At Goldman Sachs, assets handled by each relationship manager in the region rose on average by 29 percent to $988.6 million last year, even as the number of such employees declined 3.3 percent, to 88, according to the Asian Private Banker.
A Goldman Sachs representative declined to comment on the figures, though the bank said it seeks to maintain a good balance between clients and wealth managers. “Our client base is made up almost exclusively of ultra-high net worth individuals who demand highly personalized and customized solutions, and each of our private wealth advisors covers only a small number of clients,” said Ronald Lee, a Goldman Sachs partner who leads the bank’s Asia-Pacific private wealth management.
Bank of Singapore, which bought Barclays Plc’s wealth units in Singapore and Hong Kong in 2016, plans to raise its productivity by doubling the assets per relationship manager to $500 million, according to Chief Executive Officer Bahren Shaari, adding that the improvement will come through the use of technology such as artificial intelligence and robotics. The private bank of Oversea-Chinese Banking Corp. is also raising the minimum client threshold to $5 million from $2 million, Bahren said last year.
Focusing on a small number of extremely wealthy clients does have a downside, said Scorpio Partnership’s Kang. If a private banker leaves, and clients follow those managers to their new place of employment, that could significantly impact assets under management, he said.
Still, some private banks are figuring out strategies to reduce that risk, for instance by organizing managers into teams to serve a small number of clients. And for the most part, the added boost to productivity is well worth it for wealth managers, he said.
“Banks are already paying through the nose,” for talent and other costs such as compliance, said Kang. “Now they have to cut and become more efficient.”
This article was provided by Bloomberg News.