Ignites | Mike Fitzgerald Comments on Year-End Bonuses and Belt-Tightening in 2019

Mike Fitzgerald, an MD in the Asset Management practice at RSR Partners is featured in a recent article published by Ignites, a Financial Times service and the leading online news source for professionals working in the mutual fund industry. The article takes a close look at how firms are rewarding high performers this year before tightening belts in 2019. Ignites predicts that bonuses are projected to grow, but “underperformers could soon be looking for work.” Fitzgerald provides the following insight:

“The dispersion in bonuses comes as discretionary incentive pay makes up a bigger chunk of overall compensation. The portion of pay tied to commissions, meanwhile, is waning. Though bonuses are still largely based on the revenue an employee generates, incentive formulas also increasingly rely on factors such as referring business to other parts of the firm and ‘being a good soldier’ by getting administrative tasks done,” Fitzgerald says. “It’s really being done to align the interests of the firm with the individual.”

Fitzgerald notes, “Firms are also reallocating resources away from external sales teams and toward the home office as the traditional wholesaler field is ‘scrutinized and rationalized.’ Firms are looking for the hard-to-find combination of people who both are technologically savvy and understand the industry and its sales process. Data analysis and other tech investments not only boost investment and research capabilities, but can also make sales and distribution more efficient.”

“Meanwhile, the influence of home office teams is growing,” Fitzgerald says, “and both research and strategic account players remain in high demand.”

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