The competition for talent in India's asset management industry is becoming unprecedentedly fierce. Some corporations are doubling their base salaries or offering stock options, while independent asset management firms are more aggressively recruiting talent than commercial banks.
According to Bloomberg on the 13th (local time), instances have recently emerged in India where private bankers (PB) have received salary increases of up to 40%. In particular, independent asset management firms are offering up to 50% of the revenue they attract as incentives, along with stock options and a signing bonus known as a "golden hello."
Ionic Wealth, a prominent independent asset management firm, has hired 70 private bankers since March of last year and plans to recruit an additional 35 by the end of this year. CEO Shrikant Subramanian noted, "We were able to secure talent in advance before the recruitment competition heated up like now," and predicted that the high compensation trend would continue for at least two more years.
Those with around 8-10 years of experience managing customer assets of over $50 million can demand annual salaries in India of more than $90,000 (approximately 124 million won), with some guaranteed over $150,000. This is about 60% higher than two years ago, and considering various incentives and stocks, the actual compensation has nearly doubled in just one year.
Pratik Gupta, vice president of Aon India, a consulting corporation, explained, "Incentive structures reflecting performance-based compensation, customer retention rates, the qualitative composition of portfolios, and advisory accuracy are spreading."
This recruitment competition is closely related to the rapid increase of the affluent class in India. Recent real estate and stock market booms, along with a series of initial public offerings (IPOs), have led to a surge in ultra-high-net-worth individuals holding assets of over $10 million (approximately 1.38 billion won), resulting in a skyrocketing demand for tailored asset management for them. According to the real estate consulting corporation Knight Frank, India currently ranks fourth in the world in terms of the number of ultra-high-net-worth individuals, following the United States, China, and Japan.
With market growth, the traditional asset management structure centered on large banks is rapidly diversifying. UBS sold its asset management business in India to a local independent asset management firm last April, and newly emerging independent firms like Neo Wealth, which is funded by Japan's MUFG bank, and Dezerv, supported by the Premji family's family office, are also expanding.
These changes are also closely related to the weakening of asset management functions at commercial banks. Wealthy individuals are quickly moving away from bank PBs, which lack advisory expertise, to independent asset management firms that provide more specialized services, and independent firms are actively absorbing PBs from local commercial banks at lower labor costs. According to Bloomberg Intelligence, while director-level compensation has increased by an average of 14% in the past year, junior-level salaries have decreased by 2%.
However, some express concerns that the overheated recruitment competition and excessive compensation could negatively affect the sustainability of the industry as a whole. Rajesh Saluja, CEO of ASK Private Wealth, said, "Interpreting the past three years of strong markets too optimistically and insisting on continuing high compensation could realistically be risky," adding, "Ultimately, asset management must rely on trust and long-term performance."
Industry insiders also emphasized, "Currently, the market is more scarce in talent than in assets, so this compensation competition is unfolding, but soon the imbalance of performance against excessive investment will become apparent," stating, "Ultimately, strengthening structural competitiveness to enhance customer satisfaction and retention rates is essential."