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Why UBS and Credit Suisse aren’t offering big money to hire Asia’s best bankers

Money's not the main reason

Money doesn't matter so much

UBS and Credit Suisse are both all about Asian private banking right now. They need to hire more relationships managers (RMs) in Asia as they focus on capturing more assets from the region’s millionaires and billionaires.

But with just about every other bank looking to expand their Asian wealth units, are the two largest private banks in Asia by assets digging deep into their substantial wallets to lure candidates with big pay rises? Comments from UBS CEO Sergio Ermotti earlier this week suggest not. Bankers join UBS because of its…product platform.

“We are able not only to give a good platform to our colleagues, but also they are able to serve their clients with a very comprehensive offering,” Ermotti said during a call with analysts following the bank’s Q2 results. “So it’s not just about people being able to move from one bank to the other; it’s also being able to fulfil the expectations of clients there. I think that we have a superior proposition there and we continue to invest in it.”

Not about the money

Headhunters in Asia say both UBS and Credit Suisse don’t typically pay above-average salary increases to attract new RMs. “They pay competitively but compensation, though important, is rarely the deciding factor when moving to them,” says Clarence Law, a Singapore-based business advisor in private banking.

UBS and Credit Suisse offer salary rises of 15% to 20% to new recruits in Singapore and Hong Kong, which sounds substantial but is strictly within the average range in a talent-short sector, says Rahul Sen, a former private banker and head of wealth management at search firm The Omerta Group in Singapore. “You could get the same percentage at other firms,” he adds. “UBS and CS are quite stubborn – they are the big guns and they know they can attract good bankers without offering obscene salaries.”

The two Swiss giants have stricter salary bands than their smaller competitors in Asia, which can sometimes rule out even a 15% pay rise, says Sen. At UBS in Asia, for example, director-level RM base pay is usually capped at around US$250k so if you’re already earning close to that at your current bank, UBS is unlikely to offer you a big rise.

UBS and Credit Suisse won’t give you a large bonus percentage either. As we reported in our private banking compensation survey for Singapore, their average range is 8% to 12% – well below that of other private banks in Asia.

Product power

But while the percentage may be small, your bonus figure is likely to be competitive. “UBS and CS have more options for each product category and they have tier-one product support and platforms, which collectively can lead to more revenue generated to compensate for a lower bonus ratio,” says Liu Sanli, practice lead, private banking, at CA Search in Singapore.

“Ermotti is right about the product platforms at UBS being a major drawcard for RMs,” adds Sen. “At UBS an RM can create a structured product sitting at their desk, while at Standard Chartered you’ll need to ask four other people and it will take four days to get it done.”

Candidates are increasingly attracted by the investment banking products that Credit Suisse and UBS are encouraging RMs to offer entrepreneurial private clients, says Law. Credit Suisse’s client solutions group in Asia is pioneering the cross-selling of IBD products.

Beyond any product advantage, though, UBS and Credit Suisse enjoy better brand recognition in Asia than their rivals. “This makes joining them an easier sell for the banker’s clients and therefore for the banker,” says Law.

“Clients in Asia enjoy the prestige of being with the UBS or Credit Suisse brand – they are blue-blooded private banks who are making more and more money from Asian wealth management,” adds Sen. “The banks’ power to pull more clients is a key attraction for RMs, if they can get around any client duplication issues.”


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