Stormin' JPMorgan plans private banking binge, but its targets look too terrifying
JPMorgan has big, big plans to boost its private banking presence in Asia, but a tight hiring timescale and a lack of available talent could derail any attempts to meet its headcount targets.
The firm's private banking unit, which currently employs 400 people in Asia, intends to increase the number of relationship managers (RMs) in the region by 40 percent this year and next, after growing at a similar pace in 2009, according to a Bloomberg interview with Douglas Wurth, chief executive officer for international private banking.
Headhunters who specialize in the sector, however, are skeptical that the firm can continue to expand so rapidly.
"It's unrealistic and very difficult to hire that many RMs. When UBS said it wanted to hire 400 early this year, a lot of people in the industry just laughed. You can't find them. They just aren't out there," comments one recruiter, who asked not to be named.
So is there any way to hire in bulk in private banking? "Either you have to compromise on quality, which is obviously bad, or get very aggressive on compensation, but that's a high risk strategy," he adds.
Alternatively, JPMorgan could poach entire teams, like BSI did to RBS Coutts. "Doing anything on this scale via individual moves will be almost impossible. Teams will have to jump ship if JPM is to get anywhere near reaching its targets," comments the anonymous headhunter.
UBS, Citi and Credit Suisse will probably provide the best hunting grounds for JPM. For one, moving clients to another large firm, rather than a boutique, is a slightly easier sell. More importantly, says the recruiter, there are still a lot of disillusioned bankers at these firms.
And there is also speculation that Peter Flavel - who led Standard Chartered's private bank until JPM poached him in July as Asia CEO of private wealth management - could target bankers at his old firm.
It's a mad market
Whichever banks JPM is trying to wrench RMs from, the employment environment in Asia - from developed hubs Singapore and Hong Kong to emerging markets China and India - is highly competitive. Key hirers include RBS Coutts, Bank of Singapore, Deutsche Bank, UBS, Standard Chartered and Clariden Leu.
"Every bank is looking for senior relationship managers and every bank is having trouble finding them," says another recruiter, who asked not to be named.
"Good bankers can take their pick of where to go because there's a skill shortage in Asia. But if you're a high performer in your current job, there must still be a very strong reason to leave. Often it's not worth the risk because clients tend to keep their money with the bank and banks are imposing tougher protection measures," he adds.
JPMorgan is still JPMorgan
But although there are doubts about JPM meeting its own massive headcount targets, it remains an attractive proposition for relationship managers who want to move jobs.
"If they go to JPMorgan, bankers can pick up new clients by trading off the JPMorgan name. JPM is run more like a brokerage and pays highly incentivized bonuses, as opposed to the lower discretionary ones at UBS, which is also a big draw card," says the second anonymous recruiter.