Asset managers are in line to get paid more than investment bankers by 2016, according to research by New Financial.
The think-tank’s report finds that pay at investment banks has been falling since the financial crisis, but has been rising steadily at asset management firms for the past decade.
Compensation per employee fell by 25% from 2006 to 2014 to around $288,000 (€252,645) at global investment banks. Average compensation per employee at asset management firms rose by 22% in the same period to $263,000 (€230,722) – a trend that indicates asset managers will be paid more than investment bankers by 2016.
Pay has fallen from roughly half of revenues at investment banks in the five years before the crisis to about 40% since. The report also found that there is a huge concentration of pay at the very top. On average, between one-quarter and one-third of the bonus pool at investment banks is paid out to just 1% of the staff.
“In banking and finance, the question of pay and bonuses is not just about the numbers. Instead, it is an important barometer of the shifting balance in how the capital markets industry thinks about itself in relation to its shareholders, to its clients, and to society,” says William Wright, founder and managing director of New Financial.
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