Morgan Stanley plans to take on about 100 private bankers in Asia by the end of 2010. The drive will be lead by Nick Chan – its former Indonesian private bank boss – who has been promoted to the newly-created post of head of talent management for private wealth management in Asia.
As hiring challenges go, Chan’s is a tough one for three main reasons: 100 is a huge number for such a specialist job function; post-GFC competition for talent in private banking is fierce; and Morgan Stanley’s culture and compensation structure means not all relationship managers (RMs) are cut out to work there.
In the words of one headhunter, who asked not to be named: “Its clients are big and its standards are high, so hiring that many good people won’t be easy.”
Morgan Stanley is pitting itself against a host of other banks – including Julius Baer, BSI and Standard Chartered – which are boosting the ranks of their RMs in Asia, hoping to cash in on the region’s growing number of high net worth individuals.
The speed Asia’s economic recovery means they all have tight hiring timetables and are essentially competing for the same talent at the same time. “If you calculate all the publicised hiring targets of all the private banks, the numbers just don’t add up. There isn’t enough talent around.”
However, as the private banking industry becomes increasingly candidate-led, banks have adjusted their hiring expectations in the last few months, says John Koh, managing director, WMRC. Firms are now keener to consider experienced bankers with US$120m of AUM, instead of requiring $200m to $300m, he adds.
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Morgan Stanley also has unique challenges to overcome. It rewards RMs with roughly 25 per cent of revenue generated in a year, while the likes of UBS pay a base and discretionary bonus.
Only certain candidates like the brokerage-style compensation model, says Jack Bennett, director, Lion Rock International. “Moving to Morgan Stanley can be a shock to the system. It also operates a leaner support team than some European private banks, so you need to be very product savvy to work there,” he adds.
Perhaps unsurprisingly, Morgan Stanley’s success in poaching client-heavy private bankers from the competition has been a bit hit and miss. Bennett says instead the firm sometimes takes on experienced investment or corporate bankers, provides training and introduces them to clients via its existing networks.
Koh adds: “The challenge for Morgan Stanley in its current recruitment drive, as well as that of other US banks, is the financial crisis, which is still fresh in the minds of many people. US banks must position themselves as strong financial institutions with the ability to attract clients. Clients are drawn to banks which are safe and relatively free of regulatory issues and likewise, bankers will go where their clients are fine putting their money.”
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