HNW firms take different approaches to recruiting

Thomas Coyle

16 October 2007

It's harder and more expensive than ever to find talented wealth managers. Stiff competition among wealth-management firms for talent is forcing them to look outside the usual pool of potential hires and to offer increasingly high salaries to tempt the best talent, according to participants at a Reuters wealth-management conference in Boston last week.

Slick servants v. mid-career salesmen

For example, Zurich-based Julius Baer is hiring graduates from Ecole Hotelier, a hotel-management academy in Lausanne, Switzerland, to bring their customer-service skills into the firm. Students there are inculcated with an unusual degree of aplomb, says Boris Collardi, COO of Julius Baer's private banking division. For one thing they have to wear suits to class; they also tend to be multi-lingual.

Julius Baer has expanded its pool of private bankers from 400 to over 500 in the past year. This rise has been matched by an increase in wages. In general newly recruited private bankers have been seeing steady compensation increases over the last five years, says Collardi.

Meanwhile the Bank of Ireland thinks it's a better idea to try to turn mid-career professionals from other fields into private bankers. The Dublin-based bank's private clients don't want whipper-snappers telling them what to do with their money, says its private-banking director Mark Cunningham. "Educated" salespeople fit the bill to a far greater degree, he adds.

Pouring into the breach

London-based Standard Chartered is siphoning staff from other areas to fill gaps in its private-banking unit, many of them veteran traders in their 30s and 40s who are looking for more settled lifestyles, says the bank's private-banking chief Peter Flavel.

In Asia of course, as shown in the "talent war" in Singapore last year, private bankers are being offered enormous incentives to jump ship.

Credit Suisse is one of a clutch of big firms wading straight into the Asian recruiting fray. The Zurich-based bank, which employs 229 private bankers and manages $48 billion in client assets in Asia, wants to expand from its offshore centers in Singapore and Hong Kong by increasing its presence in Japan in China -- which together account for around 65% of Asia's $7.6 trillion in high-net-worth assets, according to Marcel Kreis, head of private banking for Credit Suisse's Asia-Pacific region.

With that in mind, the Swiss bank plans to double its wealth-management staff in Asia over the next two years, says Kreis.

Poaching is hardly less pronounced in the U.S., according to industry sources. The fight is especially keen for advisors equipped to serve clients with at least $50 million to invest, which is a comparatively fast growing pool, according to the consultancy Pricewaterhouse Coopers .

Au contraire

"Somebody who is good in this space is highly sought after," PwC partner John Stadtler told Reuters last week. "Some of the poaching may involve getting people who are looking to move up the ranks."

A PwC study published this summer says that only around 20% of CEOs polled thought that their firms could attract and retain the best managers. Further, there was a marked degree of pessimism about the overall pool, with only 17% of managers thought to have a "very high ability." Around 39% of respondents said that their firms spent enough time and money on training employees to perform well.

"This is a business where you are learning with the smaller people and top quality people probably don't move as quickly as they would like to," said Stadtler.

Still, a wealth manager who asked not to be identified takes a slightly contrarian view of the employment crunch in wealth management.

"It seems that is cited as a top obstacle in every survey you see and at every conference you go to," the source says. "I think is is hard for firms, but I also wonder if some of it isn't because it's just an easy thing to talk about. You're not likely to hear someone say, 'Our main concern is that our investment performance stinks' or 'our infrastructure is crumbling.' It's easier to say, 'We can't keep up ; we need more relationship managers' because that implies success." -FWR

Purchase reproduction rights to this article.