Global fund managers are likely to witness up to 35 per cent cut in bonuses this year even as the asset and wealth management industry is upbeat about a recovery in financial markets worldwide.
According to global executive search and assessment firm Russell Reynolds Associates, this year would be tougher than ever before for chief executives and boards at asset and wealth management firms, to communicate the right performance and reward message.
"Profitability and thus bonus levels will be driven by three factors: rebound in investment performance, retention of assets under management and how quickly and deeply firms trimmed costs when the downturn hit," Russell Reynolds Associates' Asset and Wealth Management Practice MD Cornelia L Kiley said.
"Even though accruals are now moving in the right direction, unless firms were able to align all three factors, bonus pools are likely down 20 to 35 per cent from last year," Kiley added.
The report is a qualitative review of compensation trends within both traditional asset and wealth management firms and those focusing on hedge funds, real estate and private equity in the Americas, Europe and Asia/Pacific.