Wealth managers getting ‘crazy’ pay hikes to defect

SINGAPORE: With great wealth comes great remuneration. Competition to manage the money of Asia’s burgeoning army of millionaires has pushed pay hikes for wealth managers to the highest in more than a decade.

Those willing to jump to a rival are getting increases of 30 percent or more in Hong Kong and Singapore, according to private bankers and recruiters.

“It’s a crazy market,” said Derrick Tan, head of Greater China and North Asia at Bank of Singapore, the private bank of Oversea-Chinese Banking Corp., which aims to double the number of relationship managers it has in Hong Kong and Singapore within two years.

“Every day we’re still discovering new high-net-worth clients.”

The two cities, the region’s biggest private banking hubs, probably have fewer than 10,000 licensed relationship managers, according to Credit Suisse Group AG, the region’s third-largest private bank.

Last year, almost 2,000 new millionaires were minted every day in the region, according to data from Capgemini SE. “

For a huge market like this, it’s certainly not enough. That’s why we are seeing a talent war,” said Amy Lo, a 30-year veteran of the industry and head of Hong Kong’s Private Wealth Management Association. “It won’t be easy to retain people when they can easily get a 20 to 30 percent premium and an upgrade in title.”

Seven out of ten wealth clients in Asia are entrepreneurs and as they hand over the reins to the next generation, the demand for expertise to manage the family’s investments is growing, said Lo, who is also UBS Group AG’s head of wealth management for Greater China.

On average a relationship manager at a major bank handled $341 million in assets under management, or AUM, last year, according to Asian Private Banker. Those who change employer, typically bring with them up to half the assets they manage for clients, bankers and recruiters said. “

AUM means everything,” said Geoffrey Bevan, practice leader for private banking in Hong Kong at recruiter Asia Carbon Search. “

Banks make a significant amount of money on the AUM, so they’ve got the ability to pay. Anybody who is a top performer, with strong AUM and return on assets, is going to be in demand and people are willing to pay for that.”

Base salary increases can be from 30 to 45 percent, Bevan said. “This is the biggest increment that I’ve seen in 10 years.”

He said rates varied from company to company depending on pay structure and incentives, with retail banks typically paying less on average. – Bloomberg

The Edge Market News, Tuesday, 4 September 2018