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How to keep high fliers in the nest


Bankers passing through Geneva airport recently may have noticed a new addition to the billboards advertising luxury watches and diamond rings: headhunters for private wealth managers are now touting their services too.

As private banks seek to strengthen their teams and rebuild client confidence following the fallout from the financial crisis, many are poaching from rivals or looking outside the industry for talent.

However, good private bankers are in short supply. Demand for private banking services has soared in the past decade, but banks have failed to train enough people to meet it.

A report last year by PwC found that 80 per cent of chief executives at private banks thought their wealth managers were not of “high calibre”.

Yet they were spending less on internal training than they did before the credit crunch – a trend that Jeremy Jensen, leader of PwC's European private banking and wealth management practice, believes continues today.

Insiders complain that some relationship managers at larger banks are too process-driven as a result, and have a tendency to focus on selling internal products to clients rather than building a long-term relationship with them.

This focus on process and the house view can make some wealth managers feel disillusioned.

“They feel quite often restricted and unable to take advantage of opportunities in the market that haven't been discussed in the annual committee investment meeting,” says Tim Gibson-Tullberg, the founder of headhunter Gibson-Tullberg, which has been advertising in Geneva airport for the past six months.

This swiftly leads to a desire to move on. One notable trend among the elite is to move from the larger banks down to smaller companies that allow greater freedom. Often, they take their clients with them.

“Most banks view their wealth management arms as distribution channels and they treat them like that – they hang on to most of their managers but there are some who are tempted to believe they can serve their clients better elsewhere,” says Michael Maslinski, an independent consultant to the private banking industry.

But moving too frequently risks losing their clients' trust. Mr Maslinski believes that a good relationship manager should move no more than twice in his or her career.

The issue of churning has beset the private banking industry in recent years. Client relationship managers now switch jobs every five years, according to Mr Jensen.

“Unfortunately, poaching has become a fact of life for the sector,” he says.

For those who do not take their clients with them, this can damage the image of the long-serving wealth manager who offers families a tailored service that the private banking industry prides itself on.

Mr Gibson-Tullberg says that larger private banks have been setting up their own internal recruitment services, but the focus tends to be to get people in on the lowest possible pay package – an offer that the best private bankers will scorn.

In the past month, Mr Gibson-Tullberg has placed two senior private bankers with smaller wealth managers on equivalent or higher salaries to their existing pay package – which he believes disproves the theory that moving out of the big banks means taking a pay cut. Smaller banks tend to offer profit-sharing arrangements that can be highly lucrative.

Mr Gibson-Tullberg says that while 90 per cent of the people he places are from within the private banking industry, 10 per cent are 'lateral hires' – former tax advisers, lawyers, traders or people in film finance.

“The industry badly needs that, as the lateral hires bring in fresh viewpoints and also don't come in with the rather stuffy view and 'pull pull' policy of trying to drag a client base from one place to the other,” he argues.

He says that what the industry needs is more training – but frequently private banks are reluctant to undertake training themselves, as they fear people could then be poached.

Mr Jensen says that typical training regimes undertaken by other industries to retain staff, such as coaching or mentoring, are things the private banking sector women handbags has not yet perfected. He believes some chief executives fail to listen to the needs of their wealth managers or understand their career objectives,

But to a certain extent, in an industry that prizes long-term steady client relationships, the career path for a client relationship manager is hard to chart. And crybud for the employers, the big question, says Mr Jensen, is: “How do you retain your high fliers?”