Attracting the best relationship managers (RMs) is crucial for any private bank aiming to expand its client base.
But what exactly do these in-demand professionals want from an employer, and which private banks are currently winning the battle to attract the best talent?
Unsurprisingly, big international names such as UBS, JP Morgan Private Bank, Citi Private Bank and Bank Julius Baer feature heavily on RMs’ wishlists, according to Selby Jennings, an international recruitment company.
In Singapore, Bank of Singapore and DBS Private Bank are closely tied as frontrunners, said Andrew Zee, the firm’s principal consultant specialising in private banking and wealth management recruitment.
‘For the local Singapore banks, the main reason would be the stability and brand name that would sit well with both onshore and offshore clients, given these banks have a strong presence being based in Singapore.
'Moreover, with these banks also having offices globally it strengthens their ability to share with clients on the opportunities on hand,’ he said.
Show me the money
Although bonuses do inevitably influence where private bankers choose to work, high pay-outs may not necessarily help retain talent.
The investment capabilities of a platform, strategies in place for primary markets and reporting lines are also important factors.
When it comes to platforms, Zee adds RMs tend to gravitate towards private banks that have a platform that suits the needs of its clients.
Access to multiple markets is another draw. Smaller private banks, for instance, still work on an ‘open market’ model, allowing RMs to cover more than one market in which they have their key clients.
‘Boutique banks that offer such a model would potentially attract private bankers from other platforms in which their markets are being segregated on. What’s more, being able to leverage off the corporate and investment banking arm could be a plus point for some bankers.
‘On the other hand, having a strong focused discretionary portfolio management (DPM) and active advisory arm might be the focus for others,’ he said.
Compensation for RMs has always been based on their client size, which their targets are pegged to. As most banks pay a discretionary bonus, it is also largely dependent on performance.
According to Rahul Sen, a former private banker, now wealth management head at executive search firm The Omerta Group, RMs ideally look to earn about 15-25% of revenues earned.
‘Besides, senior RMs also look at moving to or setting up a multi-family office as they will be able to attract their clients’ entire wallet share, plus have a larger pay-out on the revenues earned,’ he said.
This trend is clearly in evidence in Hong Kong, and Singapore is also following suit. In July, Carret Private, a Hong Kong-based multi-family office that caters to investors with at least $50 million in investable assets, hired two private bankers from EFG Bank.
‘With the rise of the family offices and external asset managers introducing a commission-sharing model, we might see a slight revision in the banks as well,’ Selby Jennings’ Zee concluded.
This article was published in the September issue of the Citywire Private Wealth magazine.