Client facing private bankers have to spin a lot of plates – from being financial experts to fostering closen relationships with clients, all whilst adhering to regulation. John Schaffer looks at how private banks in Europe approach the recruitment of relationship managers and their methods for fostering talent in-house
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Attracting the best talent is one of the most significant challenges for private banks. Staff movements are consistently fluid as the demand for quality talent is high. Thus, the acquisition and retention of high value talent is a constant uphill struggle for private banks and a top-of-mind priority for C-level executives.
Banking as a career choice is perhaps losing its shine as the gold standard for new graduates entering into the workplace. The lure of technology giants such as Google, Apple and Amazon is perhaps greater, with the perception of being more progressive and lacking the stuffy reputation that financial institutions carry. Yet private banking is perhaps the exception rather than the rule when it comes to finance careers – especially in a client facing relationship management (RM) role.
The front line of private banking is still heavily reliant on personal relationships, considering the highly complex demands of high net worth (HNW) clients. But being in a client facing role does not mean that RMs have any fewer requirements to be financially astute, and it is the responsibility of banks to make sure that staff are well equipped to
handle the myriad tasks that are required of a private banker.
As regulatory burdens increase on private banks, appropriate financial training for RMs becomes an integral part of institutions’ risk management, alongside providing consistent opportunities for RMs to buff up their skill sets.
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By GlobalData
What are private banks looking for?
David Hulsenbek, head of human resources at ABN AMRO, tells PBI that in order to service clients to the best of the bank’s ability, it needs to make sure that its RMs understand the boundaries of all aspects of the trade.
“We believe the days are over when private banking was just about networking. Of course it is still important to be able to effectively manage relationships and develop deep relationships with our clients – but increasingly,
we need our people to be sharp and focused on the regulatory side of our business,” he says.
Sandra Dawson, global head of recruiting at UBS Wealth Management, says: “This is a people business whereby people have to be able to build and foster relationships from the outset. An awareness and understanding of emotional intelligence is needed, and we also expect them to have a good commercial mindset. Let’s not shy away from the subject; these are eventually sales roles, so people need to have an interest in clients’ needs as well as aspiration to acquire clients and close a deal.”
India Harvey, recruitment consultant at Hays Financial Markets, tells PBI that UK private banks are often looking for RMs with a substantial book of clients that they can bring with them.
“Due to the changes in the market following the Retail Distribution Review (RDR), private banks will usually only bring someone in with a full client book and substantial assets under management (AuM). These expectations can be hard to meet and candidates do not always want to have to rely on bringing this kind of client base with them to join a bank,” she says.
Attracting premium talent
Sarah Deaves, private banking director at Lloyds, tells PBI that the aim for the bank is to develop the talent it recruits and maintain the “high levels of client service that we provide”.
“We recruit people who can be at different stages of their career and have different levels of qualifications, and we look for people through a variety of channels, both internally and externally, such as social media and recruitment agencies.
“Our population of private banking and advice managers includes a combination of long standing colleagues, ex-financial advisors with experience in other financial services businesses, and colleagues that are currently in our emerging talent programmes, like graduate schemes.”
Dawson, UBS, tells PBI that the bank actively recruits through a number of “recruiting hubs”:
“We are in a headhunting situation whereby we identify, map and pipeline talent globally. We have a number of recruiting hubs based in Hong Kong, Singapore, Zurich, Geneva, Krakow, and London, and within those regions we have specific combinations of recruiters and researchers looking at the markets, engaging with talent and having
exploratory conversations to pitch UBS as an employer of choice.”
For large global institutions such as UBS, the problem is not attracting applicants for private banking roles but to hire the ‘right’ people. Dawson says that UBS predominately hires talent directly and tells PBI that only 10% of wealth management staff is hired via third party recruiters. She adds that a large amount of talent acquisition comes from
internal moves, with a significant amount of crossover between wealth management, investment banking and asset management.
For boutique private banks, on the other hand, the quality talent acquisition challenge is competing with the lure of the larger players. Ashish Mehta, head of human resources at Arbuthnot Latham, tells PBI that in comparison to large private banks, Arbuthnot is able to offer “a warm and friendly environment for people to thrive and progress their careers”.
“Despite our growing size, there is still a ‘family feel’ to the business, and a culture of this nature is hard to replicate. People are given the opportunity and freedom to truly ‘make a difference’ at all levels,” he explains.
Arbuthnot’s UK team consists of 48 private bankers (of which 17 are commercial bankers), nine wealth planners, and 10 investment managers. Mehta adds:
“On average we receive 30 applications per role. However this does vary from role to role and can be from 10 to 300 applications, dependant on the position on offer.”
Retaining senior staff
The retention of the most senior talent is certainly a challenge for private banks. Rachel Montgomerie, global head of HR at HSBC Private Bank, tells PBI that solid progression opportunities paired with individual
mentoring helps to retain staff members.
“As part of a network of businesses connecting the world, we can offer exceptional career progression opportunities. For more senior staff we provide individual mentoring that helps staff benefit from the experience
and insight of colleagues in leadership roles, and also the chance to be involved in growing the careers of more junior team members. There are plenty of opportunities to move globally, and individuals are actively expected
to work on self-development plans.”
Deaves, Lloyds PB, says that flexibility incentivises staff to continue working with the bank: “We have a strong focus on agile working, using new technologies such as WebEx and allowing people to work flexible hours that suit their circumstances. This helps to create more time for our colleagues to spend with our customers, rather than spending time travelling or working away from home.”
Hulsenbek, ABN AMRO, says the Netherlands headquartered bank is confident in its ability to retain private bankers:
“There is no specific incentive for senior staff to not leave the bank, as we feel this is not something to strive for. We believe that regardless of age, our staff are looking for a challenging role in a challenging environment, where they are focused on providing our clients with the best solutions. The wider ABN AMRO organisation has many options to diversify ones career.”
Luring the next generation
Dawson, UBS, says that attracting the new breed of millennial graduates into the private banking profession can sometimes be difficult:
“The old world of the financial services sector enjoyed the gravy train for a number of years, but has met some resistance with new and broader regulation, the arrival of fintechs, entrepreneurial start-ups, and obviously the advancement of technology, which has a strong brand to attract the next generation.
“Dare I say it, but for some, the likes of Google are the automatic go-to, and I can understand how that would be attractive for the millennials, but at some point in people’s careers, they may like to take a more structured approach to their career and this is where we feel our brand plays its part. Within UBS Wealth Management for
example – our average tenure is nine years and people really do have long careers. Having worked in London myself for 17 years (UBS six and a half years) and Switzerland for nearly three, there is a different attitude and
approach, with a greater appetite towards career longevity in Switzerland.”
Conversely, Harvey, Hays Financial Markets, suggests that private banking roles are still attractive for new graduates. She tells PBI: “The industry is viewed as glamorous and lucrative, but it is incredibly competitive.
Opportunities for new graduates can be rare, but if you do secure a role, you are likely to have your training paid for and progress quickly to an attractive salary. Currently, graduates are competing with much more experienced candidates, so it can be difficult for them to get their foot in the door.”
Montgomerie, HSBC, agrees that competition is stiff for entry level roles in the EMEA private banking division:
“The EMEA private banking division of HSBC has approximately 350 RMs, with an increase of 15% year on year and around 1,300 private banking staff in the region in total. Competition is stiff for graduate private banking roles at HSBC – with 200 applicants per place, and nearly 50 applications per internship place.”
Understandably competition is also fierce for private banking roles at UBS. The bank received over 45,000 applications globally and hired just over 1,200. Approximately half of the hires (611) were in Europe.
In terms of retention of younger private banking professionals, there is certainly a desire for stronger technology provisions. According to Capgemini’s 2016 World Wealth Report, wealth managers are citing digital tools as valuable in supporting a number of functions – including greater collaboration with clients, the ability to better
leverage client data in order to pinpoint growth opportunities, as well as time savings through reduced paperwork.
Younger wealth mangers (those under 40) are 12% more likely to want to adopt digital because of their peers than those over 60. Younger wealth managers are also 7% more likely to use digital for assessing and managing
risk for clients. To foster long lasting relationships with their staff, private banks will have to concentrate on technology to retain younger employees.
RM training and development
Training in client facing roles is clearly paramount for RMs representing European private banks, especially as regulators have imposed more stringent requirements for people in advisory roles.
Sarah Deaves, Lloyds PB, tells PBI: “We provide a full induction programme when we have people moving into client-facing private banking and advice manager roles. As a minimum, our colleagues need to have a Level 4 Diploma in Regulated Financial Planning, which gives them a licence to be able to give advice to clients.
“We will both support them to achieve this qualification and also offer full funding to those who want to study to Level 6 which is Chartered status. Ongoing training is then provided to meet changes in the regulatory environment, with a good example being Advice 2015 which saw the changes in the Pension regime.”
Some teams require accreditations for more specialist client needs, adds Deaves. “For instance, we have a team dedicated to working with clients who are aged over 80, who can often have more specific needs when it comes
to financial planning, particularly paying for the costs of long term care. Our advisers within this team are able to provide advice on this and hold the relevant qualification, CF8 Long Term Care Insurance.”
Laura Huntly, UBS, tells PBI that there has been a shift over the last few years in how client facing private banking staff are developed:
“In terms of development over the last few years, technical education has been increasingly complemented with building relationships through empathy, coaching and enabling, and engaging your people and your clients in a
dialogue. With increased complexity of client needs, technical skills and knowledge leadership will always be key to be leading in the industry, and relationship skills are equally expected.”
UBS has developed a wealth management Masters programme in collaboration with Rochester Bern University. The bank also has a wealth management diploma programme, which is compulsory for all of its RMs.
