Private bankers face talent competition

GENEVA (Reuters) - Competition to hire the best wealth managers is driving up wages and forcing private bankers to recruit from outside conventional circles, with one bank looking to hotel managers to help bolster its ranks.

Boris Collardi, chief operating officer of Julius Baer's (BAER.VX) private banking division, said the Swiss bank had targeted students at Lausanne's prestigious hotel management training academy, due to their smart appearance and customer service skills.

"We have people who are 23 and speak four languages," Collardi told the Reuters Wealth Management Summit in Geneva.

"Everyone has to wear a suit, men and ladies. They already have a different maturity."

Collardi also said Julius Baer had recently hired a top executive from luxury goods group Richemont (CFR.VX).

"Eventually, I'm sure they will become bankers. These are highly talented people."

Analysts estimate the wealth management and private banking industries are the fastest-growing part of the world's financial services sector.

Delegates at the summit said this particular area of financial services generally had fewer appropriately qualified people, thereby putting a premium on their salaries which could run into several millions of dollars a year.

Collardi said Julius Baer had increased its private bankers from around 400 last year to more than 500 now.

"The fact is that private bankers are making more and more (money) every year over the last five years," he said.

DO THE YOUNG MAKE GOOD PRIVATE BANKERS?

Bank of Ireland (BKIR.L) private banking managing director Mark Cunningham said the Irish financial group had started a program with Dublin's prestigious Trinity College.

"There's some pressure on talent and there's some pressure on remuneration. The people just aren't there," said Cunningham.

But in contrast to Julius Baer targeting 20-something Lausanne students, Cunningham said Bank of Ireland's program at Trinity College targeted older people already in a career.

Cunningham said Bank of Ireland looked to put between 10 and 12 trainees a year on its program at Trinity College.

"You don't want somebody at 24 or 25 years old telling you what to do with their money," he said.

"You're looking for an educated salesperson. It was always felt that boys at back of class were sent off to be salesmen and boys at the front went off to be bankers, accountants, lawyers etc."

Peter Flavel, global head of private banking at Standard Chartered Plc (STAN.L), said the booming economies in Asia were creating lucrative job opportunities in the private banking and wealth management sectors.

"Because it's so competitive there's actually good remuneration for people to switch between banks and we're seeing a reasonable amount of that across Asia."

Flavel said that along with trying to hire talent from outside, Standard Chartered also often sought to redeploy existing staff working in other areas of the bank, such as traders looking for a less frantic but still well-paid career.

"We get ex-traders, who are getting into their 30s or 40s, their life is changing, they've got kids."

Jan Erik Frogg, head of alternative investments at Swiss bank Union Bancaire Privee, said the pool of talent in the private banking and wealth management industry was becoming increasingly diverse.

Frogg, who often invests clients' money in hedge funds, said more and more hedge fund managers were coming from places such as India, compared with the dominant hedge fund centers of New York and London.

Flavel said those in the wealth management industry might have to resign themselves to the fact that the cost of getting the best private bankers and fund managers would inevitably cause margins to fall.

"In my experience, there's only one way in which margins go, and that's down," he said.