Tim White of Kaye/Bassman Featured in Investment News Article, As Industry Grows, Pay Swells
FOR IMMEDIATE RELEASE: Tim White of Kaye/Bassman Featured in Investment News Article, As Industry Grows, Pay Swells
Dallas, Texas, 2/25/2013:
In early summer, before layoffs began sweeping across Wall Street, billboard-sized photos of employees were plastered on the walls, pillars and elevator banks of Credit Suisse Group AG’s offices in the United States and abroad.
The museum-quality prints, depicting workers from administrative assistants to senior executives, were emblazoned with motivational words like “Proactive” and “Partner.” By mid-July, however, the photos disappeared and the Swiss banking giant began laying off 2,000 employees.
Security guards prevented employees from taking cell-phone pictures as the posters were stripped away, according to one employee who was present.
“It sent an entirely wrong message,” said an employee, who was not authorized to speak publicly. “Management literally threw away that kind of money on something so trivial, while planning to cut thousands of jobs.”
A bank spokeswoman declined to comment on the internal campaign or the employee’s comments.
Credit Suisse’s timing illustrates the unanticipated dangers of rampant job-cutting, which tend to run in cycles on Wall Street. Employee morale often plummets at a time when survivors are asked to pick up more responsibility and customer relations can suffer as service and relationships deteriorate.
What’s more, layoffs inartfully constructed can come across to shareholders as Band-Aid solutions that at best temporarily cut expenses and at worst pare away reserves of talented people.
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“They finished cutting the fat and now they’re into the muscle and bone,” said Tim White, a managing partner who specializes in wealth management at the recruiting firm Kaye/Bassman International in Dallas.
By Liz Skinner February 24, 2013 12:01 am ET
Financial advisers have reaped double-digit pay gains over the past two years thanks to firm growth and increased profitability, superior market performance and demand for talented planners. Compensation for the chief executive or president of advisory firms increased about 18% from 2010 to 2012, to an average of $281,966, according to the Financial Planning Association’s latest Financial Planning Compensation Study, which surveyed 1,000 advisers. Compensation includes salary, bonus and incentive pay. Total pay for three different levels of financial planners surveyed increased about 12% from 2010 to last year. Senior financial planners took in $145,308 on average in 2012, junior planners $68,610 and paraplanners $55,033, the survey found. “Incomes in the industry today are at a record level, and firms are generating more profits than they ever have before,” said Philip Palaveev, chief executive of The Ensemble Practice LLC. “It’s a successful and quickly growing industry.”
Adviser compensation has risen significantly as firms have grown in size and have begun to recover from the damage done during the financial crisis, Mr. Palaveev said. From 2008 through 2010, firms were very conservative with pay increases and typically cut owner compensation. The increase in payouts for advisers in 2012 signals that “the restoration is complete,” and suggests optimism about the market, Mr. Palaveev said. Growth in U.S. stock markets had a lot to do with advisers’ compensation growth over that period. “The organic growth of the market is giving you a raise just based on assets under management,” said Tim Welsh, founder of Nexus Strategy LLC, a consultant to advisers. “So something is going wrong if you didn’t make more last year.”
The CEO and president titles showed the greatest pay increase because those roles typically exist only at a mature firm that has invested in professional management, and those are the most profitable advisory businesses, Mr. Welsh said. Those firms have invested in infrastructure and put processes in place that allow the adviser to focus on clients, he said. Tim White, a recruiter at Kaye/Bassman International Corp., attributes about 80% of the increase in adviser compensation to the general rise in the markets, and much of the rest to advisers’ increased use of alternative investments such as real estate investment trusts, which command higher fees.
In addition, adviser compensation is up because of higher demand for experienced and talented advisers, who are moving between wirehouses or to independent firms and securing large transition packages, he said. “The baby boomer population of financial advisers who are close to retiring and may have one last move left in them are being offered deals that are off the charts,” Mr. White said.
The FPA’s 2012 pay figures largely jibe with progress in the industry since the InvestmentNews/Moss Adams Adviser Compensation and Staffing Study of 2011, when pay was reported slightly lower in most positions. Mr. Palaveev is collaborating with InvestmentNews on its 2013 compensation study, and he said strong demand for talented, experienced advisers will continue to push compensation higher in the coming years.
Mr. White said the only thing he sees standing in the way of adviser compensation continuing to advance over the next few years is the possibility that the Financial Industry Regulatory Authority Inc. would require advisers to disclose incentive compensation upon switching firms. That could chill adviser movement, he said. Currently, Finra is accepting comments on such a proposal.
Founded in 1981, Kaye/Bassman has grown to become the largest single-site executive search and recruitment firm in the United States with the simple mission of impacting companies and enhancing careers by providing the finest in professional, executive, technical and scientific search. Kaye/Bassman provides strategic recruiting and executive search solutions in over 20 industry practice areas including construction recruiting, healthcare recruiting, banking executive search, energy recruitment and many more. Next Level Recruiting Training, a recruiting training organization, Next Level Exchange, a recruiting training best practices information exchange, and Next Level Marketing Communications are also Kaye/Bassman companies.
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