Maybe private banking jobs aren't so safe after all
Wealth management is definitely holding up better than other areas, with many firms continuing to expand in the face of the financial crisis. But it's not all good news for private bankers.
Barclays Wealth, which until very recently was scooping up people from just about any background and remoulding them as private bankers, has recently announced 500 redundancies, which it says "will predominately affect our UK operations and apply to staff across all job functions."
UBS is also rumoured to have removed people in London and headhunters in the private banking sector confirm that recruitment has definitely slowed.
"There are people that are available this January that would have been snapped up this time last year," says Dudley Edmonds at Culliford Edmonds Associates.
Nevertheless, there are signs of promise. In the past couple of weeks alone, the following firms have announced senior hires (deep breath): Brook McDonald Group, Baring Asset Management, Deutsche Tilney, Helvetica Wealth Management Partners, Ingenious Asset Management, Kleinwort Benson, RBC Wealth Management and State Street Global Advisors.
What's more, St James's Place, says it increased the number of partners it appointed by 7% last year over the same period in 2007 - in spite of a 2% slump in sales. Coutts also has plans to expand its Guildford operation.
Both UBS and Credit Suisse are expected to renew their commitment to private banking when they announce their results next week. And when Morgan Stanley revealed further layoffs this week, its wealth management arm notably escaped the axe.
Although poor performers are being weeded out, the emphasis on private banking is likely to continue for one simple reason: banks need cash. "Wealth management is still a vital source of capital for investment banks," says Sebastian Dovey, managing partner at wealth management think-tank the Scorpio Partnership.
For the moment, however, it's independent wealth managers rather than banks which are hiring.
Rodolphe Mortreuil, of private banking headhunters McKinsey Mortreuil Clarke, says banks are a bit disorganised: "Recruitment budgets are late in being approved, and those that have them confirmed are still unclear about their hiring strategy. They point to plans for growth, but have yet to go into the firm details."
