BSI bankers in Singapore are set to move to EFG as their firm is forced to shut down in the city state following a money-laundering scandal. But that doesn’t mean all of them will be happy at their new home.
Earlier this week the Monetary Authority of Singapore (MAS) ordered BSI to close for failing to prevent suspected money laundering and bribery relating to its dealings with Malaysian state investment fund 1MDB. The regulator is also probing six of the Swiss bank’s staff and former staff.
Other employees – BSI has a headcount of about 200 in Singapore – can count themselves lucky. EFG is buying BSI in a deal agree in February and it will offer jobs to most of BSI’s Singapore staff, according to private banking sources.
“Generally, I don’t think BSI staff getting roles at EFG will be an issue,” says a wealth management consultant with knowledge of both banks. “There might be some redundancies due to duplicated headcount in support functions, but you always get that in a takeover.”
Front-office private bankers should be able to move as long as they pass compliance tests at EFG, which are expected to be even more rigorous than normal in the aftermath of the MAS ruling. “EFG will do more due diligence on BSI relationship managers and their clients, and might need to beef up its own internal compliance setup,” says the consultant.
Some of the former BSI bankers who move to EFG may not want to stay there long term, however.
“Without EFG’s buyout the bleeding of client assets at BSI would have been substantial by now. And EFG is a known brand in Europe,” says Liu San Li, an ex-Coutts banker, now head of private wealth management at I Search Worldwide in Singapore. “But in it’s relatively unknown to a lot of Asian clients.”
Liu adds: “Some RMs in Asia wouldn’t jump to join EFG out of choice because they aren’t receptive to its business model. Rightly or wrongly, the perception of it as lacking products and being a brokerage bank persists.”
Josie Ling, head of private wealth management at search firm Eban in Singapore, says some BSI relationship managers have contacted her in recent months about alternatives to joining EFG.
But will other private banks want to recruit people who’ve worked at a firm under regulatory investigation?
“In the short term they will be very cautious about hiring them for fear of potential compliance cases popping up,” says a private banking headhunter who asked not to be named. “This doesn’t mean intentional wrong doing from the individual RMs, it's more about the relatively lax control on business dealing at BSI as a whole.”
BSI RMs who move to EFG and stay there for a year or two shouldn’t face many problems in the job market. “Opportunities for RMs who keep a clean book of clients would be pretty good,” says Ling. “There will be some questions initially about the quality of your assets, but once that’s cleared, it’s back to the usual questions of AUM, revenue targets, and type of clients.”
The more senior BSI bankers are more likely to stay put at EFG. “EFG is a good place for established RMs to build their own little franchise within the bank,” says explains Clarence Law, a Singapore-based business advisor in private banking.
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