Money Managers, Underwriters Prepping for Bountiful Bonuses

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If you’re looking for job security and a growing paycheck, money management appears to be the place you want to be. Wall Streeters working at asset managers, hedge funds and firms concentrating on high net worth clients will see a 10% to 15% jump in incentivized compensation in 2013, according to a new study.

The report, compiled by compensation consultant Johnson Associates, forecasts a moderate uptick in bonuses across all financial services, with the asset management sector seeing the most meaningful increases. The market is up and inflows are outmatching cash being pulled by investors.

Bonus forecasts in investment banking are much more muddled.  Despite a hot start in the Americas, advisory units had a rather slow first quarter. Incentivized compensation in the M&A sector will increase between 5% and 10% in 2013, pending expected improvements in the market. Investment banking underwriting will see as much as a 20% jump in bonuses – leading every other unit – but the expected gains are a bit less impressive when you look at the comparative point. IPO activity was sluggish in 2012 as economic uncertainty halted public offerings.

Not surprisingly, those working in commercial banking and retail banking will have a rather flat 2013. Interest rates are just too low.

Incentivized compensation will be better in the U.S. than Europe in most every sector in 2013, but you don’t need a forecast to tell you that. Just wait until bonus caps are implemented.


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