The Good, The Difficult And The Stable – What Headhunters See Around The World

Tom Burroughes London 26 June 2024

The Good, The Difficult And The Stable – What Headhunters See Around The World

We talk to wealth management headhunters in North America, Europe, Middle East and Asia about what they see as the important trends in the industry right now.

The overall wealth management employment story around the world remains a relatively buoyant if mixed one, according to the views gleaned by this news service from executive search professionals. 

Financial hubs such as Dubai and Singapore continue to be attractive hiring destinations – with important caveats – and for those who are able to grow revenues briskly and provide planning solutions, there’s plenty of opportunity in European locations. It is hard, even so, not to sense a cautious mindset since the recent geopolitical dramas, particularly Russia/Ukraine, and the 2020 to 2021 pandemic.

Within North America, migration of HNW individuals to lower-tax states such as Florida and Texas from New York and California is creating a need for wealth managers’ talent strategies to keep pace, recruiters say.

In Asia, several people that this news service has spoken to mentioned the cost of doing business in Singapore. Also, Singapore is intensifying scrutiny following a high-profile money laundering court case, which means that compliance-related roles will be in the frame, but some firms might trim hiring budgets elsewhere. 

“There is a strong requirement for Middle East and Asia-focused bankers within Switzerland and the war for talent in Dubai is extremely competitive,” Nick Hughes, managing director, Hughes Strategic Consulting Global, told this publication. (He is based in Geneva.) “We are also seeing a high number of bankers interested in relocating from London and Switzerland to Dubai and Asia. Salaries stay at similar levels with an air of caution in the industry.”

Simon Worthington, director of London-based Worthington Executive Search, argues that the kind of consolidation/restructuring that has been taking place in wealth management affects the types of jobs that are in play. In his firm’s 2023/2024 outlook note on the sector, he said that achieving robust organic AuM growth in wealth firms is becoming more challenging. And that means certain roles come to the fore, such as the emerging one of the chief client/customer officer (CCO). 

“The role of the CCO is one of the newest additions to the executive team and remains unfamiliar and untested to many in the banking and financial services sector,” Worthington said. There are other roles that have entered the frame: “The creation of the CCO position, along with other roles with similar responsibilities that have appeared over the past decade (e.g. director of client services, head of client experience/client engagement/client insights), coincides with a major shift in the focus and strategy of financial institutions.”

Staying in the UK, Billy Stephenson, MD of Stephenson Executive Search, talked about trends in how bankers/wealth managers are compensated.

“There are still plenty of large organisations that are offering salaries and discretionary bonuses, but for the entrepreneurial or newer wealth managers – and certainly across single and multi-family offices – there is more flexibility around salaries, bonus structures, LTIPs [long-term incentive plans] and other models,” he told this publication. 

“Across family offices, there tend to be key four general metrics: good behavior, bad behavior, good performance and bad performance. Their focus is that compensation is not done to the detriment of the culture of a firm,” he said.

Getting harder 
“It [the market] is getting harder,” Danny Jones, founding partner of Huddleston Jones, said of the private banking market in Singapore and Hong Kong. Jones is based in Singapore, although like many in his line of work, he travels widely to places such as the UAE. 

“A lot of banks are waiting to see how regulatory reforms [in Singapore] are taking shape…there are US/China tensions and a lot of plate-spinning going on,” Jones said. One issue, Jones said, is that during the pandemic, salary and compensation levels spiked and banks were “overpaying for talent.” “Banks were very profitable and reinvested into hiring.” 

One point to consider in places such as Singapore is the high cost of residential accommodation, Jones said.

“Compensations are coming down due to costs; banks cannot offer the hikes [offered] during Covid of 30 to 40 per cent, and realistically banks are looking at anywhere between 20 and 25 per cent. Industry RMs are looking for higher compensation, but banks are just not offering it,” he said. 

Another issue for executive search firms is that a lot of international banks try to handle recruitment by using internal resources rather than using external recruiters. “The problems with the direct approach is that you are not getting access to everyone,” Jones said. 

“All banks are going through redundancy exercises, and have overpaid in the past, and are having to cut costs and bringing people in at more realistic rates. There is a lot of talent in the market and it is flooding the market for sure,” he said. 

The Credit Suisse effect
In London at the start of this year, Worthington mused about the impact that the UBS/Credit Suisse merger – made at the behest of the Swiss federal government – might have on the jobs market. At the time of this deal, there was much speculation about former Credit Suisse bankers seeking a new berth.

“Clearly, many organisations spent considerable time during 2023 interviewing Credit Suisse personnel, though either chose not to progress or came up short in bringing them across,” Worthington wrote in his note. He added that a fresh set of moves is likely through 2024. Some people may decide that a merged entity is not where they want to be.

“Texas and Florida have been our most active markets in the past couple of years.  Among others, we’ve seen noticeable increases in Georgia and North Carolina, also the Pacific Northwest,” Buzz Bray, principal, Bray Executive Search, told this news service. 

“Though there has always been a need for associate and manager or mid-level support, we have seen a greater demand for these roles in the past 12 to 18 months,” Bray continued. “In several markets there is a real challenge recruiting wealth management professionals in the two- to five-year experience range. In some markets these candidates are more risk-averse to change than the more experienced advisors and subject experts, and our clients have a challenge filling these roles in some cities.  

“Our recruiting practice focuses on wealth advisory firms (usually RIAs/multi-family offices) that serve the UHNW family office market. The clients we work with are making strategic hires in markets that have a higher concentration of ultra-affluent clients.  Some of the searches we’ve worked on recently were not replacing people who left, but newly-created positions due to more clients and growth potential in certain regions,” Bray said. 

This news service reminded Bray that he had said in the past that it is important to find bankers who have books of business who can be prised out of a firm and given a realistic target on delivering revenue. How is that sort of market today?

“We don’t really work with bankers and the book of business scenarios. The RIAs and MFOs we work with generally understand the 12 to 24-month non-solicit non-compete framework and have their legal counsel review. The management team of the hiring firm sets guidelines for the new advisor when they join the firm. Sometimes the hiring firm will work with the firm the new hire came from to try to come to an accommodation, with the expectation that some clients will follow,” Bray said. 

Back in Asia     
Danny Jones said the problems in Singapore over money laundering could impact the jobs market.

“The China market is under a lot of scrutiny and a lot more banks now see it as being higher risk and, with the economic situation in China, lack of IPOs...and the regulator clamping down, it is getting harder to do China business. Banks are re-focusing costs and not putting all their eggs in one basket,” said.

He is relatively upbeat about the Middle East jobs market for wealth, however.

“The Middle East is a much more exciting proposition for a lot of the global banks. Banks are a lot more 'pragmatic’ about China now,” he said. 

This news service asked Jones about other Asian jurisdictions’ job markets.

“It is very difficult to get money from Indonesia. The opportunity there is now domestic. Its growth plans are huge. The Malaysia ringgit makes it very difficult to get money out given the [ringgit] currency drop. [There is] heightened compliance on Malaysian clients, and the scrutiny of Malaysian accounts is a lot higher than for others in the region. It is a difficult market to be successful in,” he said. “Thailand wants to be open but it can still be quite restrictive.”

Turning to the India NRI market, Jones said it is “booming” and the Middle East jurisdictions are attracting them. Dubai has expanded its residency visa system for wealthy people.

Jones was more positive overall about family offices and external asset managers, citing single family offices tapping into ideas such as outsourcing of certain C-suite roles.

One challenge for the market is that large private market houses such as KKR, Carlyle and Blackstone are directly marketing funds to end clients and bypassing private banks as intermediaries. “They are building their own equity with clients,” Jones said.

Jones also pointed to technology as an issue that those in the jobs market must face up to. “This industry is now under attack from digital platforms, fintechs and they are taking a bit of market share and appealing to the NextGen,” he said. 

This is London calling
"The year was very active at the start for the Middle East and North Africa world with a lot of movement and a lot of desire from the leading banks to grow this market in all booking centres with a heavy focus on Saudi Arabia, most likely driven by the [Saudi] NEOM project and also the view that the market is underbanked," Nick Dogilewski, managing partner at Exeter Partners, a firm in the UK, told this publication. "Many of the banks' data state that the market is bigger than it appears and that much of the UHNW wealth is underbanked," he said.

"The UK has gone through a state of flux with many of the banks going through some level of restructuring this year," he said, noting Citigroup's cutbacks. "Citigroup went out to reduce reporting lines and cost, cutting many European heads with others actively leaving through their own choice," he said. On the other side of the ledger, Dogilewski said JP Morgan expanded its HNW business, called "Single Coverage," and hired new managing directors to lead its UK businesses under the CEO Olly Gregson.

Dogilewski said much of the demand and growth in the UK has been in the tier 2 and independent firms. "They have the drive, the demand and ability to hire, although every one of them is different in the approach to pay and the platform that is on offer. Almost every tier 2 bank in London has been hiring or looking to," he said. EFG International has been particularly busy in its hirings, he

We have to talk about non-doms
This publication asked Dogilewski what he thought the planned end of the UK's venerable resident non-domicile system would mean for the UK wealth sector.

"The end of the non-dom status was described to me recently as a 'Brexit 2.0' – the effect coupled with a Labour government could be catastrophic for the wealth sector in London. Many of the international bankers have moved in recent years, but the non-dom client base has still had its place in London. I fear that with the individuals who are geographically mobile, we will see a steady out flow again in the coming month to years (while other international centres welcome them with lower tax rates). With regards to the hiring of talent for the banks, short term I hope that there is no effect, the existing bankers will continue running their clients and building their books. It is just the status of the clients that will change," he said.

Pay and Europe
Dogilewski was asked about pay trends in the UK and Europe.

"In the big banks inflation has had little effect on the fixed salary numbers. Salaries have slowly moved up over the last few years, partially driven by bonus caps for the biggest bankers or in banks such as Deutsche Bank it was hazard pay due to the condition of the bank. In recent weeks some of the banks are removing caps. There is discussion that the fixed salary numbers could come down for some bankers but this has not been seen as of yet," he said. 

After the UBS takeover of Credit Suisse, Dogilewski said Zurich and Geneva banking markets are both busy. 

"Paris and Madrid are also in growth mode, whilst mainland Europe is still benefitting from a post-Brexit 'Big Bang' growth as geographic coverage bankers are returning to their home country capital cities," he added.

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