UBS has just been on a 101-strong hiring spree in Asia, but some of its private bankers in Hong Kong and Singapore could be tempted to look elsewhere for jobs after Chinese New Year because of a dip in the performance of the firm’s regional wealth unit.
Average assets under management per banker (regional AUM divided by banker headcount) at UBS in Asia fell by 8% quarter-on-quarter in Q4 to $314bn, while private bankers in Asia took in 40% less new money in 2018 than in the previous year, the firm’s 2018 financial results reveal.
A “bad” personal performance on the back of these figures is likely to motivate some UBS bankers to move to rival firms, especially if their bonuses were affected, says a private banking industry source in Singapore, who asked not to be named. Morgan Stanley, HSBC and Julius Baer are among the banks currently hiring relationship managers in large numbers in Asia. UBS bankers – even underperforming ones – remain sought after in a perpetually talent-short job market in Asian wealth.
This isn’t necessarily terrible news for UBS, however. Any defections are only likely to number in the low double digits, say headhunters. That’s small change for Asia’s largest private bank, whose headcount of relationship managers rose by 101 last year to reach 1,138.
Moreover, underperformers who leave because they’re dissatisfied with their revenue-generating potential at UBS are arguably exactly the type of people the bank may eventually want to be rid of. UBS has history here, too. In 2016, its headcount of relationship managers in Asia fell by 76 as underperformers left or were cut.
Established UBS bankers seem the least likely to want to leave this year. UBS bankers are usually paid bonuses of 8% to 12% (revenue to total compensation), says former Merrill Lynch private banker Rahul Sen, now a global leader in private wealth management at search firm Boyden. This is a low percentage by industry standards, but UBS’s large product platform typically boosts senior bankers’ total revenues and compensates for the low ratio.
“By contrast, for bankers who don’t yet rely entirely on UBS’s large Asia network and its platform for their business, it might make sense to move to greener pastures, where their bonus payout could be in the range of 20% for a similar revenue size,” says Sen.
UBS did not comment on its wealth management bonuses in Asia. UBS CEO Sergio Ermotti told Bloomberg last week that he doesn’t expect “any big movements” in bonuses across the bank.
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