Asset managers are increasing pay, but Scotland is not the place to be for big bonuses

If you're working in a distribution role in a fund manager north of the border, you're more likely to have new job opportunities available to you. However, investment professionals are still being offered bigger pay rises.

Generally, despite reduced job opportunities and the prospect of redundancies, most fund managers are still paying more. Total compensation costs have increased by an average of 18%, according to a new survey from PwC. Bonus payments make up the bulk of this, having been hiked by 30%, while base pay has increased by around 4%, suggests the research.

However, fund managers are more willing to pay for top investment staff, rather than those in distribution roles.

"This reflects pressure in the markets; fund managers have performed to protect and grow the investments they have, exactly what they are measured against, but market uncertainty resulted in pockets of poor sales activity, which affected sales-related incentives," says Tim Wright, asset management reward leader at PwC.

In Scotland, it's evident that fund managers have been more generous with pay this year. Allianz Trust increased executive pay, Martin Currie re-introduced bonuses this year and Standard Life upped pay across the board this year.

However, in the current market, where most asset management firms north of the border have curbed recruitment, are pay rises still on the table?

Douglas Kinnaird, director of Scottish financial services headhunters Macdonald Kinnaird, says that Scottish fund managers are willing to pay "what it takes, within reason" to secure the services of senior investment professionals, but that guaranteed bonuses are not on offer.

"There are three types of packages on offer to fund managers in Scotland - those in smaller firms, which don't pay big money in any shape or form, those within the big institutional players, where the salaries aren't overly large but the benefits are very good and those in entrepreneurial ventures, which offer high basic salaries but little in the way of benefits," he says.

UK fund managers are also unable to offer their employees guaranteed bonuses for more than one year, and this is hampering their ability to hire and retain staff. Increasingly, they're being outbid by firms in the US, Asia and Switzerland, suggested PwC.

Scottish fund managers, particularly the large institutions like Scottish Widows Investment Partnership and Standard Life Investments, are looking internationally for new recruits. However, Kinnaird believes that the threat from overseas is not overly relevant to firms based north of the border.

"If you're an individual who is only looking for really big money, you would have left Scotland a long time ago," he says.