If you’re an experienced private banker in Singapore with a bountiful book of loyal clients, you may well be contemplating changing employers in the near future. With so many private banks in the Republic looking for senior RMs who can generate immediate revenue, finding a rival firm that offers you a better package and platform could be comparatively straightforward.
For private bankers below the upper ranks, however, moving to a new bank is now becoming a dicier proposition as revenue pressures grow.
Despite a strong labour market in the sector, many ‘junior’ private bankers – typically those in their late 20s or early 30s who previously worked as assistant RMs – are delaying their next job move until they have a few more grey hairs.
“Some of them ideally want a new job, but they’re afraid they won’t be able to move US$150m in client assets – which is usually the minimum the new bank will require,” says Josie Ling, a private banking headhunter at search firm Eban in Singapore. “For bankers whose relationships with clients may not be quite as strong as those of their senior colleagues, there’s more risk involved in moving and also more pressure to perform once you get there,” she adds.
Despite surging levels of private wealth in Asia, private banks in the region are struggling to generate revenue to support expensive salaries and rising regulatory costs.
Pre-tax profit margins in Asia Pacific private banking are 21 basis points of assets under management — compared with 25 to 26 basis points in Europe, according Boston Consulting Group research. This helps to explain why several players, including Coutts, Barclays, ABN Amro and ANZ, have exited wealth management in the region over the past two years.
“Profit margins are under pressure. It may be short sighted, but the goal is to grow AUM and revenue now – and senior private bankers are better placed to do this because they can hit the ground running,” says Ling. “Banks will cut those whose cost-to-income ratio isn’t good and that’s a big disincentive for junior bankers – many consider it too risky to move firms.”
“Private banks in Asia like to grow and retain their own talent – so your revenue and AUM targets will increase more gradually if you stay with the same platform,” adds Clarence Law, a Singapore-based business advisor in private banking. “They are usually tougher on junior-level people they hire from competitors.”
It’s especially difficult to convince junior RMs at UBS, Credit Suisse and Citi – Asia’s three largest wealth managers – to change companies.
“If you’ve only been a proper RM – not just an assistant – for a few years, only these bigger banks have enough resources to provide systematic training and development, and to hold large, frequent client events. You need economies of scale to spend more,” says Ling from Eban. "Leaving this kind of environment prematurely is often perceived to be risky.”
As we noted last month, boutique private banks such as LGT, VP Bank, EFG, and Safra Sarasin are growing their Singapore regional headcounts in 2017.
“But they in particular want senior people – they don’t have the muscle to help grow the careers of more junior bankers,” says Law. “If you do want to join a boutique, the best option is to try to move with your boss, so you have support when you start.”
Image credit: Robert Daly, Getty