AppId is over the quota
AppId is over the quota
By Chris Vellacott and Martin de Sa'Pinto
LONDON/ZURICH | Mon Oct 17, 2011 10:51am BST
LONDON/ZURICH (Reuters) - The personal bankers to Europe's richest families are taking home much smaller bonuses as their employers tighten the purse strings to meet the costs of broader regulation and a prolonged dip in client revenues.
While bonus awards were once based mainly on individual performance, more banks are now focusing on overall profits, which have been battered by rock-bottom interest rates and low client activity, industry insiders and headhunters say.
"Even if a banker has had a spectacular year but the institution for whom they work has performed badly ... this affects their bonuses significantly," said Sophie De Ferranti, head of private wealth management at London headhunter Valens Goldberg.
Private banks are finding it increasingly hard to turn a profit as more onerous regulation since the financial crisis has lifted costs while ever more cautious clients are sticking to low margin investments and cash.
Bankers' base salaries have remained constant during the last 12 months, De Ferranti said, but performance-linked compensation has dropped "significantly".
Three industry sources said bonuses had dropped to around 20-30 percent of revenues generated from bringing in new clients and selling financial products to them, from up to 50 percent before the crisis.
Base salaries for client advisers are between 130,000 and 150,000 Swiss francs, while a banker at managing director level can expect to earn basic pay of about 250,000 francs, the sources said.
"Total earnings at banks have gone south, and this has impacted bonuses, which are based on individual, team and company performance," said one of the sources.
Earlier this month Alexandre Zeller, head of private banking for Europe, the Middle East and Africa at HSBC (HSBA.L), told the Reuters Wealth Management Summit in Geneva that pay remained the industry's principal cost.
There is less wiggle room on private bankers' pay than for their more flamboyant investment banking peers, others noted.
"Pay was never extreme in private banking; it's not as subject to a correction as in investment banking," Deutsche Bank (DBKGn.DE) global head of private wealth management Pierre de Weck told the Reuters Summit.
Also, as the market of potential clients in developed economies is squeezed by a slowing economy, banks are forced to rely on poaching top talent from each other to ensure healthy growth in their businesses.
Moreover, as competition keeps a lid on growth in developed markets, the fight for top staff is intensifying in higher-growth areas such as Singapore.
De Weck said these factors had pushed the cost of Asian bankers higher than in Switzerland, while in London staff costs are about the same as in Switzerland.
But that has served to make staffing top-heavy, with private banks targeting big client adviser names but spending little to develop less experienced bankers, one industry source said.
"There is a big divide between top and bottom levels, while the middle levels seem to be thinning. The banks are not willing to take bets on junior bankers any more," this person said.
(Editing by Will Waterman)
0 komentar:
Posting Komentar