The profitability of wealth management is such that large European banks including UBS, Deutsche Bank and Credit Suisse are honing in on private banking.
Wealth managers have increased their global hiring, according to banks and top business schools.
“We have seen steadily increasing demand from private wealth management divisions of large banks looking for MBA hires over the last few years,” said Christelle Cuenin, assistant director of corporate partnership development at INSEAD, a global business school.
UBS plans to hire more people for its wealth management business, and plans to open offices in Rio de Janeiro and Belo Horizonte, according to its Brazil unit, which already has nearly 400 employees. UBS has undergone a transformation from the world’s largest investment bank to a wealth management powerhouse.
Deutsche has bolstered recruitment for its asset and wealth management business over the past year in both the US and Asia Pacific, according to the bank.
BNY Mellon of the US has opened eight new private banking offices in the past four years, and has increased its roster of portfolio managers and private bankers by 6%, it said.
Private wealth management firms are also hiring MBAs, according to Pauline Ma, senior finance career coach with George Washington University School of Business, such as Rathbones and Julius Baer Group.
“Other asset management firms are hiring too but not in the numbers that private wealth management is hiring,” she added, saying that to a lesser extent insurance companies are also pitching themselves as offering wealth management opportunities.
Large listed insurance groups like Standard Life, Prudential and Old Mutual have fund management units – an area of the insurance industry that more senior hires typically enter, according to Martyn Drage, a careers consultant for finance at Henley Business School.
Liberty, a US insurer that has a big presence in Singapore, has been recruiting MBAs for leadership roles in Asia Pacific, said John Gurskey, director of the Career Management Centre at Melbourne Business School.
Insurance companies Zurich and Liberty Mutual have also been active in recruiting MBAs at INSEAD, which has campuses in Europe, Singapore and Abu Dubai.
Washington-based GWUSB has seen demand for wealth managers not just in the US but from Chinese groups that are expanding.
Many banks are pushing their wealth management operations into emerging market countries and the focus is on locations with notable growth, such as Asia, said Tony Somers, director of the Career Management Center at French business school HEC Paris.
Credit Suisse has expanded its wealth management operations in South America, and plans to open new offices in Belo Horizonte and Porto Alegre.
The wealth management units of both UBS and Credit Suisse are now comfortably outperforming their investment banks, according to the companies.
Comparatively, banks Barclays and Royal Bank of Scotland have announced plans to slash headcount significantly at investment banking units this year.
Adila Khan, career advisor for finance at Oxford’s Saïd Business School, said: “At a more senior level for the MBAs, the demand for investment banking is less, with an increase in interviews for private baking and transaction advisory.”
The high salaries associated with wealth and asset management has made the paths more attractive. “Salaries in the wealth management sector are higher,” said Elisa Zagami, head of career development at MIP Politecnico di Milano, than other financial areas.
At Stanford GSB, a business school in California, MBAs working in investment management earn $27,000 more in salary than MBAs at investment banks.
At both London Business School and the Tuck School of Business in the US, investment management has risen to be the second most popular finance career among MBAs.
There is some demand for wealth managers with CFA status, but the strategic skills developed during an MBA can be attractive to wealth management employers, according to Paul Schoonenberg, head of MBA careers at Aston Business School.