Several firms have decided to absolutely feast on private banking recruiting so far this year. The ranks of J.P. Morgan, Goldman Sachs, Bernstein, and Citi have been migrating to rivals UBS with a smattering finding their way to Merrill and a few others.
In fact, over the past 120 days. UBS alone has announced nearly $10B in private banking assets from J.P.Morgan and Wells have migrated to the firm. Another $5B, in that same period, has moved to First Republic and Merrill.
So where is Morgan Stanley?
In a conversation passed to us from a recruiter who asked to remain anonymous, Morgan Stanley has eschewed private banking recruitment unless the bankers have an interest in taking a greatly reduced ‘W-2 based’ deal structure. The quote we were passed from Ben Firestein, National Director of Recruiting for Morgan Stanley:
“We’re not interested in competing for private bankers at those valuations. We can’t get anywhere near those numbers.”
That begs the question, what are ‘those numbers’ that Mr. Firestein is staying away from? UBS specifically is doing deals that focus on private bankers score cards rather than their W-2 numbers. That makes the deals remarkably more lucrative than anything it’s competitors are offering. When we say more lucrative we mean 4-6 times more lucrative. A 20 year vet from a private bank would be offered a $2.5M deal from Morgan Stanley, whereas UBS is offering a $10M deal.
That’s not in the same universe, and it gives context to the language used by Mr. Firestein when he said “…not interested in competing”.
It’s an interesting calculation made by Morgan Stanley versus its rivals. Some might say that in the wealth management space Morgan Stanley may not see a meaningful rival at the moment. Wells Fargo is limping along, Merrill/BofA is a shell of its former self, and UBS is a boutique compared to the scale of MS.
Still, recruiting moves in cycles, and the numbers being put on the board at UBS won’t go unnoticed. If we had to place a bet, at some point Morgan Stanley and Mr. Firestein will change his mind.
If/when that happens, expect private banker recruiting to absolutely explode.
