Daniel Behar / 15 February

February Newsletter – Bonus Survey

Overview

The past 12 months have been a difficult and challenging year for all industries, and asset management is no exception. Whilst many firms have thrived, there have also been those who have severely underperformed due to a mixture of the pandemic, Brexit and the November 2020 US Presidential Elections. In January, Mason Blake surveyed hundreds of candidates in the asset management sector in order to get an idea of how these issues relate to bonuses and salary increases in 2021*. We asked the candidates four questions and have broken down our findings into the following areas: Investments, Distribution/Marketing, Product and Operations.

*These results were collected before many bonuses and pay reviews were issued so are to be taken as an indicator and not as factual.

 

Over three-quarters of candidates surveyed currently work at either large or medium-sized asset managers, and the majority of these work within the investment or distribution department of their firms.

As you can see from the graph above – an overwhelming majority of candidates are expecting to receive either the same or a higher bonus than they received in 2020, with only 20% expecting less, which would show us that despite the uncertainty and the shift to working from home, performance for the majority of firms has been better than expected.

 

 

Similarly, a large majority of candidates (71%) are expecting a pay rise this year, although with most having chosen 1-9%, it is possible that they may not be expecting as much as they have received in previous years.

There is of course a difference in findings when looking at each individual department. The next section will look at the results within each area.

Investment

56% of investment and front office professionals are expecting a higher bonus than the one they received last year with only 14% expecting less. Those working at large asset managers are the most confident, with over 65% of candidates expecting a higher bonus, compared with 52% of those working at medium-sized asset managers, and just 40% of candidates at smaller firms.

When it comes to potential salary increases there is even more optimism with 95% of those surveyed from large companies expecting a pay rise. However this drops to under 50% for those surveyed at mid-sized asset managers.

Distribution/Marketing

There is also cause for optimism in the distribution/marketing departments of asset managers, although most of those surveyed (48%) are expecting their bonus to remain around the same as it was in 2020. In fact, broken down further, only a third of candidates from larger and mid-sized institutions are expecting a higher bonus, and only 15% of those at smaller firms think they will get a higher bonus.

However, the vast majority of candidates surveyed in this area believe they are in line for a pay rise despite not expecting a higher bonus. Two-thirds from large asset managers are expecting a pay rise, this rises to over 70% of those at smaller asset managers and over 80% of those at medium-sized companies.

Product

The data with regards to product is a little more varied. The majority of candidates surveyed – over 80% – work in either large or medium-sized corporations, and these people are less sure of whether they will get a higher bonus this year. In fact, the same amount (27%) think they will receive less than they received in 2020. Almost half (45%) of candidates are expecting around the same as last year.

On the other hand, when it comes to potential pay-rises, there is a belief amongst those working in product that they will receive one. Over 75% of candidates at large asset managers are expecting a pay-rise even if they think they may get a lower bonus, although this drops to only a third of applicants who work at mid-sized firms.

Operations

Candidates surveyed in the operations space are also less optimistic about their bonus potential this year, as 72% of candidates are expecting either the same or less bonus than last year. Our data shows that those working at larger houses are expecting the same bonus with a salary increase, whereas those from smaller firms are more likely to expect a higher bonus but the same salary. This could be because some smaller firms don’t necessarily have a formal pay review scheme, so salary increases are often at management discretion. Bonus potential in operations might be stronger in smaller houses amidst the pandemic because leaner companies tend to be smaller, and can at times adapt quicker to change than larger firms.

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