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Very large and dark cloud for private banking jobs

The Scorpio Partnership has produced its annual report on the state of the private banking industry, and it does not look good.

The fundamental problem is one of falling revenues and rising costs. In 2008, the average private banking cost income ratio was 72.4%, up from 63.7% the previous year.

This is leading to the suggestion that private banks might want to reduce headcount.

“A lot of money in private banks is spent on staff,” says Stephen Wall, a director at the Scorpio Partnership. “And a lot of chief executives in private banks don’t appear to have the level of knowledge of costs and expenditures that you’d expect from other industries.”

Banks like UBS and Citi are already trimming headcount in their private banks. Others are still merrily adding.

Barclays Wealth, for example, has been picking up disaffected UBS bankers and aspires to increase its AsiaPac headcount by 5%.

However, the Scorpio Partnership’s report suggests that the days of big private bank recruitment are now over: the industry expanded headcount by 6% last year and has little to show for it.

“I can’t see any bank in the present climate taking on people who don’t add to the bottom line,” says Simon Johnson, a private banking specialist at search firm Hutton Consulting.

Comments (5)

Comments
  1. I wonder when Mr. Johnson believes is the correct climate for banks to take on people who don’t add to the bottom line.

  2. when i worked in a private bank it was full of highly paid bankers hoping for the phone to ring and a deal to be offered from seedy middlemen (brokers) invariably based in makeshift offices in places like North Finchley.

  3. Is it possible to have an article on Wealth Managment that doesn’t indulge the endless self promotion of Sebastian Dovey and the Scorpio Partnership?

    They are a class apart in stating the bleeding obvious.

    I quote: “Banks like UBS and Citi are already trimming headcount in their private banks. Others are still merrily adding.” Genius! Do people pay for this kind of research…?

    Private Banking is not a complex business but seriously can we have some insight that is news worthy?

  4. Once – could you expand on that comment please? Not in PB and didn’t quite understand it. Many thanks.

  5. Fully agree with Big Yawn… it seems Sebastian Dovey is too often portrayed as having the monopoly of knowledge on the wealth management industry…. yet having met him… it’s quite the contrary.

    Anon, he means a lot of private bankers use intermediaries as a source of introduction to high net worth individuals. Once is right, a lot of private bankers use obscure offshore trustees or middlement as an avenue for introductions to individuals that can often labeled in the category of dodgy rich arms dealers et al…

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