7 Interview Questions You Need to Nail to Work in Wealth Management

Published: Oct 05, 2015

Topics: Finance Interviewing Job Search MBA

With banks like Morgan Stanley and Credit Suisse focusing more and more on wealth management as opposed to traditional investment banking, jobs in wealth management (also known as private banking or private wealth management) are becoming more and more prestigious and lucrative. As for interviews at most wealth management firms (or at units of bigger banks), you should expect to receive thoughtful, structured questions and expect that your answers will be scrutinized carefully.

As with most Wall Street interviews, you can also expect a series of very general questions such as "Why do you want to work for this firm specifically?" and "Where do you see yourself in five years?" And you’ll certainly be given some situational questions unique to wealth management, which typically include several questions that test your knowledge of financial markets and ability to deal with clients.

To that end, below you'll find seven of the more common type of finance and client questions that wealth management firms will ask in interviews. And if you can handle these with confidence, you'll have a very good shot at landing a challenging and lucrative, wealth management position.

1. Where do you see the markets going this year?
Time to drop the touchy-feely bit and talk nuts and bolts. Show that you’re keeping up with the markets, reading the Journal and watching something more on CNBC besides Jim Cramer. And don’t just talk about stocks, mention bonds, cash investments, commodities, overseas markets—anything you can reasonably discuss without getting in over your head. Also, be sure to discuss the economic underpinnings of it all, such as consumer spending and the Federal Reserve’s interest rate policy.

2. The Powerball’s up to $25 million. What would you do if you won?
This question is designed to see just how well you’ve done your homework on private wealth management. Be honest about your own personal experience—if you’re young and single, then feel free to say you’ll get a nice Central Park apartment, but also note that you’ll need to plan for a (hopefully) long life with a good balance of stocks and bonds that can be adjusted over time, and throw in some philanthropy. Then go on to say how that would change once you got married and had kids, especially with college costs these days. Talk about creating trusts for the kids, planning for your estate, and taking care of your elderly parents. In essence, project yourself over time and cover those bases. You don’t have to get too technical or discuss individual products, though mentioning the company’s flagship product may be a good move. However, avoid the temptation to get too detailed and, as a result, get in over your head.

3. How are your parents doing on their retirement savings?
Again, be honest. If it’s just a 401(k), that’s fine. Talk about how you’d balance that in this market, and revisit it again next year when the market turns. You should also discuss whatever other products or investments they have, and feel free to mention what you wish they had.

4. What’s the most important trait for a private banker to possess?
Here’s where they separate the wheat from the chaff. Protecting capital while maximizing returns based on a risk profile is an OK reply. Being an advocate for your client is a far better answer. These firms exist for, and because of, the client. The term “customer service” doesn’t even begin to come close to the kind of attention, advice, and advocacy clients expect. A client-centric answer will serve you far better than a financial one.

5. You propose what you believe is a very strong investment opportunity to your client, but he balks. What do you do?
Anybody who keeps on with a hard sell is heading in the wrong direction. Given that you think this opportunity fits within the client’s overall strategy, disagreements like this should lead to a review of the client’s goals. Maybe he’s changed his thinking in recent weeks or months, in which case you’ve gleaned important information about your client’s needs. Maybe the client simply doesn’t see how the opportunity fits into his strategy, and a review of goals and strategy could help him see it in a more positive light. Ultimately, however, when it comes to this kind of “optional” opportunity, it’s the client’s call. It can be revisited in the future if you feel strongly about it, but for now, if he’s not buying, let it go.

6. You believe very strongly that your client should hedge against risk in his portfolio through a certain vehicle, but your client is interested in something else that may run counter to his long-term goals? What do you do?
The difference between this question and the last is deceptively profound, as this is structured as a far more important issue than a simple chance to make a buck. Once again, differences should be taken as an opportunity to review those long-term goals, and the pros and cons of the competing approaches should be explored in detail. You should be unafraid to say that this is a bad idea. You may also want to put your client in direct contact with the appropriate specialists at your firm, like the market strategist, so they can get a second opinion. In this case, the decision might cost the client, but as long as it’s not going to ruin him, you may have to reluctantly go along with it, then start planning the exit strategy—or the recovery strategy.

7. Your client wants to do something exceptionally ill-advised, like pouring all his money into a company that is, at best, a high-risk venture. What do you do?
Once again, start with the goals and review. Bring in the specialists as needed. Try to find some alternative plans of action that may satisfy whatever it is that prompted the move, yet would at least preserve more capital. Yet again, you can’t stop someone from ruining themselves if they want. In this case, though, ensure that the client has discussed the move with all affected parties, including his family and anyone who may have a financial stake in the move. Express your opinion freely to all of them. If the client still goes through with it, get the exit strategy in place and, ideally, get the client to sign off on it right away, so that the losses are minimized as much as possible.

The above was adapted from the new Vault Career Guide to Wealth Management.

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