why pb dont deliver and what to do about it ebook 2013

Why Private Bankers you hire

don’t deliver and what to do

about it!!!

This eBook has been developed using tremendous amount of experience, surveys, conversations with Private Bankers and Heads of Private Banks and also unfortunately the lessons learnt from other people’s costly mistakes. This e-book will save you Thousands of ££££ in recruitment fees and wasted salaries. This e-book will save you huge amounts of your valuable time and will ensure that you focus your efforts on growing your business with successful Private Bankers. Read on to find out the simple 6 stage process to hire a top Private Banker! Follow this process and we guarantee that you will never hire an unsuccessful Private Banker again!

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Stage 1: Defining the Role and Success The first stage of the process is all about the identification of the internal need, the role of the candidate and the

minimum the candidate needs to do to be classified as successful. This is the stage where you have to realize

what exactly you are looking for. The more definitive you are the better. Some of the key themes of

identification maybe the number of bankers, geographical coverage, type of clients, type of products/

investments, type of the actual business, lending, leverage etc to name a few. The difference between a

successful mandate versus an unsuccessful one is the clarity of these parameters. Once the parameters have

been established, you must define what being successful in this role would entail. You must quantify these.

There must be a direct correlation between business plan (expected of the candidate) and the reward structure.

You must also do some due diligence to see if your proposition is in alliance with the market standards.

An Example of a well defined requirement: A requirement to hire 2 Private Bankers at VP Levels. They must have

South East Asian Clients. The clients they manage must be Res Non –Dom private clients with Residences in the

UK. Each client must have more than $1M in investable assets. The clients must have an appetite for traditional

advisory and discretionary mandates without any leverage. To be successful each Banker must be able to

commit to bringing at least $ 50M in NNA in year 1 with an ROA of 100 Basis Points. The fixed base should ideally

be between £50k -£60k with an overall 20% of revenue payout scheme.

Reasons this stage is important:

This will be framework to your entire recruitment process. Completing this stage, will save you a lot of wasted

time reviewing irrelevant CV’s and wasted time meeting unsuitable candidates.

Example from client:

One of our clients mentioned how they were looking at growing their assets under management by recruiting

private bankers. They had not made a structured definition to the role and the specifics of what would be

successful, just that they were looking at experienced Bankers managing £100m +. They received lots of CV’s

and spent a number of wasted interviews before we partnered them exclusively and gave them advice. They

were finding they were receiving bankers managing £100m, but these bankers were not correct for a number of

reasons. Some were managing a large number of clients, so average size of investment was not suitable. One

candidate had been at their institution for a number of years and had inherited their entire book and the client

was loyal to the bank opposed to the candidate. One candidate was managing a significant book and had the

relevant client base, however they were on a fixed compensation way more than what the clients were willing

to pay. This process even developed to a number of stages before this was highlighted. The client and candidate

had both wasted time. We helped define a framework highlighting all the necessary key points, and the client

managed to interview only relevant candidates and therefore had a much smoother recruitment process.

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Stage 2: Reality Check

This is a further internal process where we recommend clients to analyze and do some due diligence to ascertain

whether the expectations are genuinely achievable. Not all banks can expect their candidates to gather huge

AUMs and revenues in Year 1. Each bank has to realize its own strengths and weaknesses and realize what it can

and cannot offer potential clients. As a Hiring Manager you need to put yourself in the candidate’s shoes and ask

yourself if you could do what is expected of the candidate. To elaborate, it will not be realistic for the Hiring

Manager of a startup boutique bank to have the same expectations from a banker that a Tier 1 bank would

have. The Tier 1 has the advantage of a footprint, brand recognition, platform capabilities, strong balance

sheets, lending, Investment Banking capabilities, cross business and internally referred flow of clients to name a

few. The boutique in this case is going to have to have more realistic and achievable targets and business plan.

It is also critical for the hiring manager to be absolutely transparent with the potential candidate about what

exactly they can or cannot do in terms of servicing their clients. It is very common for top bankers to leave banks

in short periods of time after realizing they cannot service their clients as something that was promised cannot

be done! This is a fatal error and can be prevent by showing transparency from Day 1. It’s all about accurate and

clear communication and managing the candidates expectations in terms of everything from the word go. This

will also ensure that candidate will respect you for who you are as a manager and your honesty and

transparency. Once all of this has been achieved and authorized, you will need to have this in black and white

for the next stage. Congratulations! Now you have a clearly defined mandate!


This stage goes hand in hand with stage one and can have an even greater negative impact in time wasting, as

this may only come to the surface at the final stages of the project, if not clearly defined at the beginning.

Example from Client:

One client had interviewed a number of strong candidates, whom they were positive on, and in some cases even

offered. The client had very high expectations of what the new candidate should be able to deliver. The

candidates progressed through the process as they were interested in hearing the final proposition and had

shown a liking to the manager and the brand. However when it came to the decision of moving, the candidates

often felt the expectation were too high for this particular banking name and they may find it difficult to attract

all the relevant clients/business to bank. They were comfortable in committing to a smaller AUM in the first

year, considering the name, platform, reputation, but were not willing to make the move under the current

conditions. This often wasted a great deal of time in interviews all to result in a candidate declining the offer.

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Stage 3: Screening Process

This is the stage where the hiring manager approaches a specialist Search Firm or the internal recruiters with the

actual brief and job description in black and white. If using external recruiters, it is absolutely critical that the

hiring manager meets with and communicates all of the above in great detail so that everyone is communicating

the same ideas. This also helps the external recruiter get a feel for the culture, the managers and the style of the

organizations. It is always advisable to give out a search mandate ideally to one specialist recruiter as opposed

to working with a few for the same mandate. It is easier to control what one body communicates as opposed to

many. The essence of this is to send out the same message from the recruiter and the hiring manager. This also

gives top bankers good impression about the hiring institution, as it all comes across as well defined. It is all

about getting the same word out in the market. At the end of this stage the recruiter must be able to come back

to you with a short list of a few good CVs. Once you receive a few CVs and you have shortlisted a select few of

them, here are a few things to look out for before you take them to the interview stages.

How often have they changed jobs?

THE FROG: Private Banking is a very relationship driven business. A banker changing jobs every year or

few months is very unlikely to be a star performer as his clients will not be interested in opening

accounts every where he goes.

THE INSTITUTIONALISED: The reverse is also not good. Someone spending their entire career at one

institution may not be good either, though may seem loyal, because they may just be inheriting other

bankers books as and when they leave. They become institutionalized and do not know any other way of

working and culture except of the one they are used to.

THE TOP PERFORMER: We have realized the good candidates generally stay with their employers for a

minimum of 3-5 year period on average. They always move due to genuine valid reasons and money is

always only a byproduct. There is always clear evidence of career progression. Because they are

successful, they are always well compensated but their primary concern is always around the ability to

service their clients. There are always genuine acceptations to the rule.


Knowing the signs of ‘what to be aware of’ can save you the wasted time of an interview. Any questions you

have at this stage should be highlighted with your internal/external recruiter before a meeting.


Once client had spent many wasted interviews, meeting people that he was not convinced had the relationships

suitable to build a business with their bank. He would progress through the stages and have a number of

interviews; only to feel unconvinced that the candidates had the necessary relationships. They had experience

with the relevant size books and clients, but he didn’t feel confident they could deliver. After we reviewed his

process it was clear the candidates had not been screened correctly.

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Stage 4: Interview Process

You must only ever interview candidates if you think there is a 50% chance of you hiring this candidate. Even

before you meet this candidate you must be 50% confident that he could do the job. The entire objective of the

interview is only to confirm if he is a definite fit. You must have all the information on this banker with regard to

his experience, AUM, Revenues for the last few years, Bonuses for last few years (a good indicator for

performers), number of clients, type of clients, booking centres for his clients, break down of portfolio, details of

leverage, details of institutional and other business, details of clients and assets actually inherited versus self

generated etc.

THE FIRST INTERVIEW: This is your opportunity to get a face to face introduction with your candidate. This is

your opportunity to establish a rapport, relationship and above all show what you are about to your future

employee. It should be a fairly informal affair. A lot of Banking managers make the mistake of asking too many

sensitive client and portfolio details in the first round interview, which generally scares away most bankers. It is

an opportunity to build a relationship. You must try and find out the real motivation for the candidate to leave

his current organizations. Just like you want to know all about banker, he wants to know all about what you can

do for his clients and himself. A lot of Private Bankers will not work for managers they do not like. So it is

advisable to keep things more generic and trying to establish if he would generally fit the bill and build that

relationship. We have met lot of senior bankers who are willing to put up with a lot of things because they

actually like and buy in to the manager they met. You can also tell them of what the role involves and what is

expected of the candidate in Year 1. You must talk about the sort of business and clients he covers and establish

what he will need to have in order to be successful in a your organization. It is also a great opportunity for you to

explain your model and platform in detail. You can manage the candidates’ expectations by giving them a

breakdown of how your compensation structure works. It is advisable to do this right from day one so that he

knows exactly what to expect. If the meeting is positive, you must also propose a second meeting and ask him to

come prepared with a business plan and to expect a lot more questioning on his business plan and his client

profiles in the second round.

CLOSE THE CANDIDATE/ FEEDBACKS (Receiving and communicating honest feedbacks)

THE BUSINESS PLAN & SECOND INTERVIEW: On receiving the business plan you must take the time to go

through the business plan. This is your opportunity to realize exactly what he will need in terms of platform and

offering to make sure he is successful. Upon receiving the business plan if you realize that you cannot offer the

products / pricing/ offering then you will know this is not going to happen and you can swiftly end the process. If

it is positive, your second stage can be where you ask in depth questions about the candidate’s plans on

generating business. Some of the key questions can be in the lines of:

- How did you generate that book in the past? How did you actually acquire the clients?

- How often and regularly is he in contact with his clients? How active are they?

- How much of your portfolio did you inherit at your current bank?

- How much of this book did you generate from scratch?

- Why would your clients move with you?

- What do you need to be able to offer your clients to achieve your business plan here?

- Discuss your top 10 clients? Discuss their needs, risk appetites, profiles, backgrounds etc. (It is critical

that the Names are not probed at this stage)

- What will do you as a worst case scenario in year 1?

- Are you confident of doing x amount on NNA in 6 months? (Please note that this is more of a challenging

and confidence testing question. A good banker will always commit to a minimum figure no matter

what).

- What are your expectations in terms of total compensation if you achieve this business plan. (At this

stage you can manage his expectations in accordance with the compensation system at your institution).

CLOSE THE CANDIDATE/FEEDBACKS (Receiving and communicating honest feedbacks)

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INTERVIEW WITH THE PRODUCTS & ADVISORY TEAM

At this stage you must have a fair idea if he would fit the bill. It is absolutely critical for you to arrange him to

meet with the key people running the Products and Advisory side of things. All top Private Bankers are always

interested in knowing exactly how they can service their top clients. If his top clients are currently offered a set

of products at a certain price, it is very unlikely they would be interested in moving to some other place where

the pricing is higher. At this stage the devil is in the details! It is very common for top bankers to have a change

of heart after this. All top bankers aspire to move their top clients in the 1st year. If their top clients cannot be

serviced this is not going to happen. At the end of this stage is usually a case of either you being able to services

his clients at the levels they are currently being serviced or you not being able to achieve that. If this stage

proves to be positive then you know you are on to a winner.


INTERVIEW / INTRODUCTION WITH THE TEAM – THE CULTURE

It is imperative to introduce a potential hire to the team to get their feedback. This can be members junior or

senior to the potential hire. It is a good idea to keep this stage fairly relaxed so that the candidate understands

the culture, team dynamics, motivation and the morale of the organization and vice versa. He could be the best

performer in the world, but if he is not going to fit in culturally it never works out in the long term.


THE FINAL INTERVIEW STAGE

This is where the candidate gets to meet with senior management and get all the final blessings involved. It is

also a good opportunity to verbally discuss the finer details of the offer. If there is a mismatch in his expectations

you must try and manage it at this stage. At the end of this meeting you must be absolutely confident of what

this candidate can do and what he is expecting in terms of an offer.



This is clearly one of the most important stages of the process. Considering you have followed the first 3 stages

correctly, this is where you ascertain very quickly if they have the right personality/cultural fit. But more

importantly you are the right place for their clients. We advise you view this stage as the 1st interview as

ascertaining whether the candidate is the right fit and every interview/meeting from there should be

researching into whether the target client is the right fit. If this stage is not completed correctly you will not only

waste valuable time, you will lose money!


One client conducted the interview process as they thought was correct, took references and successfully hired

a candidate. The candidate moved over and was positive about committing to the business plan as discussed.

After a number of weeks settling in the bank, the candidate started trying to bring on his client base. He was

shocked to find out that they didn’t have the relevant products, pricing and team to support their client base. A

meeting with the CIO had not been part of the interview process, but only the senior sales heads in the business.

The candidate persevered and with the help of the CIO tried to make the relevant changes to accommodate

their clients. After a number of months, he realized that the bank was not going to be able to 100% deliver what

his clients wanted, so reluctantly decided to hand in his notice and leave the bank. This process cost a

considerable amount of investment in time and also the cost in recruitment fees and salary. This could have

easily been eliminated through a detailed meeting with the CIO in the interview process.

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Stage 5: Pre References, Market Intelligence & Further Due Diligence

Unlike traditional recruitment, it is a good idea to ask your head hunter or the internal recruiter to provide all

the due diligence on the candidate at this stage. The Private Banking community is relatively small and is easy to

get unofficial background and reference checks on a good banker. You can do the traditional formal reference

check in the end as always. However, it is a good idea to get as much info from industry sources on a very

confidential basis to ensure there are no hidden skeletons in the closet! Any good recruiter should be capable of

furnishing you with these.


It important to run this stage alongside the other stages in the process, as it is a great way to help verify what is

being discussed. This is obviously got to be conducted discreetly.


One client progressed through the entire recruitment process and provided a written offer to a candidate.

Unfortunately their candidate had a compliance issue, which was clearly stated on governing bodies’ webpage.

This was not mentioned throughout the process and only highlighted once the candidate had accepted the offer

and the referencing had started. The candidates offer was withdrawn and the entire process had been a waste

of time.

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Stage 6: The Offer Stage

Even before you actually offer a candidate, you must be absolutely confident that he would definitely accept the

offer that is made. This is because of the fact that you have been closing and managing expectations of the

candidate right from day 1. An offer stage is not meant to be a stage for surprises. Competitors who religiously

follow this approach have a high success rate compared to those who don’t.

Remember, there must have been a compelling reason as to why a good private banker is leaving his current

organization and having a chat with you. Upon reflection, on joining your organization he must be able resolve

these issues. Most good private banker are well compensated, money alone is usually never a reason for a good

private banker to leave. If you as a hiring manager feel that you are taking care of the primary issues the banker

is facing at his current organization and have discussed and managed expectations continuously throughout the

process you can be confident that the banker will accept the offer.

The offer stage is more for putting things down in writing in black and white as opposed to negotiating and

being surprised!

Some key things to remember during this stage are as follows:

- A successful private will never leave without a compelling reason. Some examples of these can be better

platform, better pricing, lending capabilities, support system, senior roles and clearer compensation

structures. Is your offer meeting these requirements?

- A successful Private Banker is generating revenue monthly. When he moves from a bank to join another

bank he is usually always incurring some sort of a loss. Is there any way I can compensate for this loss?

Can you incentivize his performance and make sure he will deliver? Can you offer him a mile stone

bonus? For e.g. upon achieving $50M in NNA you will receive $50K in bonuses.

- It is useful to put yourself in their shoes at this stage. If the reason for them to leave not compelling

enough and he is not going to have any other financial benefit or any other benefit, why would he

accept your offer?



There is nothing worse than for a client and candidate to complete the whole interview process successfully,

only for the whole process to all apart because of the details of the offer.


One client had successfully completed the whole recruitment process and the candidates were not only

confident on delivering but positive about joining the team. When it came to reviewing the details of the offer,

the candidate was unhappy with the elements of how the bonus is paid. The candidate calculated that they

would be significantly worse off financially if they moved over. The elements of the bonus had only been

glossed over in the interview process and the client was under the impression all competitor banks hand a

similar structure.

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Authors:

Tayyab Mohamed & Paul Westall

http://www.agreus.co.uk

For a FREE consultation book an appointment with Paul Westall by following the link below:

https://www.timetrade.com/book/PRM2P

http://www.agreus.co.uk/

https://www.timetrade.com/book/PRM2P

why pb dont deliver and what to do about it ebook 2013

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