Interview Question: Why Wealth Management?

Being asked why you're interested in pursuing wealth management is one of the most common questions that you'll face in a wealth management interview.

In fact not only is it a common interview question, it will likely also be one of the first questions you are asked. So giving a persuasive, thorough answer is critical to starting your interview off strong. 

The reason why this is a question you will almost invariably face is because wealth management is a career that sounds fantastic on paper. You get to deal with interesting clients on interesting problems all while obtaining a great work / life balance once you're established.

However, wealth management is also an industry typified by its churn and burn nature. The vast majority of those who enter into the industry will exit it within just 2-5 years.

As I wrote about here, wealth management interviews have evolved significantly over the past five years or so. More focus - especially at private wealth management shops like Goldman Sachs - is being aimed at developing talent; giving more training, resources, and help to those just starting off.

Given this, interviewers have gotten harder as fewer positions open up due to lower attrition. This is all great news if you can get in, but getting in is likely harder than it ever has been in the past. 

On This Page

On this page we'll be going over the two kinds of rationales you need to utilize when answering this interview question. An example answer can be found at the bottom of this page as well. 

The Two Types of Rationales Your Answer Needs

The External Rationales

The Internal Rationales

Bringing the Two Rationales Together

Let's get started...

The Two Types of Rationales Your Answer Needs

In the past, giving an answer to "Why wealth management?" that just touched on the fact that you're extroverted, like dealing with clients, or like following the markets was more or less fine.

However, these days this question is really aimed at indirectly seeing if you understand what wealth management is and the kinds of people who are ultimately successful in it. 

Lots of people enter into wealth management who are extroverted, like dealing with clients, and who follow the markets closely. However, none of those things in and of themselves are signs that you'll succeed on the job.

The two types of rationales you need to include in your answer - which shouldn't take more than two or three minutes to get through in your interview - are what I call external rationales and internal rationales. 

A great answer to this interview question will have elements of both of these kinds of rationales included within it.

The External Rationales

I define an external rationale as being one that is about the nature of the job, not the nature of your personality

So, for example, an example of a poor external rationale that people frequently use when explaining why they're interested in wealth management is that they love following the markets (by which they mean the equity markets, normally). 

This is a poor rationale because there are many jobs within high finance that involve following the markets. In fact, nearly all of them do! Just saying you love following the markets does nothing to say that wealth management is better suited to you than being an investment banker, trader, or equity research analyst. 

Further, the job of a wealth manager at its core isn't just to follow markets. In fact, many wealth managers will rely on other folks who follow the markets more closely to help advise them on where the markets are at any given point and what major themes are driving them (especially in markets outside of equities, like in rates, credit, or FX). 

The external rationales that you bring up when asked "Why wealth management?" should revolve around how you enjoy coming up with creative, intricate solutions to the challenges that your clients face now and that they are liable to face in the future.

A strong answer will show that you understand that following and understanding markets is important to wealth management, of course, but its secondary to following and understanding your clients evolving needs.

Everything in wealth management begins with the clients and demonstrating that you understand that in your answer goes a long way to showing that you understand the distinction between wealth management and other roles within finance.

The Internal Rationales

I define an internal rationale as being one that is about the nature of your personality, not the nature of the job.

An example of a poor internal rationale, that folks will commonly use when answering this interview question, is that they are extroverts and love meeting new people.

That's all well and good. It's certainly true that generally speaking wealth managers will be extroverts that love meeting new people!

However, that's not invariably true. There are some phenomenal wealth managers who are quite introverted and attract clients who are similarly introverted. 

Your internal rationale - or perhaps said another way, your internal motivation - for pursuing wealth management should show that you understand the nature of the role and what makes it unique. 

An example of a good internal rationale is that you enjoy autonomy. Wealth management - regardless of the exact role you're applying to - will involve greater levels of autonomy than nearly any other job.

In many respects, the level of autonomy you have in wealth management is similar to if you were a real estate agent or insurance broker. You need to be proactive always and the buck will stop with you and only you. Showing you understand this will demonstrate implicitly why wealth management is so appealing to you over other finance-related jobs that involve much less autonomy. 

Another example of a good internal rationale is that you value the long-lasting nature of relationships that are inherently part of wealth management. Unlike other sales-oriented jobs, where the sales may be one-off, in wealth management you may spend decades working together to achieve their goals. In fact, many wealth managers deal with multi-generations of the same family so are truly an integral part of the client's lives and in sharping the financial future of their family. 

Bringing the Two Rationales Together 

A great answer to why you're interested in wealth management will bring both an external and internal rationale together.

This will show implicitly not only that you understand what wealth management is all about, but also why wealth management is right for you compared to other careers in finance or in sales generally. 

An example of an answer would be as follows:

Well, I think I would say two things: one about the nature of wealth management generally and one about my personality. First, wealth management interests me because it provides that capacity to help clients over the span of potentially decades while staying connected with markets, which is something I love following. Second, I value autonomy and being able to bet on one's self and obviously the nature of any wealth management role is quite autonomous.

So I think what wealth management really provides is the capacity to form meaningful, tremendously consequential relationships with people over decades by helping them reach their financial goals, while at the same time being able to operate relatively independently and sink and swim largely on my own merit (with the help of a great platform like this one, of course).

I think that wealth management is a singularly unique career choice that is probably not for everyone. However, I've talked to a number of wealth managers prior to applying for roles like this one and I believe that I have the interests, attributes, and most importantly the motivation to make a career in wealth management work for me and the clients I hope to one day serve.

As hopefully you agree, this kind of answer digs down deeper than many superficial answers people come up with. It gets to the heart of what attributes are most essential to the job and what attributes are most important for aspiring wealth managers to have (in order to put themselves in the best position to succeed). 

Obviously you don't need to use my answer word for word. You can come up with your own rationales, if you have some that are different. However, I would strongly recommend having both an external and an internal rationale and presenting both when asked this question.

As a final parting note I'd remind you to keep your answers to just 2-3 minutes at most. Remember that your interviews - especially for private wealth management interviews - will be 25-30 minutes in length with each interviewer.

You don't want to spend 30% of your interview talking just about why wealth management is right for you as that'll preclude getting into the other behavioral and technical questions your interviewer will need to ask. If you're looking for more wealth management interview questions - like the one we just covered here - then be sure to check out the wealth management guide. I put it together because there were no resources online aimed at those looking to break into wealth management, which is a shame because it is truly one of the best career choices out there (for the right person, of course).

Hopefully this has been helpful and let me know if you have any questions!

Leave a comment

Please note, comments must be approved before they are published