Why private banks should stop poaching and start coaching

With the growth of the high-net-worth population in Asia–Pacific significantly outpacing the rest of the world, it is no wonder that the demand for wealth management talent in Asia is at an all-time high. More than half of wealth management firms plan to increase staffing levels by at least 10-to-20 percent. However, firms face a limited talent pool to fill their ranks.

How then can wealth management firms recruit and retain enough advisors to close the talent gap? The answer does not lie in poaching talent based on sales performance or a client rolodex. Rather, Corporate Executive Board research shows that firms that recruit based on behavioral competencies, grow talent from within, and increase advisors’ productivity achieve superior talent outcomes over time.

Wealth management firms have long over-estimated the benefits of luring advisors away from competitors. Firms expect tenured advisors to bring a significant portion of their clients with them when they switch firms. Yet, CEB data shows that only 38 percent of clients say they would follow their advisor to a new firm. Furthermore, data from CEB’s global benchmark of advisors indicates that advisors with more industry experience are not more productive than their less experienced counterparts. In fact, average productivity increases with tenure at the current firm, not tenure in the industry. Our research suggests that poachers who pay a premium for experienced advisors are left wanting as advisors don’t bring over the expected clients and are also less productive.

To build a sustainable and productive talent pipeline, CEB recommends Asian wealth management executives start investing in structured and consistent retention, interviewing, onboarding and coaching practices. To do this effectively, Asian wealth executives should:

Retain the best people: Wealth management firms should identify top performers and involve senior executives in their development. Most high performers leave an organization not because of compensation but because they do not see a clear career trajectory or feel that the organization values them.

Replicate attributes of existing high performers: Leading firms have found that high performers exhibit high emotional intelligence and possess the ability to motivate clients to take action. Using the attributes of current high-performers, organizations can development the profile of the ideal candidate and seek to replicate those qualities across the firm.

Accelerate integration into the organization: Most onboarding programs fail to provide new advisors with the network-building opportunities and coaching that are crucial to productivity. Organizations should provide ample support to new advisors especially within the first 180 days. Additionally, CEB research shows that new hires who are satisfied with coaching and meet frequently with their teams achieve average firm productivity more quickly than those who do not.

Leverage team structures to compensate for advisor skill and knowledge gaps: By creating complementary teams, firms not only make up for the lack of holistic advisory expertise in the region but also better serve their high-net-worth clients.

Competition for wealth advisory talent across Asia is poised to remain fierce. Firms that avoid the temptation to “poach for growth” and instead invest to hire and develop talent that best fits their firm will achieve faster productivity gains and position themselves for long-term success as the market grows.

The Corporate Executive Board (EXBD) drives faster, more effective decision-making among the world's leading executives and business professionals. Powered by a member network that spans over 50 countries and represents 85% of the world's Fortune 500 companies, the Corporate Executive Board offers the unique research insights along with an integrated suite of members-only tools and resources that enable the world's most successful organizations to deliver superior business outcomes.