Salary survey: Private banking pay shifts in US
Client relationship managers at top tier private banks in the US are increasingly being paid a commission related to the revenues they generate and the value of new assets they bring in.
This the finding of a pay survey by Napier Scott, the UK-based search firm, which also operates in the US market.
Jim Paterson, private banking specialist at Napier Scott, said first tier private banks, most of them US-based, have moved away from discretionary bonuses for client relationship managers, in favour of more formulaic bonus schemes.
US-based managers at tier one banks can now receive bonuses equivalent to up to 35% of the revenues produced by the assets they introduce, said Paterson. This is in addition to average salaries of $148,000 (80,000) for senior client relationship managers and $92,500 (50,000) for junior client relationship managers.
Second tier banks continue to pay discretionary bonuses. Paterson said the discrepancy is encouraging entrepreneurial client relationship bankers to work for first tier institutions, where they are more likely to be rewarded for success.
The survey found senior client relationship managers working for second tier US banks earn average base salaries of $107,000, while junior client relationship bankers at second tier banks earn base salaries of around $76,000. Paterson said bonuses are typically 10% to 20% of base salaries.
At current exchange rates it also showed that private bankers in the City of London earn more than those in the US, who have been hit by the declining dollar. Senior London-based client relationship managers at tier one banks earn an average basic salary of $175,000, while junior ones earn $129,500.
Senior London staff at tier two banks earn an average of $138,800, while junior staff earn $92,500.
Napier Scott's survey was based on information from 24 banks, covering hundreds of private bankers.
A European salary survey for private bankers by Morgan McKinley, the London-based recruitment firm, found client relationship managers were paid less generously. From conversations with more than 300 private bank employees in Europe, Morgan McKinley found managers with four to eight years' experience were paid 45,000 to 60,000. Those with more than eight years experience were paid 60,000 plus.
Jeremy Canning, head of fund management recruitment at Morgan McKinley, said formulaic bonuses are also becoming more common in London and are typically equivalent to 2% to 3% of money brought in.
