SG and HK Bankers Lured By Big Pay Jumps May Be Regretting
Private bankers in Hong Kong and Singapore may have jumped to join smaller private banks with huge increments dangled before them. However, with higher targets and tighter time-frames, some are regretting the jump, industry sources say.
Private bankers who are looking to join smaller banks with huge increments of 30 to 50 percent should think twice, a source told finews.asia. Higher salaries also come with higher targets, banking veterans say.
«One has to adapt to the new work culture (when you join a new place), on top of increased pressure to deliver. Is it worth it?» asked one private banker in Singapore, who declined to be named.
«Taking a big pay increase in a new job means you’ve just upped your break-even revenue threshold at the exact time when your revenues are most vulnerable as not all your clients will be moving their assets,» says Liu San Li, a former private banker, who was quoted in «efinancial careers».
Whopping Pay Raise
When joining another large bank, the pay rise is typically 20 to 30 percent. Boutique banks can offer salary increments of 30 to 50 percent because they do not have the same tight salary bands as the bigger banks such as UBS, Goldman or HSBC. Plus, these boutiques are in a hurry to grow their assets under management.
«They pay more because there’s a risk premium for joining an up-and-coming firm,» says former Merrill Lynch private banker Rahul Sen, whose current role is a global leader in search firm Boyden.
Sustainable?
«I’ve known bankers move to boutiques for obscene amounts of money – an extra $100k – but within a year they’re worried about becoming profitable and have to either reduce their salary or break even more quickly,» said Liu, now a business partner at wealth management firm Avallis. «I’ve dealt with senior RMs recently who’ve moved to boutiques with a huge pay increment only to explore other jobs after just a year because they knew their days were numbered.»
With higher targets, banks are now demanding more aggressive numbers in terms of both revenue and time frames, said Pathik Gupta, regional head of wealth management at consulting firm Scorpio Partnership. «Break-even time frames are declining further – they’re often now even less than one year,» he explains.
