After a tumultuous year, the Swiss banking industry is having to adapt and the changes are affecting the market for banking jobs. Osmond Plummer in Geneva talks to headhunters about the trends.

Two thousand and nine was a difficult year for many private bankers and nowhere more so than in Switzerland. There have been plenty of sagas: the conflict between the Swiss legal protection of bank secrecy and the US and other authorities’ attempts to prise open the record book; the thefts and subsequent sales of client data from Swiss banks, and the whistle-blowing actions of Bradley Birkenfeld which heralded the historic hand over of data from UBS to the Internal Revenue Service.

The shockwaves from that event are still being felt politically and economically in the nation. 

To many, the Swiss brand is permanently damaged with the future of secrecy uncertain and the worries related to data theft making clients uncertain of the security of their personal information. No bank is immune from those concerns. Difficult markets and a difficult environment have combined to put a lot of pressure on Swiss private bankers.

In its 2009 Private Banking and Wealth Management report, PriceWaterhouseCoopers identified the biggest area where private bankers and their line managers feel they need training or coaching is in client relationship management skills. How do you reassure clients in these difficult times?

So what are the skills most sought after in private bankers in this environment?

Maria Penseyres, Partner at Heads! Executive Consultancy in Geneva, recently told this publication that the European private banking market is in transition with an increasing number of clients leaving to establish onshore accounts.

Banks are "looking for assets combined with talent” and focusing on areas where there are no legacy tax issues such as the Middle East and the Far East. In the West, the focus is on legitimising assets and regularising situations which is complex in many cases and takes sophisticated relationship management skills. Ultra-high net worth clients can move to establish a tax friendly residence in a country such as Switzerland, but for the middle of the market the situation is difficult.

Tim Gibson-Tullberg, a Geneva based executive search partner (also with offices in London) says that the working environment seems to have stagnated in Switzerland as banks try to assess the best future strategy and “bankers are getting bored”.

Banks are all actively hiring with “an identical focus” on Latin America, East Europe and the Far East, he said. He is, however, “surprised at the number of long-term employed private bankers who are now willing to consider moving, both to another bank and another location” if they receive a realistic proposal.

Zurich-based Thomas Juden, associate partner at TalentSPY, the recruiter, says that banks have been focusing on hiring long-term and experienced bankers with an excellent background. The focus now is on finding private bankers “who can deliver assets” to their new employer. He also suggests that in some cases a move may be led by the client who may have become unhappy with the bank and its investment performance and tells their banker that they want to move.

Gibson-Tullberg agrees with this judgement but feels that the talent shortage is now on the more junior “hungrier” private bankers who can generate new and younger clients.

A result of the changes in the market is that executive search companies have to do more and more due diligence on candidates to make sure that books are transferrable and declared before they propose a candidate to an employer.

“It is more about performance now rather than about hidden assets,” says Penseyres. That performance has to be both in investment performance and in relationship management abilities. Banks are already supplementing their relationship managers with specialised investment advisors and other points of contact to try to maintain ownership of the client by the bank.

According to Penseyres, “Where possible, the key business developers [Relationship Managers/Account Managers] are benefiting from improved compensation packages so that they will not be enticed out by their competitors.”

Juden talks of the main interest being in relationship managers with over $200 million in their book with the senior relationship managers often running over twice that amount. There is also interest in relationship managers who can add value in other areas of relevance to their UNHWI clients, linking them into other areas of the bank that may be able to offer services, such as mergers and acquisition advice.

For those key managers, however, according to Gibson-Tullberg competition is keen and says that “the spread in packages on offer can be up to 60 or 70 per cent” depending on the hiring institution. Juden also confirms that senior bankers are witnessing significant pay increases “as a retention policy”.

What about the balance between the client loyalty to the banker and to the institution?

That depends on the individual client, but everyone agrees that larger institutions are becoming more attractive to clients who may have been burned by some of the investment scandals of the recent past and want to feel that their bank has sufficient resources to support their activity.

Small banks are also suffering from the increase in regulatory pressure and in general there is a lot of “behind the scenes” discussion about mergers and alliances, Gibson-Tullberg says.

The problem there is once again non-disclosed assets and how they should be dealt with on a country by country basis. No-one wants to buy into a legacy business that will blow up in their face in two years’ time. Some banks have a strategy for their un-declared assets and are dealing with it but a number are “hoping that the problem will go away” which is not a long term situation. Due diligence is the key and is something that tends to slow down the process.

One thing that everyone does agree on is that the wealth management world has changed and that this is a new environment that offers new challenges. Switzerland and its bankers will need to adapt to the new environment but the industry is here to stay as “it is where the majority of the talent is” says Juden. It is still too early for anyone to predict exactly what the future holds for Swiss private banking as the effects of the last year or so are still being digested.