Asian private bankers at Goldman Sachs and J.P. Morgan are managing more assets – and therefore typically getting larger bonuses – than their counterparts at UBS and Credit Suisse.
The average relationship manager (RM) at Goldman and J.P. Morgan in Asia has $568m and $481m in assets under management (AUM) respectively, according to figures we calculated by dividing the banks’ total regional AUM by their RM headcount.
By contrast, Credit Suisse’s Asian RMs ‘only’ look after $255m on a per-head basis and UBS’s manage $226m each, as the table below shows.
This is despite the two Swiss banks, which have more Asia-based RMs than all their rivals, both pivoting their global business towards the Asian wealth sector.
“The average Goldman or JPM private banker has more assets and therefore – as long as they’re generating sufficient revenue from these assets – they will be collecting higher revenue-based bonuses than bankers at UBS and CS. Their overall comp also will be higher on average as a result,” says a private banking headhunter who asked not to be named.
Does this mean that private bankers in Hong Kong and Singapore should all aspire to work for Goldman and J.P. Morgan? Only if they’re senior and have extremely wealthy clients.
The AUM-per-banker numbers of the two US firms are inflated by the fact that they specialise in the ultra-high-net-worth (UHNW) segment of private banking. Goldman clients must have at least about $30m to invest – and a typical Goldman RMs might have just 10 clients each worth $50m. “They compete very well for talent at this elite level,” says the headhunter.
While UBS and Credit Suisse have strong UHNW teams in Asia, they also cover the high-net-worth sub-$30m market, which reduces their AUM per head.
The Swiss firms’ recent Asian hiring sprees – Credit Suisse added 70 RMs in Asia last year – have also helped to push down their bankers’ average assets.
“They’ve expanded a lot more than GS or JPM, and when you’re expanding it’s not as though you can hire loads of senior people with big AUMs – they’re aren’t enough of them around,” says former Merrill Lynch private banker Rahul Sen, now head of wealth management at search firm The Omerta Group in Singapore.
“A lot of the hiring over the last two to three years at CS and UBS has been at the mid-level – associate directors who manage about $150m to $200m,” adds Sen. “But as these people grow their books average assets per head will rise and so will compensation, if the individual RMs generate good revenue from their assets.”
The table below, which is based on new 2015 AUM and staffing numbers from Asian Private Banker, shows average RM assets for leading private banks in Asia. It excludes Citi and DBS because their figures are skewed by the inclusion of assets from the mass-affluent sector.
Image credit: Dic Liew, iStock, Thinkstock