How much am I worth? Private banker, five years experience
In the 1970s Harold Wilson, the British prime minister, famously referred to them as the "gnomes of Zurich". Middle-class Britons entrusted them with hard-earned (or ill-gotten) gains to escape the high tax rates then imposed by the Labour government on the wealthy to "make the pips squeak".
Thirty years on, the world of private bankers is rather different: although Switzerland still has over 450 banks operating with the sole purpose of private money management - and Basel and Zurich remain key destinations for those hoping to evade fiscal supervision, along with such places as Liechtenstein and Andorra - much of the real business has moved elsewhere.
In Britain and the US bulge-bracket institutions, middle tier banks like Pictet and Julius Baer and small boutiques all compete to manage the money of high net worth individuals.
Harry Pilkington of Armstrong International said: "The sector has changed dramatically in recent years. Before, banks looked after money, with security the main focus; today, they manage it for the biggest possible returns, with clients increasingly demanding more from their private banker. The market is highly competitive and fast developing.".
The recovery in stock indices from their lows a year ago has reinforced this, enabling high employment in the sector and shoring up earnings expectations: according to Christopher Sulger-Buel of Sulger-Buel & Co, any private banker worth his or her salt is doing very well, thank you.
However, Pilkington said the market has become split increasingly between individuals who focus on looking after the client and those who focus on products - finding new avenues, including hedge funds and derivatives, into which to channel client money for a better return than that offered by competitors.
"These teams are as significant as each other - the point is that in today's market, with all its demands and given the range of new products available, it simply isn't possible to know and do everything," he says. The impact of this evolving private banking market has even spread to Switzerland, where despite appearances suggesting little has changed, even small traditional family-run operations know their limitations.
"A private banker is like a family doctor - he knows where the best specialists are and how to use them," he said.
So what has this meant in salary terms? Pilkington says private banks pay such a wide range of base salaries and bonus that it is impossible to generalise about a going rate: a junior at a small Swiss institution could be earning around €75,000 ($60,000) salary a year while a private banker with five or more years experience at an organization such as Merrill Lynch could be pulling in a total of $2m-$3m a year.
Sulger-Buel said the biggest earners are those who have the best understanding of what products are available on the market and who really understand client needs.
"The really good private banker is somebody who understands an individual's risk threshold and adapts his or her needs to what is available on the market," he said.
He suggested a private banker with five to seven years experience could earn a salary of 70,000-100,000 (€125,000 - €180,000) with bonuses of 25%-35%; US investment houses will tend to pay rather more bonus whilst London-based institutions - where employment conditions are more stable - may be more modest.
He stressed that smaller institutions do not underpay, although the banker may receive part of his or her earnings through shares in the company or some similar scheme.
And the outlook? Sulger-Buel said confidence is key: as long as equity and other financial markets hold up, prospects for private bankers remain rosy.
Figures and commentary by Sulger Buel & Co and Armstrong International
