Wholesalers See Compensation Drop

However, hybrid wholesalers were insulated from the declines and saw increases of 8.8% and 18.4%, respectively, according to the research, which surveyed 18 asset managers.

The declines were more evident in other roles. For instance, external wholesalers saw a 20.7% decline, driven by a 22.3% reduction in variable compensation, according to kasina. Internal and external wholesaling managers experienced declines in total compensation of more than 32.7% and 22.3%, respectively, and national sales managers saw a dip of 13.5%.

kasina said external wholesalers and all management suffered from the fact that suppressed cash flows pushed basis‐point‐driven variable compensation way down in the fourth quarter of 2008.

Asset management firms estimated that 2009 will see modest increases in total compensation for most roles, but not quite back to 2007 levels.

Asset Management Response

kasina saw three trends among asset management firms trying to handle compensation and headcount amid the financial crisis.

1. Duck and cover: About 33% of surveyed firms are letting time pass.
2. Across-the-board cuts: About 45% of firms have made nominal changes to management teams and product lineups in order to feel that they are doing something constructive in response to the crisis.
3. Opportunistic rationalization: Opportunistic firms (about 22%) comprehend that the time is ripe for innovation through improving communication and building trust within, and outside of, the organization.

 

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More information about “Costs of Compensation: Sales and National Accounts 2009,” is available at www.kasina.com/reports.