Private banking has enjoyed one of the most buoyant job markets in Asian financial services for several years. But technology, compliance costs and skill shortages are now changing the face of careers in the sector.
Here are the key job trends you need to know about in 2018.
Some private banks in Asia are renewing their focus on RMs who have clients with between $1m and $5m to invest (the so-called ‘high-net-worth’ sector, which sits below the more glamorous ‘ultra-high’ division), says Sean Kang, director of APAC wealth management at consultancy Scorpio Partnership. “While Credit Suisse, Stan Chart and J.P. Morgan have raised their minimum asset requirements, others like UBS, HSBC, BNP and DBS are expanding in the sub-$5m segment, which is the fastest-growing part of private banking, with the highest returns on assets managed.”
Last year LGT, VP Bank, EFG, Safra Sarasin and UBP started ramping up their Asian recruitment. This year another boutique, Pictet, is expected to enter the fray. Following the appointment of Boris Collardi as its co-head of global wealth management in November, headhunters are tipping the Geneva-based firm to add RMs in Singapore and Hong Kong. Collardi oversaw Julius Baer’s expansion across Asia during his tenure as chief executive.
“Private banks in Asia are beginning to realise the importance of measuring client satisfaction in order to win wallet share and justify their investments in new platforms and products,” says Kang. “And as private banks fine tune their compensation strategies to ensure better pay-for-performance, client satisfaction is now also increasingly being used as part of the bonus assessment process. Providing good client service is being linked to RM compensation.”
“Hiring individual mid-to-junior-level bankers brings up headcount numbers, but not all of them will be successful and some will even end up being retrenched,” says former Merrill Lynch private banker Rahul Sen, now head of wealth management at search firm The Omerta Group. “So banks will look for more senior RMs who can move a team and a significant book of business with them.”
More senior RMs in Asia will be asking headhunters about jobs at external asset managers (EAMs) this year, says ex-private banker Liu San Li, now head of banking at BTI Executive Search. “You typically earn 1.5 to two times more at an EAM than at a private bank. You can effectively max out your total AUM from the same client, so long as your EAM works with the same banks as your client,” he adds. “There’s also much less bureaucracy, no restrictions on the market coverage, and less KPI pressure.” So what’s the catch? “Not many Asian clients are familiar with the EAM model, so few bankers end up making the move.”
Compliance hiring may be on the decline in investment banking in Asia, but it’s as healthy as ever in wealth management as banks continue to onboard new clients from Asia’s expanding population of millionaires and billionaires. RMs, meanwhile, continue to complain that the regulatory burden is stopping them spending more time meeting clients. “Compliance is now the most important thing in the private banking industry in Asia,” says an RM at a large Swiss bank in Hong Kong, who asked not to be named. “Compliance tasks always come first when I start work.”
International private banks are increasingly developing more of their tech platforms in Singapore and Hong Kong as they target Asian clients as their main source of revenue growth. UBS, for example, launched a digital hub in Hong Kong last year, which links its wealthiest clients to tech start-ups. “There’s more use of tech in Asia wealth advisory, but so far this hasn’t translated into job losses for advisory bankers – and I don’t see that happening in 2018 either,” says Liu from BTI Executive Search.
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