Only a few months ago, recruiters were adamant that to get a job in private banking in Asia, candidates had to speak Mandarin or Cantonese, and they needed to bring deep knowledge of the local market and extensive networks into the newly rich to be considered for any roles.
This may be changing, with the subtle message now filtering through that technical skills are becoming more important than language skills. Enormous competition for the region's burgeoning population of high net wealth individuals and families, combined with rising costs due, in a large part, to top-dollar salaries paid to scarce local bankers, are forcing wealth managers in some parts of Asia to cast the recruitment net further afield.
Senior private bankers can earn between HKD1.2m and HKD3m (about US$386k), while those in Singapore can earn between SGD150k and SGD250k (US$200k) according to the Hays 2013 salary guide. Related Links
The pressures being faced by private banks is evident in the comments of one recruiter at a major European bank with a wealth management operation in Asia. "Hiring is relentless," she says, referring to the growing demand and the competition for a tiny pool of appropriate candidates. And with scores of wealth management institutions in the region, all chasing millions of affluent Chinese, Singaporeans, Indonesians and other, the demand is intense.
Coutts, as another example, is planning a major hiring initiative in in the region in 2014. Michael Blake, general manager for Asia, says Coutts is planning to capture a greater share of the market. "The region is home to eight of the world’s ten fastest growing high net worth populations yet only a small part of that wealth is managed by professional wealth managers. This presents a clear opportunity for Coutts. We currently have 450 staff split between Hong Kong and Singapore, and we are planning to double the number of senior bankers in this region in the medium term."
People with knowledge of the situation say the company's focus is now on 'quality' and skills, and it is less insistent on language skills and networks.
Recruiters echo these sentiments, saying that searches for good wealth management candidates have gone international. Gerard Milligan, strategic account director at recruiters Randstad in Singapore, says companies are recruiting from competitors "or globally" and are also looking at alternatives, such as hiring 'priority' bankers or traditional private bankers 'to fill the gap'.
Recruiters say the Hong Kong and China markets are still very focused on native language speakers. Sunny Kwak, a consultant at Morgan McKinley in Hong Kong says "fluent Mandarin is a must if you want to apply for a private banking job" in the city.
Private banks that stay the course may be able to hire relationship managers from those companies that fall by the wayside. Market experts believe that consolidation is inevitable, given the higher cost-to-income ratios in Asia for wealth managers compared to their counterparts in other parts of the world. In Asia, the profit margin is 17 basis points, compared to 23 in Europe and 32 in North America.
Marc Burrage, regional director of Hays in Hong Kong, says some realignment of the industry is inescapable. "A number of international players of various sizes have entered the market and success is likely to be driven by the scarcity of experienced relationship managers who can bring a book of business."
Burrage says private bankers are notoriously difficult to move and new entrants to the market have difficulty in attracting suitable bankers. "It is likely that this fact alone will ensure that not all recent arrivals will prosper and we expect to see some of the lesser players exit the market."
Hong Kong is the most likely to be affected, he says, due to its dependence on the mainland for expansion. "Private banking brands that may have cachet in Europe or other established markets do not hold the same currency here and they will be competing against both established brands such as UBS and Chinese-owned firms managed by native Mandarin speakers."
Singapore, on the other, is likely to continue to prosper. "The emerging South-East Asian markets is on its doorstep, and the lingua franca of the region is English, thus reducing the reliance on native language speaking bankers," says Burrage.