eFinancialCareers

In the latest installment of her regular series, “From the Frontline”, our columnist discusses private banks and their quest for superstars. A former banker, who now works as a headhunter, the author has more than 10 years’ experience at leading firms in Asia.

While investment, commercial and retail banks continue the onerous process of securing those extra two or three rounds of approvals for even their junior hires, private banks seem immune to such struggles.

Their doors are always open. They are always looking for “good people”. But we have all heard these statements in the past, so what’s new?

One would expect that in the aftermath of the financial crisis, private banks would have lesser AUM requirements for hiring new relationship managers. But guess what? Just the opposite has happened.

Banks that in the past would have easily hired an RM with US$100m AUM, now demand at least US$150m to US $200m. Credit Suisse, Julius Baer, Sarasin and even Merrill Lynch have all raised their bars, with others closely following suit.

There is a significant amount of logic behind this. Initially, when the financial crisis first struck, banks were looking at how much an RM’s portfolio had decreased to gauge his/her sales, advisory and portfolio-management capabilities.

But they soon changed gears to examine which RMs were still holding onto their clients and maintaining stable portfolios (or even managing to grow them, by howsoever minuscule a percentage).

To use the buzz words beloved of headhunters, every bank is looking for “solid hard-hitters” and “serious private bankers”. And no, these people aren’t mythical, they are very much there.

For the banks the equation is simple: separate the grain from the chaff. They would rather stick with their few star performers and focus on retaining them, while opportunistically looking for more star performers in the market.

They are definitely not going to bring in younger, less experienced RMs by upgrading them from priority banking or by pulling them from other sectors (as they did during the boom). The message is clear: this is private banking, this is serious, this is here to stay.

So what is happening to the numerous RMs who only managed US$50m to US$120m and have now been laid off? (Yes, in the glorious past, it was possible to be called a private banker with an AUM of just US$50m!).

One would think that they are getting rapidly picked up by priority teams. But here’s the thing. Priority-banking hiring managers aren’t exactly leaping at the opportunity to take on failed private bankers. A long-term client of mine remarked that they have “too much attitude” to fit into preferred banking.

But what have authentic priority bankers got to look forward to? Stepping up to private banking seems pretty much impossible now. Their product selling capabilities are seriously stretched as customers remain cautious and continue holding onto their money.

Some smart priority bankers are simply refusing to consider moving jobs in the current market. And those who do are sometimes shown a retention carrot by way of a counter offer, team management opportunities, unbroken stream of incentives and so on.

One thing seems clear. The best way forward in both private and priority banking is to consolidate one’s own position within the firm, steadily build up portfolios, and keep the revenues coming in.

You can then look at better opportunities next year or the year after, if this incipient market uptake continues. The point to remember today is that as far as wealth management is concerned, every bank is hiring. The real question is, who is actually getting hired?