The Funds Partnership Asia’s Salary Guide 2019 : Asset Management
Globally, the asset management market had a challenging time and experienced a marginal decline in 2018. This was due to the shift of investor interests towards alternative investments and the increased costs and fee compression. Although there were hires made, most of this hiring was due to firm restructuring or attrition.
Yet, the Asian asset management market is still progressing – shifts from deposits to investment solutions, resilient capital markets and a conducive regulatory regime has pushed and driven the growth in this region (McKinsey, 2018). PwC’s research also anticipates APAC to be the centre for global Assets under Management (AuM) growth in subsequent years; with fastest growth in developing markets but irregular growth in more developed markets of APAC.
We have identified the top picks of 2018 and where 2019’s hiring will be at in this article and have spoken to 1,053 contacts across Asia.
We have covered the following topics in this article:
Roles and Seniority
Sales & Marketing
Sales and Business Development
Marketing and Communications
Risk & Compliance
ROLES & SENIORITY
As each firm’s internal structures differ, we have defined the typical organisational hierarchy for the purpose of this salary guide:
- Analyst/ Associate (0 – 3 years)
- Senior Associate/ Assistant Manager (AM)/ Associate Vice President (AVP) (3 – 5 years)
- Manager/ Vice President (VP) (5 – 7 years)
- Senior Vice President (SVP)/ Associate Director (7 – 10 years)
- Director/ Team Head (10 – 15 years)
- Managing Director (MD)/ Group Head/ Chief Information Officer (Above 15 years)
*In thousands USD per annum
APAC’s existing asset management hubs in the region are Singapore and Hong Kong, and will very soon will be joined by a third – Shanghai (PwC, 2019). Though performance did come slightly under for the Chinese market with trade tensions between US-China, the macro outlook for the country looks better (UBS, 2017)
Singapore’s growth is contributed broadly by traditional and alternative assets that command higher valuations which increases the inflows to Asian markets. Serving as the Global-Asia gateway for asset managers and investors, we do foresee an overall rise in hiring for senior professionals in comparison to junior and mid-level hiring. This is driven by the complexity of building a genuinely diversified portfolio to produce growth and income-efficient deliverable on top of an attractive risk-adjusted basis.
Becoming a portfolio manager remains one of the most coveted careers in the financial industry and is the pinnacle point for a majority of researchers and analysts looking to forge a career in fund management. With fixed income focused fund managers experiencing outflows, equity fund managers have once again risen to the fore.
Comparing the two groups, there is very little discernible difference in compensation levels between equity and fixed income portfolio managers. The only level at which a small gap emerges is at the Director level and above, and our research team indicates this may be as a result of the sample size.
The big takeaway from the data is this: if you’re a candidate wanting to make a lot of money in a research role, be prepared for a long ten plus years in the position! It is only at Director-level and above that one will begin to see difference in compensation – particularly in comparison to the portfolio management counterparts.
Our research indicates that the reason for the higher compensation levels at the more senior level is due to the relatively limited ‘experienced candidate’ pool, with most professionals moving in to an investment analyst or portfolio management role at the first opportunity. Those professionals that do remain and progress to a senior level can certainly make good money, but ultimately become an investment analyst or portfolio manager puts candidates on a faster track to earn.
Our research has indicated that hiring for investment analysts has slowed in recent months, with majority of asset managers only adding additional headcount due to staff turnover. As with most other front office roles, investment analysts have seen their salaries remain steady over the last few years with no notable jumps. There also remains a fairly deep candidate pool which ensures that candidates rarely receive more than market rate when moving jobs.
SALES & MARKETING
The advancement of technology has definitely enabled asset managers to continuously develop and deliver more sophisticated and investor-centric solutions to institutions today. Yet, the toughest challenge for many asset managers is to attract and engage with institutional investors. Generally, the industry has a healthy demand for both institutional and retail sales talent as buy-side, client-servicing professionals are increasingly sought-after.
Sales & Business Development (Institutional & Retail Sales)
*In thousands USD per annum
The ranges in salary for business development professionals saw considerably large rates of fluctuation, compared to most other business functions. Typically the base salary for positions below Director level are at similar ranges, regardless of the size of the firm or the type of clients that business development professionals serve.
At Director level, the compensation disparity is marginally prominent; the primary reason for the large range in this instance is the result of the differences in compensation between larger, global fund managers and smaller, regional managers. Our research indicates that a Director-level candidate at a top-tier fund, for instance, is likely to be taking home over $40,000-$50,000 per annum more than their counterpart in a similar position at a local fund house.
Marketing & Communications
*In thousands USD per annum
2018 has seen something of a renaissance for marketing professionals. Historically, these professionals have been consigned to carrying out generalist marketing responsibilities but in recent months firms have placed even greater importance on their marketing personnel. This has led to the creation of a subset of marketing professionals: marketing specialists. They handle more fund-specific marketing related responsibilities or create targeted advertising campaigns and are therefore expected to carry more expert knowledge than their generalist counterparts.
A large number of global asset managers now have large marketing functions that are roughly divided into two distinct groups – generalist and specialist – and are now placing ever greater emphasis on marketing their firm in Asia. Overall, we see professionals in the segment of digital marketing are highest in demand.
Similar to sales and business development, salaries for marketing professionals have remained steady in Asia over the past few years, but is starting to change. For this survey, we decided to separate the data for generalist and specialist marketing personnel.
Our research indicates a couple of interesting points:
Firstly, at the junior to mid-to-senior levels, marketing professionals are generally paid less than their sales and business development counterparts. While this is expected, considering that marketing staff are not considered revenue-generators (at least for generalist marketers), the difference is certainly noticeable.
Secondly, specialist marketing professionals are clearly valued more than their generalist counterparts at all levels besides at a senior-level, where compensation levels for both are generally more even. Our research suggests that this is likely due to the large increase in responsibilities for generalist Heads of Marketing, who in some cases will have to oversee both generalist and specialist marketing functions. The Director-level specialist marketing professionals we spoke to, for the most part, did not manage teams and were only responsible for their own specific business function. Going back to our initial point, the data certainly indicates how much importance asset managers now place on specialist marketing professionals in their overall set ups and clearly candidates with backgrounds in investment marketing, advertising et al are very much considered key components in the overall business development process now
- CANDIDATES: if you want to have a career in asset management within sales and marketing and want to make a lot of money: go for a role in business development. Alternatively if you want a career in marketing: specialize.
- CLIENTS: Generalist marketer salaries have held steady for a number of years so do not expect to pay more than market rate to bring someone on. But if you are ’re looking for a specialist marketing professional, be prepared to pay a lot more for access to a limited candidate pool.
*In thousands USD per annum
Every year, the demand for more technically-capable professionals is somewhat high, across all firm types. The most interesting point this data reveals is that at the junior level, client services personnel are paid generally in line with their business development counterparts.
Our research suggests that this is likely due to the fact that at the associate level, client services and business development professionals are usually handling the same responsibilities and that there is still a significant number of fund managers that do not have separate client services and business development professionals at the junior level. Clearly this changes as the candidate progresses through their career and as we can see, by the mid to senior level, client services staff can expect to have fallen behind their sales counterparts in compensation. At the senior level, Heads of Client Services & Relationship Management can expect to be well-compensated in comparison with their business development colleagues, while there is a much smaller difference in salaries between the two at Director-level and above. Ultimately, our research indicates that candidates choosing a career in client services over sales is a matter of personal preference, with a large majority (over 85%) citing that they were not interested in a business development focused role and all the necessary pressures that come with it.
*In thousands USD per annum
The key trend over the past twelve to twenty four months has been the explosion in hiring for product management professionals. Product specialists, managers and developers have been in high demand since the start of 2013 with most international fund managers in the region now boasting large teams. The candidate pool in this space still remains extremely limited, with firms often having to look internationally to bring in experienced candidates and there is a clear shortage gap opening up between junior and senior level product professionals. Whilst there has been much debate over the specific responsibilities of a product management professional, for our research we decided to separate these personnel in to three distinct groups:
- product specialists (defined as client facing portfolio managers/sales people)
- product managers (more marketing focused), and
- product developers (responsible for the development and launching of new products)
[Note: First we should point out that with a limited candidate pool comes a limited set of data. At the Managing Director/Group Head level, for example, it was not possible for us to take a large sample size and therefore we have opted not to include the data for this group.]
One notable difference is that of the compensation levels between product managers and specialists and product developers. Even at the junior levels, product developers can expect to earn more than their other product focused colleagues and this gap only increases up to the mid to senior levels. At the senior levels (Director and above) the gap closes and there is very little difference between product specialist and developers – although compensation levels for product managers remain comparatively low. Our research team suggests the reason for this is the severely limited candidate pool for product development professionals. Whilst product specialists and managers are now somewhat easier to come by, there remains very few product developers in Asia and even less so at the mid to senior levels. This would explain why the sample sizes at these levels were so small. Most firms are now either hiring junior staff and training them as product developers or poaching senior level product development professionals from other firms (or in many cases, from abroad) and this is creating a major shortage gap.
Secondly, we noticed the e large difference in compensation levels between product management professionals and their business development colleagues. We believe it is indicative of how much the space has grown and the limited candidate pool. Whilst product managers are not generally considered revenue-generators, they are clearly valued more, even at the junior levels. If you are a candidate looking for a career in asset management and want to stay in the front office, you should seriously consider a role in product management.
However, one important point to note is that whilst the base salaries for product managers are generally significantly higher than for sales professionals, product management personnel do not, according to our research, take home a lot of additional compensation in the form of bonuses. Large bonuses in sales and marketing appear to be the preserve of business development professionals and we expect this to continue despite the fact that product specialists are now often referred to as glorified sales people.
RISK & COMPLIANCE
If there has been one area in asset management that has seen a hiring boom in recent years, it would definitely be the middle office. With ever-changing global regulation and the financial industry looking to ensure there is no repeat of the 2008 global financial crisis, fund managers have been aggressively looking to add risk professionals to their teams in the region. However, this is one area in which demand has constantly outstripped supply and it is now not unheard of for risk management professionals to ask for salary increases of over 40-50%. With firms struggling to find talent and in desperate need to hire, they have succumbed, with salaries in the space increasing significantly over the last two to three years. In conducting our research, we decided to examine the compensation levels of the all-rounded risk management professional, one that is expected to handle operational, credit, market, investment and counter party risk. We have then split the data into two groups: global fund managers and local fund managers.
*In thousands USD per annum
It is not surprising to see global fund houses paying their risk management personnel significantly more than their local counterparts, which is the case across most sectors. What is worth noting however, is just how big a gap there is between the two, which we foresee will increase in the future
Interestingly, at Director level and above the salaries for both global and local fund house professionals start to even out somewhat. The likelihood is that working for a global fund house as a senior risk management professional will come with added pressure that may not be the case at a local fund house.
Secondly, whilst salaries start off relatively low, they quickly increase as we move up through Manager/Vice President and up to Director. At Director level and above, risk management professionals can expect to earn almost as much as their portfolio management counterparts (at least on the base component) and quite a bit more than their distribution colleagues. It is therefore no surprise that candidates are increasingly looking at a career in risk management. Perhaps the most interesting data is the significant rise in compensation levels from Manager/Vice President to Director and Managing Director. Our research team suggests a couple of reasons for this:
- Senior level risk management professionals are extremely hard to come by, with one of the most limited candidate pools in the industry which means fund managers are having to pay well over market rate to bring them on board.
- Due to the demand for these professionals, they are often able to negotiate higher salaries with their current firm or play off two firms against one another to see who can offer the highest package, which then in turn drives up the average compensation for these personnel.
Finally, with Asia experiencing a shortage not seen anywhere else in the world, many firms are looking to bring in risk managers from overseas and offering them bumper packages as a result.
- CANDIDATES: if you want to make a lot of money in risk management, spend a large portion of your career moving from global fund house to global fund house, until you reach Director level, then if you don’t mind taking a small hit in salary for the sake of a lighter workload, join a local firm.
Ultimately, risk management professionals are notoriously overworked and work in a highly pressurized role. It is therefore perhaps not entirely surprising that they demand significant upsides to change jobs. However, our research points out that most of the candidates we speak to know how in-demand they are and therefore are willing to n ask for 40-50% increases and, in some cases, get them. Whilst this practice continues, the risk management professional is only going to see their salary skyrocket.
2018 has been the year of the compliance professional. A cursory browse of eFinancialCareers suggests there are more roles looking for compliance personnel than for any other area in asset management. Almost every global fund house has added compliance professionals to their teams this year and almost every firm has complained of the difficulties of securing a candidate.
As with risk management, the demand for compliance staff far exceeds supply, and with a large number of professionals only recently changing jobs, it is now harder than ever for firms to add in this space. There has been talk of numerous firms struggling to secure multiple candidates by losing out to counter-offers and the compliance space is certainly one area where firms are lax to losing their personnel without a fight. In collecting our data we primarily focused on compliance professionals at the global fund management houses.
The key point our data indicates is just how highly paid compliance professionals are from around the Manager/Vice President level and above. Similar to the points we made about risk management professionals, the reasons for the significant increase in salaries at this level are entirely down to the small candidate pool with firms increasingly having to look overseas or make offers well above market rate to secure their preferred candidate. As we discussed above, this, taken in tandem with the number of counter offers we are seeing in this space, has led to compliance professionals being extremely well-compensated in comparison with their counterparts in fund management and distribution.
Read the pdf version of the Funds Partnership Asia’s Salary Guide for Asset Management here: