Younger private bankers in Singapore and Hong Kong are becoming increasingly frustrated at being stuck in the same junior job rank for too long – and some are trying to move banks or quit the sector as a result.
“This year I’m seeing more bankers who’ve performed well but haven’t been promoted, so their best option for a promotion is actually going to a new bank,” says Rahul Sen, a former HSBC and Merrill Lynch private banker, now head of wealth management at search firm The Omerta Group in Singapore. “One banker recently complained that he’d been a director for six years and because of internal politics saw no chance of becoming an executive director [ED] unless he moved.”
Promotions are particularly important to private bankers in Singapore and Hong Kong because their careers start late and they spend much of their 30s battling to make their mark. Most people become private bankers – and assume the entry-level rank of associate director (AD) – only after working as a mass-affluent relationship manager (serving clients worth under US$1m) or assistant private banker in their 20s.
No trust for young men
“Wealth is typically in the hands of people aged over 45 – they don’t want to give their money to a 20-something. That's the nature of the industry,” says Dominic Gamble, CEO of website Findawealthmanager and an ex-Credit Suisse private banker.
If they stay at the same employer, ADs in their early 30s often have to wait five years or more to reach director level – a senior-sounding job title designed to impress clients, but only the second rung on the private banking ladder. Younger bankers are now getting “easily frustrated” if they don’t progress their careers quickly and don’t take advantage of rising levels of private wealth in Asia, says Pathik Gupta, head of Asia Pacific wealth management at consultancy McLagan in Singapore.
He adds: “This frustration is now leading younger bankers to try to change banks more frequently. But the side effect of these aspirations is that they find themselves struggling with more sales pressure and higher expectations to perform.”
Private banks in Singapore and Hong Kong are typically conservative about promotions – another five-year-plus gap between the director and ED ranks is common – because of concerns that bankers in their 30s don’t have strong enough relationships to keep clients loyal to their platforms.
“The most important asset a private banker possesses is their clients and these relationships can only be built over many years. How long you have known clients is very important, not just how rich they are,” says Liu Sanli, practice lead of private banking at CA Search in Singapore and a former Coutts banker.
“It’s implausible that an RM in their early 30s has built sufficiently solid relationships to be promoted quickly,” adds Liu. “Even if they had, banks wouldn’t give them the benefit of the doubt. The rankings of AD, D, ED and MD are highly correlated to the number of years of your relationships with clients. It’s a long journey compared to investment banking, where relationships are shorter term and you’re more defined by your technical skills.”
Despite fierce competition for market share and talent in Asian wealth management, 30-something bankers aren’t spoon fed many of their clients, which also makes it harder for them to rise quickly up the ranks. “Private banks have been weak at distributing new clients amongst the private banker teams,” says Gamble. “Unlike investment banking, you need to hunt for business rather than being delegated business. So it takes a lot longer to prove the fruits of that hunting.”
He says frustration about sluggish promotion opportunities and an increasing regulatory burden is also leading to more private bankers leaving the industry in Asia. “Fintech start-ups and the independent investment industry are two strong pull factors at the moment.”
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