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Less wealth means less pay for high-net-worth advisers

Compensation is expected to rise in some sectors of Wall Street this year — but not for bankers and advisers who work with high-net-worth clients, according to a new report.

Compensation is expected to rise in some sectors of Wall Street this year — but not for bankers and advisers who work with high-net-worth clients, according to a new report.
Brokers who advise these wealthy individuals could see their pay decline by as much as 25% this year, according to a study from compensation consultants at New York-based Johnson Associates Inc.
Broad declines in equity and fixed-income markets have crushed the value of high-net-worth clients’ portfolios over the last year, meaning their brokers will collect substantially lower fees from these depressed asset levels for the remainder of 2009.
That’s unless, of course, there’s a major market rebound over the next six months, said Michelle Vitale, an analyst at Johnson Associates.
“The good news, however, is that wealthy individuals tend to be more patient and less likely to impulsively move their money elsewhere,” she said.
Other Wall Street professionals will see even steeper drops in their 2009 payouts. Johnson Associates predicts that asset managers could see compensation plummet 25% to 35%, while hedge fund managers will likely earn 20% to 30% less this year than last.
Equity and fixed-income traders, however, are poised to cash in this year. Johnson Associates projects that pay packages should increase 20% to 30% for them, fueled by heightened market volatility and robust flows, Ms. Vitale said.