Private banking looks like it might become an alternative career path for investment bankers forced out of shrinking divisions. But with pay not on a par and signs that wealth management recruitment is slowing, this trend could be short-lived.
Private banks increased their assets by 17% globally in 2007, according to research from the Scorpio Partnership. M&A banking is in the grips of a sudden slowdown.
Private banks’ resilience is encouraging M&A bankers to try and move into the sector. Jeremy Marshall, chief executive of Credit Suisse’s UK private banking unit, told Financial News: We have investment bankers, asset managers – you name it – applying for jobs as relationship managers.”
However, investment bankers looking to move into private banking will probably need to make the move internally. Headhunters say the likes of HSBC and Barclays Wealth are freezing headcount after two years of active recruitment, and trying to ‘sweat revenues’ out of existing staff.
Meanwhile, UBS has shifted 70 investment bankers to its private bank, and Credit Suisse and HSBC are transferring people from their i-banking divisions into their private banks. One private banking headhunter thinks there’s a whiff of desperation about this: “No private banker in their right mind is going to move to UBS, so they have to turn to other areas for talent.”
If investment bankers do make the move, they’ll probably be in line for a pay cut, with top private banking relationship managers earning £200k-£250k, according to recruiters. “Wealth management is the poorer cousin,” says Rodolphe Mortreuil, director of headhunters MKMC.
It’s also questionable whether investment bankers will make good private bankers. “In M&A you are always on the look-out for the next deal and the decision-making process is very quick,” says Mortreuil. “Private bankers have lead times of six months and don’t approach clients in the same way. There are more emotions involved in securing business – this is someone’s own money.”
