you?
- Is the $100 Million legal (in domiciled country)?
- What if their family members dislike you managing their money?
We look at where should you work if your client gives you $100 Million:
No. 1 You Don’t Have the Experience
You don’t have the necessary experience to manage the size of wealth ($100 Million). “Experience” can mean knowing how to manage large sums of assets of between $10 Million to $500 Million or knowing how to draw upon the best practices (and their failures) of wealthy families.
- How do you manage the money?
- Do you know how to invest?
- What are the investment possibilities?
- Do you know how to manage cashflow?
- Do you know what is liquidity?
- Do you know how interest rates can impact returns and risks?
- Do you know how to monitor the investments?
- In Asia, should you invest into Real Estate? What are the risks?
But this doesn’t means you can’t. The ones who suddenly had $100 Million probably had no idea how to deal with the money either.
For example, many ultra-wealthy families would set up private investment holding company or a family office. They will get their children, relatives, closest friends or closest professionals to start managing the funds. An easy way is to join a Private Bank.
UHNW clients prefer to get people to manage their mega wealth because few (including themselves) knows how to do it. It is better to work in teams than to only have 1 or 2 person knowing how to do it. If anything goes wrong or they need help, there are also more people who understand their situation, can work on the issue together and more resources to tap on.
Possible Starting Roles:
- CEO / CIO of Investment Holding Company
- CEO / Director of Family Office
- Private Banker
- Private Wealth Manager
No. 2 You Might Have Some Experience
Perhaps you have some finance background in the financial industry or banking. Or you might even have direct wealth management experience in advisory.
Having some experience is great. It gives you a head start but also gives you tremendous headache.
” How long does it take for you to set up one? “
Those things you thought you knew will be severely tested, and because you have more options, and you might have little idea how it will be like, until you actually get there.
Examples:
| By Industry | Banks, Private Banks, Private Wealth, Boutique Advisory, External Asset Management, Family Office, Brokerage |
| By Job Titles | Financial Advisor, Priority Banker, Private Banker, Private Wealth Manager, Family Office Advisor, Chief Investment Officer, Chief Executive Officer, Portfolio Manager, Fund Manager, Investment Manager, Remisier |
More Headaches:
- How long does it take for you to qualify and get in?
- How many firms are there you can join?
- How many should you visit before you decide?
- How long does it take for you to set up one?
- Do you need supporting colleagues (team members)?
- Will your client accept your recommendations after all the work?
- Will you client change their mind last minute because they had a backup plan?
- Do they get influenced easily by their friends?
No. 3 You Have A Lot of Experience
Do you already have a network of Private Bankers, Chief Investment Officers, Fund Managers, Hedge Fund Managers, Investment Bankers, Private Equity Partners, Lawyers, Business Brokers … ….
If you have all these, congratulations. All you might have to do is to just build the infrastructure or join the infrastructure, get the regulatory licenses and decide your business model.
Possible Roles
- CEO of Investment Firm / Capital Management Firm
- UHNW Private Banker
- Private Wealth Manager
- External Asset Manager (EAM)
- Single Family Office (SFO) / Multi-Family Offices (MFOs)
But what if you have a lot of experience, but forget to build all these network, don’t know how to or just simply do not want the enormous pressure and responsibilities?
You can still proceed with all the options, by partnering and working within their area of expertise.
Most Private Banks and Private Wealth Firms have ready-tailored made solutions while EAM and MFOs provides a wide variety of possible solutions. For Investment firms or SFO, you will have absolute full control on the decisions.
Quick Guide:
| Quick | Understanding | Customized | Control | |
| Private Banker, Private Wealth Manager | Very Quick | Easy | Yes | Depends |
| EAM, MFO | Quick | Not so Easy | Yes | Very Much |
| SFO, Investment Firm | Depends | Depends | Limited by Your Imagination | Full Control |
* Easy – Referring to someone with a lot of experience
** Depends – Referring to how complex or simple you want the setup to be
So where should you work in? If you make a decision, you will likely be there for 3 to 10 years, or perhaps forever. How many 10 years do you have? How should the wealth be managed after you retire?
Fast Facts:
- 2,257 Billionaires in the world Hurun Report 2017
- 2,043 Billionaires in the world Forbes Report 2017
Probability of you managing assets for a Billionaire
- Every 2.7 in 10,000,000 if you follow Forbes Report 2017
- Every 3 in 10,000,000 if you follow Hurun Report 2017
If every Billionaire uses 5 UHWN Wealth Managers / Private Bankers:
- Every 1.3 in 1,000,000 if you follow Forbes Report 2017
- Every 1.5 in 1,000,000 if you follow Hurun Report 2017
- 12 Top Career Options for Private Bankers
- How do you Develop your Career as a Wealth Manager?
- Why Clients Struggle with Receiving Wealth Advice
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