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Are Morgan Stanley’s Asian bonuses better than the rest?

Morgan Stanley may be ramping up its private banking ranks in Asia, but you’ll need to change the way you work if you want to land a job there.

The firm plans to take on 50 relationship managers in Hong Kong and Singapore over the next three years, Vincent Chui, Morgan Stanley’s head of wealth management in Asia, told Bloomberg. If joining Morgan Stanley sounds more tempting than joining UBS (which hired 100 RMs in 2018) or a boutique (Pictet, among others, is expanding in Asia), be aware that it runs its private bank rather differently to many of its rivals in Asia.

For starters, you’ll need to know your products inside out. “The RMs Morgan Stanley hires are very different from those at typical private banks. They must be very independent and able to function as investment advisors to their clients, without the luxury of always having specialist advisors assisting them,” says Liu San Li, a former private banker, now a business partner at wealth management firm Avallis in Singapore. “It’s up to them to leverage MS’s highly-rated research and investment platforms.”

Private bankers need an “entrepreneurial mindset” to succeed at Morgan Stanley, says Liu. “RMs there run their books like entrepreneurs – they bear the costs, including losses due to their errors.”

What are private banking bonuses like at Morgan Stanley?

If you’re used to the discretionary bonus model, which is used by most private banks in Asia, you’ll be compensated differently at Morgan Stanley. “MS is one of the few banks in Singapore operating a brokerage model to determine compensation for RMs,” says a source close to the bank. “This means there’s a clearly defined – rather than discretionary – formula to calculate RMs’ income, derived from the revenue they’ve generated,” he adds.

Morgan Stanley’s bonus arrangement is one of the “main selling points” that attract RMs to join the bank, says the source. “The ratio of compensation to revenue generated is typically two to three times higher than under a discretionary bonus model,” he adds. “AUM expectations are set out to new bankers, but if their revenue is good, they won’t face the same AUM pressure as they would at some other banks. It’s revenue that ultimately matters because their payout is based on the brokerage model.”

In their first two years of employment, private bankers at Morgan Stanley in Asia are typically required to generate revenue of between about US$1m to US$1.5m, says the source.

If you want one of the new private banking jobs at Morgan Stanley in Asia, you may also need to specialise in serving the wealthy Chinese entrepreneurs who are increasingly setting up family offices, particularly in Singapore. That client segment is key to the bank’s Asian expansion, according to Chui. “Morgan Stanley will definitely be looking for RMs with a good network of Singapore-domiciled Chinese clients, or Chinese clients with the potential to set up family offices here,” says Lucas Yeo, head of banking and finance at recruiters Tangspac in Singapore.

Morgan Stanley may want to hire bankers from Julius Baer. The Swiss firm has been expanding its external asset manager team – whose clients include family offices –  in Singapore over the past few months.

Morgan Stanley did not reply to a request to comment on its Asian private bank.

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Image credit: Nikada, Getty

AUTHORSimon Mortlock Content Manager

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