Private banking: Big Four v foreign firms
NAB is targeting the ultra rich by setting up a new wealth unit. Is this the start of a spike in private banking hiring? And can the Big Four really compete with foreign firms - such as the newly formed Morgan Stanley Smith Barney - in the battle for bankers? "No" is perhaps the best answer to both these questions.
NAB Private Wealth has created a new "wealth services" division to provide advice and investment products to high and ultra-high-net-worth individuals. It sits alongside the bank's traditional relationship banking capability and brings together its services across investment, research, financial planning, estate planning, philanthropy and private custody.
But it seems like the NAB move is mainly an internal restructuring. Domestic banks are unlikely to begin hiring private bankers in great numbers any time soon.
At Westpac/St George recruitment is down on last year; CBA has a freeze on most private banking jobs; while ANZ is hiring "only a little", according to one headhunter who asked not to be named.
"There has been little activity in private banking of late," adds Jane McNeill, senior regional director at Hays.
The news for those already in employment is a lot better. "Not many relationship managers are losing their jobs. You're not going to cut someone who has good networks," says Tim Beach, a front-office recruiter at Robert Walters.
Hiring, when it happens, is focused on bankers who can bring clients to their new firm, adds Beach. McNeill agrees: "A strong client book is certainly viewed in a positive light since employers want candidates that can add value."
This passion for funds under management (FUM) is more pronounced at Macquarie and global giants like Credit Suisse, UBS and Morgan Stanley Smith Barney. In the current market, these firms are no longer so willing to nurture potential talent and want senior pros who can hit the ground running. Credit Suisse currently only considers private bankers with existing funds of $100m or more, according to the anonymous headhunter.
The talent pool is small for foreign firms because Big Four bankers don't usually have enough FUM and business development skills to be considered, says Paula Horta, a consultant at the Brooklyn Group. "With some exceptions, most international private banks wouldn't hire someone from the domestics. They want candidates from each other," she adds.
There isn't much candidate traffic the other way either. Horta explains: "Most high-net-worth private bankers still prefer to work for the foreign firms. A Big Four bank largely limits you to selling its own products and dealing with its existing clients, and you don't get exposure to more complex products. It's a different skill set."
McNeill says there is limited crossover between the locals and the domestics. "At present much of the focus of private banking in Big Four banks is more lending related, so there is not always synergy between the two," she adds.
Bucking the trend is NAB Private Wealth chief investment officer Philip Kimball. He joined NAB from Citigroup in February 2009 to augment its investment capability.
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