Credit Suisse is set to add hundreds of new bankers to its wealth management team in Asia and speed up the pace of its recruitment. But it won’t just be tapping experienced talent from rival private banks. Sector-wide skill shortages will force the firm to look further afield – mass-affluent bankers, for example, are likely to be moulded into relationship managers (RMs) serving Asian millionaires, say recruiters.
The Swiss bank announced last week that Asia has been earmarked for growth. Credit Suisse wants to cross sell more investment banking services to entrepreneurial clients in a bid to grow net new assets for its Asian private banking business from around CHF15bn ($16bn) today to CHF25bn ($26bn) by the end of 2018.
Over the same period the bank says it also wants to add more than 270 new RMs in Asia, taking its headcount to 800 from 524 currently. Credit Suisse has grown its Asian RM workforce by just 124 since 2012, according to bank figures, so its new plans demand that it recruits at more than double its previous three-year rate.
In the context of front-office Asian private banking this will be challenging. While Asia is the fastest growing region for private client wealth globally, there are only about 4,000 RMs in Singapore and Hong Kong combined across all banks and that number has been inching up by about 5% over the last few years, says Pathik Gupta, head of Asia Pacific wealth management at consultancy McLagan. “It’s very difficult to find new RMs in Asia given that every wealth management firm is on an aggressive hiring drive,” he adds.
So how will Credit Suisse hire so many bankers? That partly depends on whether the RMs’ clients are 'ultra high net worth' (UHNW), people with about CHF50m ($51m) in liquid assets, or 'high net worth' (HNW) – CHF2m ($2.1m) is the threshold at Credit Suisse. In the UHNW segment, which makes up roughly 60% of the firm’s current RM headcount, Credit Suisse will concentrate on pulling senior RMs with bulging client books away from other private banks in Asia, say headhunters. It takes grey hairs to deal with clients at this level.
The stumbling block to UHNW hiring is convincing enough of a banker’s clients to move their assets to a new firm. But the Credit Suisse “brand name, extensive product suite and solid product support” will provide an enticement, says Liu Sanli, practice lead, private banking, at CA Search in Singapore. UHNW bankers, who are likely to have business-owning clients, will also be attracted by the Solutions Partners Group at Credit Suisse in Asia – a 40-strong team that helps RMs create investment banking products for clients.
Credit Suisse may find that boutique private banks provide the main hunting ground for finding UHNW bankers. As we’ve pointed to previously, many of these firms are suffering from high costs and tight margins in Asia. “By contrast, UBS offers a great product platform like Credit Suisse – there’s less incentive for you to move between banks that are quite similar,” says Rahul Sen, a former private banker, now head of wealth management at search firm The Omerta Group in Singapore.
Credit Suisse will need to be more flexible with the HNW proportion of its forthcoming recruitment drive, say headhunters. “If they’re only going to poach current private bankers, they won’t be able to get near their hiring numbers,” says a headhunter in Singapore who asked not to be named.
Mass affluent RMs (who typically service clients under the $1m or $2m mark and are often called ‘priority’ or ‘privilege’ bankers in Asia) provide a viable alternative talent source, say recruiters. Credit Suisse already runs a ‘Global Training to Relationship Manager’ programme which turns priority bankers and other staff into junior RMs.
“For this new hiring Credit Suisse will look at priority bankers from the likes of HSBC, Standard Chartered and ANZ and train them up, especially for RM roles in Singapore and Hong Kong covering markets like Indonesia, Thailand and Taiwan,” says Sen. “Without these candidates it will be impossible to add that many RMs to their headcount. But they’ll only go for the more experienced, best performing priority bankers who can make the step up to HNW banking.”
“In general, expect Credit Suisse to return to ‘creative’ hiring in Asia,” says Josie Ling, a private banking consultant at search firm Eban in Singapore. “They’ll consider training people with strong relationships with HNW individuals and their companies, whether from priority banking or even investment or corporate banking. To a much lesser extent they’ll consider people from other industries with strong HNW networks and an aptitude for sales.”
Meanwhile, Credit Suisse might also decide to ramp up its graduate hiring, which could produce an increased cohort of junior RMs by 2018. It is one of the only firms in Asia to run both analyst (for new graduates) and associate (for Master’s degree holders) training programmes in wealth management.