Private banks in Hong Kong continued to add relationship managers to their headcounts in 2020, albeit not at the same rate as the previous year. Private banking remains a priority for many financial institutions in the city during the pandemic.
HSBC is a case in point. Even as the firm cuts 30,000 jobs globally, it is expanding its private bank in Asia. It plans to recruit 500 private banking and wealth management staff in Asia by 2022, including an undisclosed but significant number of Hong Kong private bankers.
In Hong Kong, banks such as Julius Baer, Nomura, and Goldman Sachs are also hiring, and the job market remains comparatively healthy. The industry is becoming increasingly focused on serving Chinese clients, a trend that is likely to continue under the new Wealth Connect programme, which lets Hong Kong private bankers serve clients across southern China’s Greater Bay Area.
As private banks in Hong Kong increase their headcounts, it’s increasingly important for relationship managers to know how their compensation compares to the market average.
If you’re wondering whether your current private banking salary in Hong Kong is above or below par, we've averaged out minimum and maximum base salary data from several recruitment firms to produce the table below for relationship manager pay. And we’ve done this across five broad levels of seniority (job titles in private banking differ from firm to firm – some include the term ‘director’ within ranks two to four, while others prefer ‘VP’). At executive director/SVP level, for example, your private banking base salary could be up to HK$2,450k a year.
The average pay rise for RMs moving between private banks in Hong Kong in 2020 (and going into 2021) is between 20% and 30%, depending on their seniority and track record, says former Merrill Lynch private banker Rahul Sen, now a global leader in private wealth management at search firm Boyden. Boutique private banks, however, typically offer more generous increases, primarily to attract new RMs who might otherwise be put off by their limited platforms.
Meanwhile, as all private banks in Hong Kong increasingly compete to manage the offshore assets of Chinese clients, HK-based RMs who cover Greater China are also now landing above-average pay hikes, says Jack Metters, team lead for wealth management at Selby Jennings in Hong Kong.
But there’s a potential downside to rampant pay inflation in private banking: if you land a lucrative new job, you will face onerous new targets. “Private banks realise they need to pay top dollar to recruit and retain the best bankers in Asia, but at the same time, non-performing bankers are let go quite aggressively,” says Sen, now a global leader in private wealth management at search firm Boyden. “Newly hired bankers are given about 18 months to two years to break even or get near, but after that the cuts can be quite drastic,” he adds.
Private banking bonuses in Hong Kong
Your private banking bonus percentage in Hong Kong depends more on which type of bank you work for than how senior you are – although MDs are more likely to receive bonuses at the maximum level for their firm than AVPs are (and their larger salaries will ensure a higher actual bonus payment).
As the bonus table below shows, UBS and Credit Suisse, Asia’s largest private banks, offer the smallest bonus percentages. Your total bonus figure at these firms is likely to be competitive, however. “There are RMs at UBS and CS who produce much higher revenues than they would elsewhere because they have more options in each product category and have tier-one product support and platforms,” says a former private banker. “This can collectively lead to more revenue generated to compensate for a lower bonus ratio.”
While Covid-19 hasn’t yet impacted private banking salaries in Hong Kong, it will reduce 2020 bonuses, when they are paid at the start of next year, says headhunter Sen.
Photo by Connor Wang on Unsplash
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