Independent asset managers are very active in Switzerland and are looking for personnel – but private bankers often don't find their way into the profession. Two ex-managers of Credit Suisse want to change that.
«We are the Parship for private bankers and independent asset managers»: With this statement, Reto Hossli is sure to attract the attention of his audience. Yet he operates in a highly discrete business. Together with his business partner Daniel Renner, the ex-banker has been running the startup DR-RH in Zurich since last fall. Its purpose is to connect private bankers with asset managers and to bring asset managers together.
A Network in Banking
This is also possible in times of Corona, as Hossli explains in an interview with finews.com. During its short existence, the company has already been able to «match» various private bankers.
To this end, Hossli and Renner rely on a network of relationships that has grown over three decades: the two company founders were successively responsible for business with independent asset managers in Switzerland at Credit Suisse (CS); Hossli left the bank a year and a half ago.
Change Is Gathering Pace
For the ex-banker, it is clear that both private banking and financial SMEs are undergoing a profound transformation in asset management, which has accelerated with the new financial regulations implemented in Switzerland. According to an industry study, some 2,500 individual firms were active in Switzerland in 2017, with total assets of 400 billion francs ($419 billion). While some are growing rapidly, others are falling victim to consolidation. Interviews with dozens of large and mid-sized independent asset managers confirmed Hossli's view.
Amid the industry's upheavals, however, there are also constants, as the former CS man notes: «Good private bankers are in demand everywhere.» According to Hossli, this also applies to independent asset managers. The only problem is that bankers and financial SMEs can't find each other, and the permeability between the sectors is low. Unless you know someone.
Discrete Conversations
«90 percent of the switches from private banks to independent asset managers are based on existing relationships,» Hossli reports. Conversely, this means that bankers who don't have ex-colleagues at the independents will find it all the more difficult to find their way into this profession. After all, the financial boutiques don't make it easy for job seekers anyway. Their sheer numbers and practiced discretion make for opacity. «Private bankers usually switch from bank to bank,» says Hossli.
Renner and Hossli aim to change that. Their company conducts structured interviews with both «sides», which are subject to confidentiality. Based on the statements, profiles are created. DR-RH then uses these profiles as a basis for matching. It's a bit like Parship.
Hossli does not see the leap from private banking to independent asset manager as a step down. On the contrary. «The regulatory corset and sales pressure in banking continue to increase.» This is leading to a new openness among bankers to jobs outside the bank.
Entitled to Half of Earnings
A change is interesting not least for over-50 client advisers, as financial institutions have increasingly sought to get rid of the more expensive and rebellious older cohorts in recent years. Here, independent asset managers offer both the opportunity to gradually cut back and to remain active beyond retirement age.
Hossli also emphasizes that the pay at independent asset managers is quite attractive. It is true that fixed salaries are lower than in banking. On the other hand, private bankers working for asset managers can claim an average of 50 percent of the gross income on the portfolio return. With a book of 100 million francs and 1 percent performance, that's 500,000 francs.
Rule of Thumb
Provided you bring such a book: The prospect of new client money is the main reason to hire a private banker in banking as well as independent asset managers. As a rule of thumb, Hossli says, the longer and more closely an adviser serves his clientele, the greater the chances of taking their funds with him when he switches.
There is apparently no shortage of people willing to switch. The two company founders are currently accompanying various plans of asset managers who want to expand even further in Switzerland. The focus is on German-speaking Switzerland, and DR-RH will soon be joined by a person with whom the young company hopes to expand its network into the private banks.
