Party on!

Last year, too, the general conditions were good and remuneration was quite high: Kirsten Kücherer spoke to headhunters and HR experts about salary and job prospects in institutional asset management and the trend towards individualized remuneration, among other things.

Payment for sales versus payment for portfolio management

Recruitment within the asset management industry continued to expand in 2018,” says Manuel Rehwald, Managing Director at REHWALD ASSOCIATES Executive Search based in Königstein im Taunus. These were mostly targeted replacements or the occasional expansion of sales staff, and despite the threat of Brexit of whatever form, there was little fluctuation from London to Germany. “There is a high demand for mid-level salaries,” says Rehwald. He describes the framework conditions for salaries in key words as follows: “The annual salary is settled in twelve or 13 equal installments, the bonus or performance-related remuneration is almost always discretionary, and leasing rates are set for company cars depending on an employee’s level: They are between 600 and 1,000 euros per month for the Intermediate level and up to 1,400 euros per month for the Senior level, regardless of which there is often also a rail card.”

Rehwald’s impression is that remuneration varies greatly from company to company, with salaries becoming increasingly individualized: “This means that a lot depends on the overall economic situation of a company; there is always a difference between the so-called boutiques, the smaller companies that exclusively offer asset management services, for example, and the bank-owned asset managers.” The addresses that work very profitably can pay correspondingly good salaries and thus motivate their employees. In the same way, there are asset management companies that belong to a bank. “And if this bank is not doing so well overall, then this also means that there may be cuts in salaries in asset management; this in turn may not necessarily contribute to the satisfaction of the workforce and can develop into a talent problem.” Pay in portfolio management is also very individual; there are also portfolio managers who earn much more than sales people. According to Rehwald, the industry has changed and will continue to do so. “Because you have companies that pay better and companies that pay less. But those who pay less may offer a little more work-life balance than those who pay higher salaries.”

Trend towards individualization

Rehwald is certain that the trend towards individualization will continue, and that the development of bonuses will also be affected. “And that’s why I believe that salaries will no longer necessarily all exceed the status quo. The greatest potential in the last year and a half has come from employees with what is known as an intermediate profile, i.e. around two to five years in sales.” In this area, he has noticed that salaries have risen at an above-average rate, simply because there were not too many suitable people available. “After all, very little training was provided during the financial crisis and the asset management and financial sector as a whole is no longer quite as attractive for young, well-trained people as it once was.”

Wanted …

As far as employees in the back office area are concerned, the future prospects are not too rosy, as asset managers are already outsourcing a lot. The experts do not agree on how the job situation in legal and compliance will develop. In Rehwald’s opinion, employees in this area can basically continue to choose their jobs and would also have a good negotiating position, simply due to the regulatory pressure and many new, additional regulatory restrictions. “Demand is very high in the area of sales,” says the headhunter. “And this is also very much about customer acquisition and the development of new customer segments.” There are isolated opportunities in the area of portfolio management, but this in turn depends very much on the individual companies. Are certain product areas or asset classes particularly important in portfolio management? “That always depends on the clientele,” says Rehwald. “But what is generally in high demand is the area of alternative investments, including real estate, private equity and private debt; the US high yield and global high yield segments are also in demand. The reason for this is that in the ongoing low interest rate environment, it is no longer possible to generate as much or any yield at all with government bonds.”

Read the complete article (with illustrations):

Article from dpn magazine 103 – with kind permission

Manuel Rehwald
Managing Director, Rehwald Associates GmbH