Credit Suisse opts to groom wealth managers
Private banking giant Credit Suisse may have surprised some of its competitors with a move to hire fresh graduates for its wealth management business - a division in which staff loyalty has become a thorny issue.
Although it will continue to compete with other banks to hire experienced private banking professionals - especially those who have existing good customer ties - the Swiss bank is now also going after inexperienced graduates who aspire to become wealth managers after being trained in-house for several years.
The bank last year launched a hiring programme called "Grow Our Own", aiming to train fresh university graduates to become assistant relationship managers after one year and MBA holders into relationship managers after three years. The Zurich-headquartered bank received more than 5,000 applications for the program, though it offered only 30 vacancies.
"If you consider that a relationship manager manages around 50 clients, you would need some 70,000 RMs (relation managers) in the market. In reality, we have less than 10 per cent of those numbers," said Francesco de Ferrari, head of private banking, Asia-Pacific, at Credit Suisse.
"So the question is, where could we find the human talent to be able to cater for clients that are becoming wealthier and wealthier?" Graduates from top business schools such as the London Business School and INSEAD flocked for the positions, he said.
The scarcity of qualified and experienced talent had prompted Credit Suisse to invest in training green hands into professionals, although it would normally take two to three years to see a return from investing in fresh people, which was much slower than finding an experienced hire directly from the market, he said.
"We go to top schools globally," de Ferrari told the South China Morning Post in an interview. Asia had become an extremely fast-growing wealth management business market, he said. That translated into a high turnover in the industry, as new players kept joining the market and lured existing relationship managers with high offers.
"This industry has a very high cost-to-income ratio. You will always have a market situation in which one or two new market entrants will take out big chequebooks because they have a dream that they can be very successful," he said. "Inevitably, after a few years, the business does not work. Most end up closing or being sold. I think a lot of businesses in Asia have run on the promise of those dreams."
To serve clients with wealth of at least US$50 million was not easy, said de Ferrari, and the cost of training someone to provide an efficient service was no less than grabbing some expensive, experienced relationship manager from the market, due to both rising salaries and initial investments in training.
By hiring young workers the bank hoped to cultivate graduates into the company culture. "The most challenging thing in Asia is to get the right people on board," he added.
Bank of Singapore's Hong Kong chief executive Sermon Kwan said a relationship manager normally brought an average of 15 to 20 per cent of the assets the person used to manage to the new company. "But while experience and network obviously count significantly in our business, we believe in finding the right people that share the same culture and value with our firm," he said.