Compensation in the Canadian wealth management business is expected to jump by about 20% this year, according to global executive search firm Russell Reynolds Associates.

“The Canadian asset and wealth management industry remained robust this year,” the firm says in a new report that looks at the global wealth management industry’s recruiting and compensation trends.

“Firms both upgraded talent and expanded capabilities to meet the demands of growth by hiring distribution and channel management executives, marketing and product development executives, portfolio managers with a global orientation and chief investment officers.”

The relative strength of the Canadian financial services industry made it easier for firms to compete for global talent, both by repatriating Canadians, and attracting senior U.S. and European executives, the search firm says.

Overall, it suggests that 2010 compensation levels are expected to rebound from 2009, increasing by 20% to 25%. “However, given the uncertainty in the marketplace in the second half of the year, these percentages may be moderated before year end,” it cautions.

Indeed, the firm notes that worldwide, bonus pools will be finalized later this year than in previous years. It also sees compensation heading higher in other regions, increasing 10% to 15% in the U.S. industry this year, and 15% to 20% in Europe and Asia.

Additionally, the report says that: demand for CEOs with investment backgrounds continued into 2010, yet finding qualified individuals proved increasingly difficult; and, chief investment officers were in great demand this year. Among portfolio managers, demand is up for global and emerging markets equity specialists, and compensation will reflect this; whereas it will likely be flat to down for long-only domestic equity analysts and portfolio managers. In fixed income, there’s demand in the high yield area; and, for hedge funds, it’s the event-driven, global macro and distressed credit sectors. Institutional distribution executives were in high demand, but the retail distribution talent market “was stagnant” it says.

Looking ahead, the firm says, 2011 looks promising for the industry. “Improved asset levels should boost profitability, and we expect recruiting activity to be up modestly, continuing 2010’s positive trends,” the search firm says.

For Canada, in particular, the firm says that the asset and wealth management market “will continue to experience strong growth — albeit with a temporary dip in talent demand in late 2010-early 2011.”

IE