Wealth managers in the Middle East have gone from being the hottest property in town to suddenly finding themselves on the streets as international private banks have pulled back from the region.
During the boom years, private bankers were headhunted for ever-more lavish pay as an increasing number of banks chased a limited supply of talent. Job-hopping was common, but more recently redundancies have become commonplace. The result is a Catch 22 – the banks that are hiring now want a proven track record, but the available wealth managers have changed jobs too often to be considered.
“Private bankers moved for massive premiums in recent years, but as more banks retrenched and cut jobs we’re seeing CVs with three jobs in three years,” said Shane Phillips, managing director of Dubai-based headhunters Shane Phillips Consultants. “It’s been something of a massacre in recent months, and the banks that are recruiting are more closely examining people’s track records to ensure they get top performers.”
HSBC cut around 50 people in its Middle Eastern private bank last year. More recently, Swiss banks Vontobel and Pictet decided to close down their onshore private banking operations in Dubai. At Vontobel, all nine private bankers in the region lost their jobs.
The private banks currently hiring in the Middle East are bemoaning the “churn” in the industry. Lobard Odier’s Middle East head, Arnaud Leclercq, told the National recently: “People have had more instability in their jobs, they've jumped ship every few years. You can't do that in private banking.”
Similarly, Mannan Adenwalla, CEO of LGT in the Middle East, which has plans to hire 40 private bankers in the region, told us that the people it wants to hire “should have been in the business for at least five to ten years and have demonstrated their abilities servicing our target client segments.”
According to the 2013 Wealth-X Ultra Wealth Report, the number of UHNW individuals in the Middle East is still growing – by 2.2%, to stand at 4,595. Saudi Arabia is the biggest market, with 1,265 UHNW individuals with a combined $230bn. The UAE is the fastest growing, however, with a 4.5% year-on-year increase to take its UHNW individual population to 810. However, overall wealth in the region slipped by 2.2% to $710bn, said the report.
Average salaries for wealth managers in the Middle East have largely remained stable year-on-year, according to figures from recruiters The Charterhouse Partnership. A relationship manager should now expect AED21k ($5.7k) a month, or $68.4k annually, it suggests.
Any wealth manager looking for work now needs to be either specialist, or willing to look further afield, said Magdy El Zein, managing director of Boyden Middle East.
“Private bankers are looking for Arabic speaking relationship managers with a strong network of clients, particularly within the non-resident Indian (NRI) population,” he said. “The clampdown on suitcase bankers in Saudi has also meant more international banks setting up on the grown, so the kingdom is providing the bulk of new opportunities currently.”
Julius Baer’s chief executive Boris Collardi said there was potential for it to double the size of its Saudi operation, while both Barclays and J.P. Morgan are hiring in the kingdom.