Singapore bankers take jobs with lower pay
Surging growth in family offices setting up in Singapore is fuelling demand for finance professionals that could trigger a brain drain of relationship managers from the private banking industry.
The boom in family offices, much of it driven by start-up firms relocating from mainland China, has led to attractive bonus packages for private bankers, designed to draw them from the relative institutional safety of their current roles, according to recruiters.
Singapore now has around 700 family offices, up from 400 as recently as the end of 2020, and up sevenfold from 2017, according to government estimates.
“We are seeing a lot of family offices trying to hire bankers,” says Edward Park, associate director of financial services at Cornerstone Global Partners in Singapore.
At multi-family offices in particular, a recruitment tactic of late is to offer packages that include minimal or no base pay, but higher commission-based compensation than is typically offered at private banks. “Usually the ones [relationship managers] that are doing very well are not inclined to such an offer,” says Park.
He notes that Singapore is also benefiting from a rise in both multi-family offices and single family offices shifting assets under management out of Hong Kong. “The only way a family office can lure private bankers from a big organisation is by saying ‘we’ll give you bigger commissions, so if you bring the same asset under management over to us, we might be able to give you better commissions,’” says Park.
Another recent tactic by family offices is to hire more late-career finance professionals. In some instances this pool of workers is willing to accept less generous terms. “There are some cases where family offices are looking for people who are retrenched or pretty much into semi-retirement mode, and that’s when they do go for lower [base] compensation,” says Christina Ng, managing director of the Asia Pacific region at LMA Recruitment.
Still, recruiters say that differences in work culture remain the main criteria in the decision to join a family office or stay at a private bank.
Jobs at small family offices can entail working closely with family members, which can result in arguments depending on the office politics and personalities involved. In small family offices, fund managers have more freedom to choose how funds are allocated, whereas investment selections at larger private banks can be more restricted.
Smaller family offices are also less affected by the need to meet industry benchmarks. “Private banks have to take into consideration ranking versus performance of their peers, which would not happen so much in a small family office,” says Ng.
However, the internal culture of many mainland Chinese family offices has proven problematic for some financial professionals in Singapore. “We’ve seen a lot of failed cases [of senior hires] because in the end these family offices are not willing to compensate these guys at the level they want, and they’re not really trying to localise,” says Park.
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