Comment: Sarasin hires smart to lead Swiss in banker productivity
Two senior hires in the last week by Swiss bank Sarasin are further evidence that the Basel-based wealth manager is one of the savviest recruiters around.
Joachim Straehle, its chief executive, has been steadily plundering the senior ranks of his former employer, Credit Suisse, to good effect. Reto Marx arrived this week to head south-east Asia joining the likes of Werner Rueeg in Switzerland, Enid Yip – his boss in Asia – and bank chairman Christoph Ammann, to name three recent former Credit Suisse recruits.
Last week the bank announced it had hired Rivera Vasquez from Julius Baer to cater for wealthy Mexican clients.
With the fall-out from the credit crisis continuing to ripple through the wealth management market, the time is ripe for hiring as any private bank executive will tell you.
The secret is making the right appointments and, importantly, getting relationship managers to bring clients on board.
The conventional wisdom is that a new recruit will bring about a quarter of their assets with them over time and take a few years to re-build a book of business.
But the feeling from many private bank managers is that in the current febrile market time-frames are being condensed and a bigger portion of assets can follow good bankers. One US-owned wealth manager recently recruited a banker who brought three-quarters of his old clients with him.
Evidence from a recent Morgan Stanley report suggests Sarasin has the best record of the Swiss private banks in hiring productive staff.
Morgan Stanley referred to its hiring strategy as “cherry picking private bankers from other firms” with the result net new money added by recruits has been running at much higher levels than the industry averages.
In Asia, Sarasin’s net new money for each recruit was Sfr45m last year, while it was Swf36m in Europe.
Of the Swiss, EFG was the next best performer with Swf28m per head while Credit Suisse was least impressive with Swf13m per banker in Asia and Swf17m in Europe.
Sarasin’s European operation also came top of Morgan Stanley’s ranking of revenues per banker, with each individual bringing in Swf3.3m for the bank. However, its Asian bankers were the least productive group in terms of revenues, at just Swf1.1m.
In a recent interview with AWP, Straehle said he was confident of hitting his target of 10% net new money growth this year, thanks largely to success in the Middle East and Asia.
He added that the bank is three-quarters of the way towards its goal of hiring 100 new bankers this year. It would mean Sarasin has increased its advisers by a third in 12 months.
While the bank concedes it offers attractive remuneration packages, it maintains these are based on performance-based pay rather than guaranteed bonuses. It cites its focus on private banking and backing from triple-A rated Rabobank as attractions for bankers.
The hiring spree has not come without cost, and Sarasin’s cost-income ratio has crept well north of 60%.
Straehle has committed to getting it back to 60% by 2010 and also aims to deliver a gross margin for the whole business, including institutional assets, of 90bp by the same date.
Given his record so far, few would bet against him doing it.
Joachim Straehle
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