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Experts

Private banking bonus rounds - who really wins?

As relationship managers (RMs) in Hong Kong and Singapore take stock of how much they earned in bonuses for 2010, almost all I hear is complaints.

Date: Mar 11, 2011          Author: Anthonia Hui

Keywords: Compensation

As relationship managers (RMs) in Hong Kong and Singapore take stock of how much they earned in bonuses for 2010, almost all I hear is complaints.

You might think this is to be expected. But to me it highlights some fundamental problems in the industry - and outlines one of the biggest challenges banks and their senior executives face if they are able to develop the types of sustainable and client-focused platforms they say they are committed to building.

I will discuss these issues in detail over the coming weeks through further articles on this topic.

For instance, those bankers who believe they deserve more need to assess the value they have actually provided to their clients and their organisation.

Just because of the highly-competitive nature of the industry and therefore the willingness of many players to buy market share - RMs who show themselves to be only looking after their own interests cannot expect to develop long-term careers and be respected across the market in an industry with (supposedly) loyalty, trust and positive relationships at its core.

How many times can a banker really jump firms in search of a relatively small pay increase and not expect to raise questions or concerns - both from prospective employers and clients alike?

Equally, senior management must share the blame. Such a short-term approach to filling the talent shortage is inevitably going to end in disappointment and mis-managed expectations - for the boards to which they report on the one hand and the clients to which they serve on the other.

Finding more realistic, fairer and more sustainable compensation structures is clearly critical for long-term success and growth.

Is that just wishful thinking? Can anything be done to actually change the compensation model? Why don't more banks try? 

I am eager to hear your thoughts as I write more on this subject in the coming weeks.

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