Bank trust and investment management units, eager to keep up with nonbanks in the competition for wealthy clients, are on a hiring binge.
Executive recruiters say requests for investment management experts have risen as much as 30% to 35% a year for the past three years, with demand for experienced financial marketers running especially high. To fill business development positions, banks are seeking executives who have long lists of client contacts - often culled through a career at a money management firm or during a stint as a lender to the affluent.
"The banks are looking in particular to market mutual funds to both emerging wealthy and truly wealthy prospects," said M.J. Rankin, a recruiter of investment professionals who is based in Lake Geneva, Wis. "What we've seen in the last two years is a huge increase in people recruiting."
Bankers and recruiters attribute the trend in part to a thirst for fresh assets and talent at newly merged or integrated banks. Scores of people experienced in working with wealthy clients left or lost their jobs during the last wave of bank consolidation, forcing many newly integrated banks to recruit.
"There is a lot of talent and (there are) a lot of people who may be overlooked in a merger either because they don't want to wait around for things to get settled or the new management is bringing its own team," Ms. Rankin said.
Mellon Bank Corp., which in 1994 acquired the Dreyfus Corp., has added more than 30 salespeople to its private asset management unit in the past two and a half years. Many of the new recruits are seasoned bankers, said J.L. Carty, a first vice president who heads national sales for Mellon's wealth-management division.
"My first view was not to hire people from banks," Mr. Carty admitted. "I wanted people who had sold investment products to people and were used to gaining leads on their own without the support structure of a bank."
But after interviewing several commercial bankers, he changed his mind and placed many of them in sales positions. Many of their clients were borrowers who now had investment management needs.
"You would not have expected people who had been lenders to be entrusted with investment management," Mr. Carty acknowledged, noting that at Mellon, "the degree of success has been very good."
But another bank-housed investment management business has avoided bankers, particularly those with lending backgrounds.
Peter E. "Tony" Guernsey Jr., Union Bank of Switzerland's managing director of domestic private banking in New York, recently hired a team of marketers and looked for people who already had relationships with wealthy clients at investment firms.
"There is a myriad of wonderful former relationship managers from corporate lending who want to transfer over to private banking," Mr. Guernsey said, "but unfortunately they did not get an education on the asset side of the balance sheet."
He added that the transition to working at the clients' whims is not a smooth one. "It's a very different role, because before, the client was dedicated to them," Mr. Guernsey said.
UBS decided to go after less-available candidates it deemed more desirable.
"Developing a business from scratch, I really tried to hire people who had positive relationships with high-net-worth clients at other organizations," Mr. Guernsey said.
Banks are also requesting that recruiters look for executives who, though they lack financial services experience, have connections with wealthy people.
These kinds of candidates "just have excellent Rolodexes, personally or from a past profession," said J. David Barrett, a partner at Heidrick & Struggles.
"If someone has an excellent relationship base, you can teach them the subtleties of the trust business," Mr. Barrett said. Banks typcially will spend six to 12 months training these executives before letting them loose on prospects.
Heidrick & Struggles has received an increasing number of requests from money-center, regional, and foreign banks, which Mr. Barrett said are more "opportunistic in terms of who they'll hire" and are consequently offering better compensation than in the past.
"Ten years ago it was a lot more sleepy as they waited for the phones to ring," he said. "Now, it's a much more proactive solicitation. The banks had to upgrade the professionalism of the marketing staffs."
Other recruiters have observed a trend of executives without banking experience getting investment management jobs and being compensated to make the switch. Citicorp has long been known to be in the forefront of that movement.
"Citibank is hiring in their global investment area," said Michael P. Castine, a senior director at Spencer Stuart in New York. "I think they paid the market rate to attract the right people."
Mr. Castine said other bank-owned investment managers are willing to rev up sales by hiring people with consumer-goods marketing backgrounds. But while they would take somebody from a company such as Procter & Gamble, he said, they still avoid what he termed the "MTV" type.
"The bank still has to have a conservative image when people are turning over their money," he said.