Before the financial crisis, becoming a relationship manager at a private bank did not always require the most stringent of tests, as firms expanded to service a fast-growing client pool in emerging markets.
‘Prior to 2008, you had infamous stories of Mercedes salesmen and high-end hair salon salespeople becoming relationship managers,’ Rahul Sen, global head of private wealth management at London-based executive search firm The Omerta Group, told Citywire Asia.
Wealth managers and banks in the region are once again on a hiring spree. On Tuesday, Deutsche Bank Wealth Management announced its intention to recruit 100 client-facing employees around the world, half of which were in Asia. Last year, Credit Suisse and Julius Baer hired more than 100 RMs in Asia. Standard Chartered hired more than 40 bankers and plans to add 60 senior RMs in Hong Kong and Singapore.
However, Sen said, it is ‘no longer a seller’s market’ for RMS. In 2016, acquisition deals had put hiring plans on hold for certain private banks, and while hiring at these banks has resumed, they are far more selective.
‘There have been times when banks have told me that the candidate is too expensive, even if he produces $5-$6 million, and what he wants is too absurd,’ Sen said.
An executive at another search firm told Citywire Asia that although banks are hiring RMs – and in particular those with experience in emerging markets, such as Thailand and the Philippines – their quality threshold has gone up substantially.
‘For example, they tell us that if the banker doesn’t have at least $200 million in assets and 3-5 years’ worth of client relationships, they won’t hire them at all,’ the executive said.
Mass hire numbers can obscure the real picture in the industry. Many private banks have been letting RMs go over short-term performance targets.
With margins being squeezed and regulatory burdens increasing, banks are hiring managers with compliance expertise, recruiters said. As digital platforms and cybersecurity concerns become part and parcel of Asian wealth management, banks are also ramping up the headcount for information technology roles.
Increased regulatory oversight has also made bankers relatively immobile, with client onboarding processes taking up to three months.
‘Today the bank wants to know the source of client funds to the last dollar. The unenterprising banker is not going to move because he/she doesn’t want to go through the KYC procedures for the 20-30 relationships at a new bank all over again,’ Sen said.