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Hong Kong PBs slow hiring during shakeout

Consolidation in Asia's private banking industry has slowed hiring of professionals in Hong Kong, according to Sunny Kwak, Hong Kong-based consultant for private banking at recruitment firm Morgan McKinley.

 

As operating expenses rise at private banks in Hong Kong, senior salaries are impacted.

“Banks are quite sceptical about putting a premium on senior hires from a competitor,” Kwak told FSA

Currently, private bankers should expect a salary increase of around 12-15% when transferring to another bank. However, that is lower compared to increments of up to 20% two-to-three years ago.

Besides salaries, Kwak is seeing less demand than last year for new staff.

The hiring managers and human resource people that Kwak deals with are not certain about their hiring needs for the rest of the year because of the ongoing shakeout in Asia’s private banking industry.

Previously, banks would ask recruitment firms to find good talent and pool up to 100 candidates. “But this year, we don’t see much of that. I don’t see a lot of aggressive planning either from banks.”

She added that there are even more limited openings now compared to last year for roles that support private bankers, such as product specialists or investment counsellors. 

The consolidation of the private banking industry has also made private bankers less aggressive in seeking new hires.

During the months of February and March, just after employees get their yearly bonuses, Kwak would expect to talk to a large number of people looking to change jobs. 

But so far, fewer job seekers are in the market than last year. According to her, candidates would prefer to stick with their current jobs because the ongoing shakeout has made the job market more uncertain.

More candidate scrutiny

The hiring process has also changed, with private banks increasing the type of vetting that potential candidates go through.

The process was faster before and less time was spent on candidate due diligence, according to Kwak. Candidates would only be interviewed by the bank’s human resource department and the team head.

“Now they ask the bankers to not just meet with hiring managers, but also with peers and the team. They want to make sure they are hiring the right person,” she said.

However, private banks should also expect scepticism coming from the people they wish to hire. One of the biggest concerns of managers who want to switch banks is whether they are able to transfer all of their client books to the next bank.

“Each bank has a different compliance framework and [the candidate] will not be sure if the bank’s compliance will approve [all book transfers],” Kwak said.

Kwak added that the details of transferring books cannot be discussed during the interview process. Although candidates are open to talking about it with the hiring banks, the bank will not give any details.

“[The banks will only say] `we will support and help you transfer almost 100% of the AUM from the previous bank to ours.’”

Because of that uncertainty, candidates will not be confident enough to move to another bank, even though they have a job offer on the table, she added.


 

Basic salary levels for private banking, according to Morgan McKinley’s 2017 salary guide. After market-wide salary increases between late 2014 and early 2015, basic salary levels remained largely unchanged throughout 2016 across front office functions in Hong Kong, according to Sandeep Mohanan, the firm’s senior consultant for banking and financial services.

He expects the 2016 levels to remain the same in 2017. 

 

Private bank salaries (HKD per month)

Role

Associate

Associate director / VP

Director

Executive director

Managing director

Private Banker

50k – 60k

60k – 100k

110k – 125k

130k – 150k

160k+

Fund / Portfolio Manager

40k – 50k

50k – 80k

80k – 120k

130k – 150k

150k+

Investment Advisor / Consultant

35k – 50k

60k – 100k

100k – 120k

125k – 150k

150k+

Product Specialist

35k – 50k

50k – 70k

80k – 125k

125k – 150k

150k+

Trade / Dealer

30k – 50k

50k – 80k

80k – 100k

100k – 130k

130k+

Business Management

35k – 45k

50k – 80k

80k – 120k

130k – 150k

150k+

Assistant Relationship Manager

30k – 50k

50k – 80k

*

*

*

Product Development / Management

35k – 45k

50k – 70k

80k – 100k

100k – 120k

130k+

 Source: Morgan McKinley

Part of the Mark Allen Group.