Private banks in Asia are dealing increasingly brutally with newly hired relationship managers (RMs) who fail to meet tough shot-term performance targets.
“Many private banks in Singapore and Hong Kong are ruthless and now review you just six months after you join,” says a Singapore-based headhunter who asked not to be named. “If they don’t think you’re on track to performing well, they’ll cut you. This is helping to create high stress levels among new joiners.”
If you make it past six months, you then need to achieve (or come close to achieving) a year-one target of assets under management. If you don’t, your job is on the line again. Industry-average AUM goals for high-net-worth bankers in Asia are shown in the table below (RMs typically also need to generate a return on these assets of about 0.5%).
“In your first year it’s only ok to miss target by 10% to 20% – and only then if your pipeline is strong and if you have a good relationship with your manager and team,” says Josie Ling, head of private wealth management at search firm Eban in Singapore.
Meanwhile, some underperforming RMs aren’t waiting to be fired. “If they’re confident of finding a job in another bank soon, they will start looking,” says former Merrill Lynch private banker Rahul Sen, now head of wealth management at search firm The Omerta Group.
Sen says a lot of RMs blame the bank, not themselves, if they flunk year-one targets. “Some complain that they aren’t getting adequate support from their seniors, or that the platform isn’t what they expected, or that the boss who hired them has left, or the bank has changed its strategy making their clients’ investment requirements untenable.”
While your first 12 months at any new private bank is likely to be trying, it’s typically even harder to start at boutiques like Pictet, Sarasin and EFG than it is at UBS, Credit Suisse, Citi and other larger players in Asian wealth management. “This is because boutiques have limited availability in their balance sheet, less sophisticated platform capabilities and lack universal product offerings,” says a private banking consultant.
To avoid first-year failures, private banks in Asia are trying to do more during the recruitment process to weed out candidates. “Banks are now pickier about potential new RMs, especially on the quality and portability of their assets,” says Ling from Eban. “Tougher regulations and KYC standards make it harder for bankers to move their clients. This year candidates have to really convince banks that they can hit their targets.”
“A lot of RMs in Asia provide too optimistic a view of their client book and their ability to move it to a new private bank,” says Pathik Gupta, head of APAC wealth management at McLagan in Singapore. “Banks have become much more conscious of how much an RM can really move – on average that’s only about 25% to 30% of total book.”
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