Think Asian private banking jobs, think long client lunches, regional jet setting and managing money for billionaires. Right?
Not quite. While private bankers in Asia may be perpetually in demand, their jobs are getting more “boring” as the compliance burden grows.
Wealth managers in the APAC region are “bogged down in regulatory compliance”, according to the Global Wealth Report from EY, released earlier this month.
APAC has the highest proportion (39%) of firms in the wealth sector citing compliance as the main focus of their strategic budgets – the figures for European and North American firms are only 11% and 9% respectively.
In APAC, 54% of the wealth managers surveyed see regulatory change in a negative light, compared with just 22% of respondents in North America.
One private banker turned headhunter in Singapore says more relationship managers (RMs) in Asia are complaining about the amount of “boring” time they now spend liaising with compliance teams.
And over the past year recruiters say an increasing number of relationship managers (RMs) have cited the regulatory burden or problems interacting with their bank’s compliance team as reasons for wanting to change jobs.
“I’ve recently heard some absurd stories from frustrated RMs, such as a compliance request for proof of original source of wealth dating back to the 1960s,” says former Merrill Lynch private banker Rahul Sen, now head of wealth management at search firm The Omerta Group in Singapore.
“But the problem for RMs who want to move is that while some banks are slightly stricter in compliance issues than others, the story is more or less the same across the industry,” says Sen.
Private bankers in Asia now face more regulatory scrutiny “at every stage of their client interaction – from onboarding to investment advice and even when meeting clients”, adds Pathik Gupta, head of Asia Pacific wealth management at consultancy McLagan.
“Cross border restrictions and investment suitability requirements have made client servicing more elaborate,” says Gupta. “While some of these regulations are to protect clients, the way regulators prescribe them and banks adopt them makes life more challenging for bankers.”
“With the squeeze on the offshore wealth model, compliance now runs private banking Asia,” says Sen. “The regulators don’t want to portray Singapore and Hong Kong as tax havens but as excellent product-driven private banking centres,” adds Sen.
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