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Wednesday, February 18, 2015

You're About to Beat Out I-Bankers

News summary by MFWire's editors

If things keep going the way they have been, employees at asset managers will soon be paid more on average than investment bankers.

Harriet Agnew and Laura Noonan of the Financial Times report that, according to analysis by think tank New Financial, average compensation cost per employee at asset managers will surpass the same figure for investment banks by next year. That figure has fallen 25 percent since 2006 to $288,000 for investment banks, while it has risen 22 percent to $263,000 for asset managers.

"Investment banking staff are taking a shrinking portion of a shrinking pot," New Financial's William Wright tells the FT. "Asset managers are taking a constant portion of a growing pot."

The growing pot that Wright's pointing to is the growing assets under management at mutual fund shops and other asset managers. The rising market tide has buoyed many asset managers' bottom lines, even as banks of all stripes have come under more regulatory scrutiny in the wake of the financial crisis.

So besides helping you justify your raise request or your hiring expansion plans, what does this rising tide mean for you? It might be a boon on the recruiting side when it comes to finding promising young talent. Andrew Breach, head of global banking and asset management at PageGroup (a recruiter), says, in the FT's words, that "moving from an investment bank to an asset management firm was an increasingly popular choice over the past two years." 

Edited by: Neil Anderson, Managing Editor

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