Financial services firms continue to battle against one another for wealth management talent even though companies are forced to pay hefty salaries that crimp profits.
Jane Swan, the senior client partner in asset and wealth management at the executive recruitment firm
Companies consider it easier and faster to expand their business by hiring experienced financial advisers and getting them to bring their clients with them when they join a firm, she said.
Employers should come up with other ways to drive revenue, Swan said, however.
"It's an aggressive war for talent that nobody seems to be winning," she said. "They're paying through the nose to bring over these advisers."
Mindy Diamond, the president of the search firm
They had been with their firm for many years and had no intention of changing jobs but felt abandoned by their managers, who worked in an office in another part of the country.
Diamond said that she persuaded the investment team to consider a move that would "monetize" their business and soon enough, they got an offer that included close to $7 million that the four could split amongst themselves, along with a wish list of other things they had never had the bargaining power to acquire, including an assistant.
"They had every major firm in town fighting over them, throwing enormous amounts of money," Diamond said.
She said that she expects the team to switch jobs in the coming months.
Many things may motivate a potential recruit to prefer one wealth management firm over another. "If you can't compete on 'this is a better place for your clients to be served,' no amount of money will make them want to come," said John Straus, the head of private wealth management and chairman of the private bank at
Another reason for talent bidding to get out of hand, besides supply-demand dynamics, is that many financial institutions have given employees forms of compensation such as stock options that make it harder to leave for a rival without losing money.
As a result, employers are paying more to buy such people out of those commitments and persuade them to switch jobs.
"The large financial institutions with the deep pockets are the ones that have the reputation for being the most willing to pay up," said M.J. Rankin, the president and chief executive of
Though many businesses have proven their determination to win the battle for talent, some point out that it remains to be seen how this will affect their wealth management operations in the long term.
