Banks in Asia don’t pay sign-on bonuses any more, right? The days of the golden handshake are over, correct? Well, no – at least not in private banking.
I was once a private banker myself, at a US firm in the 1990s, and now I recruit RMs here in Hong Kong and also in Singapore. So let me tell you that in the third and fourth quarters of 2017 almost all banks are routinely paying (big) sign-ons.
As we all know, there’s a massive talent gap in Asian private banking – banks from UBS to UPB are hiring as regional wealth rises, but there just aren’t enough experienced RMs around who want to move. In this kind of job market, sign-ons have become standard when banks hire in the second half and bankers demand compensation for the bonus they are sacrificing at their current firm.
They might get a guaranteed bonus too, typically a performance-based percentage, but that’s only paid after a year of employment. The sign-on, as the name suggests, is given out during their first week on the job or in their first pay cheque. And it’s paid in cash.
The amount typically reflects an estimate of what they would have got in cash at their current bank, plus a bit extra as an incentive for joining.
How much money are we talking? Let me give you some examples from down in Singapore, where I’ve been doing most of my hiring in recent months.
At AVP to director level, the sign-ons I’ve been involved with have ranged between S$20k and S$100k. For lower-grade MDs, S$150k to S$200k is the norm.
It’s the very senior MDs, the ultra-high-net-worth heavy-hitters, who get the serious money. I’ve placed people this year who’ve landed payments of S$600k and even S$1.2m. This is at the extreme end of the sign-on scale, but it is happening.
If RMs are moving from a listed bank (e.g. UBS) to an unlisted one (e.g. Safra Sarasin) in Asia they may enjoy the largest windfall. The privately-owned firm obviously won’t be able to match their stock options plan (as Credit Suisse, for example, would when hiring from UBS), so it will typically bump up their cash sign-on to help compensate.
No one bank stands out this quarter as being the most generous deliverer of sign-ons. But on the other hand, it’s fair to say that Asian banks tend to be more tight-fisted than their Western competitors.
Patsy Hao (we have used a pseudonym to protect her identity) has been a Hong Kong-based headhunter since 2000. Prior to that she was a private banker at two US banks.
Image credit: Mlenny, Getty