When it comes to comparing asset management and investment banking, there’s a new level of competition in the field. Pay scales are being matched and raised by asset management firm in order to try and win talent from the other side, according to research from Financial Times fund management.
An example of this is the £436,000 salary at Pimco to match the banking industry compensation: Pimco have raised their salaries up to twice their base amount, at least at the upper level. To keep pace with these groups, other companies in the asset management sector have taken up the cause of heightened salaries in order to prevent being left in the shadows of others. Companies such as Pimco offer salaries with incentives and other benefits that are higher on average than those in the investment banking industry, which ranges from just £185,000 at Schroders to a high of £232,000 at Goldman Sachs according to this study. This is so the fund companies can work with the bonus cap and keep pace with banks that have also been raising salaries and offering benefits. Overall the compensation offered by asset management companies is higher than what is offered by banks.
Tim Wright of Pricewaterhouse Coopers believes that the higher offers, which have been adopted by many companies, are being used to draw those who have experience in senior management and other valued positions. The hope is to keep these top candidates from going to the investment banks instead. Although salaries have gone up quite a bit at asset management companies, the practice hasn’t been across the board. It tends to be in certain divisions such as fixed income. Even less experienced employees have been starting to see their pay scales go up; however, in some asset management groups the overall compensation package tends to shift with the flow of fund performance.