The growing population of the next generation of millionaires in the Asian region is creating a battlefield where firms are offering salary hikes of as much as 30 to 45 percent for poached wealth managers from the competing companies. The average increment is the highest observed in more than a decade according to industry experts.
The intensity for job poaching is particularly observed in Hong Kong and Singapore where there is a shortage of wealth managers but high demand for such executives. The two cities have fewer than 10,000 wealth managers according to Bloomberg, citing data from Credit Suisse Group AG. On the other hand, there are more than 2,000 new millionaires every day in the region in 2017 alone according to data from Capgemini SE.
One predominantly sharp demand is for wealth managers that know how to speak Mandarin. This need is sparked by China which Bloomberg said is Asia's rapidly growing market for individuals who are experts in private banking. The country at present has 1.2 young millionaires and many of them are acquiring assets, setting up businesses, or sending their children for education in Hong Kong and Singapore. In fact, more than a third of private condos in Singapore are owned by Chinese nationals since 2013.
One Mandarin speaker working as a private banker revealed to Bloomberg that he and his colleagues were offered a 30 percent salary increase when they transferred to a wealth management firm in Singapore. The said firm has also been expanding its offshore China team, the banker told Bloomberg.
The demand for wealth managers coming from Asia may soon double or even triple as more countries in the region are seeing a growing population of millionaires. The Knight Frank's 2018 City Wealth Index released in March stated that China's millionaires will double in the next five years. Japan, meanwhile, has already witnessed a 51 percent growth in the number of its millionaires. India saw 71 percent growth, Indonesia at 66 percent, while Malaysia had 65 percent.
While wealth managers could easily take advantage of the market movement, firms seem to be in an unfavorable situation.
Geoffrey Bevan, a private banking recruiter from Asia Carbon Search, said executives who transferred to competing company usually bring with them half of the asset that they manage for their clients.
In one case, a senior bank executive brought with him his best staff when he decided to accept an offer from a competing firm.
For Benjamin Cavalli, head of private banking for South and Southeast Asia at Credit Suisse, the intense talent poaching among wealth managers is also creating bank executives who are seemingly more concerned about their own gains rather than establishing a genuine and long-term relationship with their clients.
