Heyday for Asian Bankers as the Region’s Millionaires Swell

Asian bankers are having a field day as the number of millionaires in the region swell

From Bloomberg (bold emphasis mine)

Asia-Pacific millionaires outnumbered those in Europe for the first time in 2010, according to a survey by Capgemini SA and Bank of America Corp. More millionaires means more spending and more demand for private wealth managers from banks such as BSI SA, JPMorgan Chase & Co. (JPM), UBS AG (UBSN) and HSBC Holdings Plc. (HSBA)Recruiters say too many banks are hunting too few experienced staff in the region, pushing up salaries and crimping profits.

“Good bankers have at least one offer on the table, if not two,” said Collardi, 37. “Today, if you want to be successful in hiring, you need to be forceful.”

Global demand for client relationship managers is expected to rise 13 percent over 2011 and 2012, while growth in the Asia- Pacific region will be double that, PricewaterhouseCoopers LLP said in an e-mail. That’s pushed top salaries in Singapore to almost twice the level in Switzerland, the world’s biggest offshore wealth manager, according to London-based recruitment firm EMA Partners International.

Senior private bankers in Singapore earn between $160,000 and $410,000 a year, while the comparative range in Switzerland is $152,000 to $210,000, EMA estimates.

“People are simply paying too much and that cannot be justified from an economic point of view,” said Thomas R. Meier, Zurich-based Julius Baer’s CEO in Asia. If a bank pays 30 percent more than a person’s salary at his previous employer, and the new recruit ends up adding just 5 percent more to revenue, the bank will feel the pinch, the 48-year-old said.

The premium to attract somebody new in Asia is 20 percent to 30 percent of their base compensation, said Matthew Streeton, partner at The Consulting Partnership, a Singapore-based recruitment firm. Usually, private bankers get a guaranteed bonus in their first year on top of the base salary and thereafter earn an annual bonus based on performance, he said…

Asia’s 3.3 million high-net-worth individuals had $10.8 trillion in assets, compared with the $10.2 trillion accumulated by their 3.1 million counterparts in Europe, according to the report published in June by Capgemini and Bank of America’s Merrill Lynch Global Wealth Management.

Recruiters say private bankers need an apprenticeship because wealthy clients expect to be advised by someone with experience who can understand their goals.

Remarkably Asian bankers are even paid more than their bosses or multinational employers.

Yet all these signify as mounting evidence of an ongoing paradigm shift from a myriad of agglomerated forces, such as globalization, wealth convergence, the internet, technology driven innovation and differences in the degree of the welfare state, economic freedom and applied administrative, fiscal and monetary policies.

Peter Buffett: Freedom over Money

Not everything is about money. Peter Buffett, son of one of the world's richest and investing savant Warren Buffett, gave up his inheritance of Berkshire Hathaway shares (worth about $72 million in 2010) for the freedom to live a life as musician.

Peter Buffett writes, (hat tip Professor Russ Roberts) [bold emphasis mine]

My inheritance was relatively modest, but it was more than most young people receive to get a start in life. Having that money was a privilege, a gift I had not earned. If I'd faced the necessity of making a living from day one, I would not have been able to follow the path I chose.

Would my father have helped me get started if I'd chosen a career on Wall Street? I'm sure he would have. Would he have given me a job at Berkshire Hathaway if I'd asked for one? I suppose so. But in either of those cases, the onus would have been on me to demonstrate that I felt a true vocation for those fields, rather than simply taking the course of least resistance. My father would not have served as an enabler of my taking the easy way out. That would not have been an exercise of privilege, but of diminishment.

This demonstrates the differences of value preferences. Peter's priorities are different from his father's. One cannot measure individual choices from aggregates or statistics.

Yet like Professor Roberts, who counselled his students “not to take the job that pays the most money” but instead go for trade which delivers “satisfaction, meaning, leisure, beauty, pride, and honor,” I recently advised my newly graduate eldest son not to seek the pursuit of money as the primary objective for career development, but to go for specialization in the field which he feels comfortable with.

After all, achieving career excellence is about the ability to serve consumers; where consumers ultimately determine one’s market value or career success (outside the political spectrum).

The Occupational Hazards of Caregiving

Caregiving to my misimpression seems as one of the popular overseas job for Filipinos. However, according to this news, only about 140,000 Filipinos are employed as caregivers in the US.

Yet this Gallup report reveals that a career in this health sector has been presented with more hazard than other type of work in terms of well-being, physical and emotional health.

Gallup on Caregiver’s Well Being

Americans who work a full-time job and say they care for an elderly or disabled family member, relative, or friend -- 16% of the full-time workforce -- suffer from lower wellbeing than those who work a full-time job but do not have additional caregiving responsibilities. Caregivers' 66.4 overall wellbeing score is significantly lower than the 70.2 among non-caregivers.

Gallup on Caregiver’s Physical Health

Americans who work a full-time job and say they care for an elderly or disabled family member, relative, or friend, suffer from poorer physical health than those who work a full-time job but do not have additional caregiving responsibilities. Caregivers, who represent 16% of the full-time American workforce, have a Physical Health Index score of 77.4, which is significantly lower than the 83.0 found among non-caregivers.

Gallup on Caregiver’s Emotional Health

Americans who work a full-time job and say they care for an elderly or disabled family member, relative, or friend, suffer from poorer emotional health than those who work a full-time job but do not have additional caregiving responsibilities. Caregivers, who represent 16% of the full-time American workforce, have an Emotional Health Index score of 78.0, which is significantly lower than the 81.9 found among non-caregivers.

I don’t know if the above dynamics also applies to Filipinos.

Nevertheless, given the high degree of mental stress involved perhaps this type of work commands a high pay based on high turnovers.

Here is an estimate of caregiver pay.

However compared to other jobs (above chart from money-zine.com), caregivers which belongs to the Healthcare support work, seems to be on the lowest quartile.

I have less data on this work to make a comprehensive commentary, except that I just find the state of the caregiving job as intriguing (and so is the reason for this post)

The Global Engineering Boom

The next career hotspot is evidently in engineering.

Major economies as Japan, Germany and Switzerland seem to be running short of Engineers.

This from the Financial Times (emphasis mine),

``Germany, a land renowned above all for its high standards of engineering, is facing an acute shortage of skilled engineers.

``Franz Fehrenbach, chief executive of Bosch, became the latest businessman to sound the alarm when he warned this week that the lack of engineers was “the key problem for the future”.

``VDI, the German association of engineers, believes the shortage is costing Europe's largest economy €7bn ($11bn, £5.5bn) a year and estimates that there are 95,000 unfilled posts, up from half that number two years ago.

``It is a similar situation in some neighbouring European countries such as Switzerland, where there are several thousand engineers lacking.

`` “Our shortage is not as serious as in Germany but it will get worse,” said Marina de Senarclens, head of Engineers Shape Our Future in Switzerland. “One reason is that new sectors such as financial services need engineers, meaning demand is ahead of supply.

`` “On the other hand, countries such as France and Italy are better at producing engineering students.”

``Mr Fehrenbach said for every 100 old engineers, only 90 young engineers were being trained in Germany, compared with an average of 190 in other western countries.

``Manfred Wittenstein, the founder of engineering company Wittenstein AG and the head of the VDMA engineering association, said: “It could act as a brake on our future growth.”

And so it is in Japan.

The ministry of internal affairs estimates that the digital technology industry alone is short by half a million engineers!

The fundamental problem is one of the declining interests by students in the field of science and engineering.

Courtesy of the New York Times

This from the New YorK Times, ``Universities call it “rikei banare,” or “flight from science.” The decline is growing so drastic that industry has begun advertising campaigns intended to make engineering look sexy and cool, and companies are slowly starting to import foreign workers, or sending jobs to where the engineers are, in Vietnam and India.”

In Japan, embracing foreign workers have been slowed by cultural rigidities.

``In the meantime, the country has slowly begun to accept more foreign engineers, but nowhere near the number that industry needs.

``While ingrained xenophobia is partly to blame, companies say Japan’s language and closed corporate culture also create barriers so high that many foreign engineers simply refuse to come, even when they are recruited.

``As a result, some companies are moving research jobs to India and Vietnam because they say it is easier than bringing non-Japanese employees here.” (NYT)

So aside from career opportunities, the obvious alternative is a potential boom in investments in engineering related business outsourcing here (IF we are able to generate enough quality graduates) and abroad.