NAB is focusing on retention as it tries to bring JBWere into its expending wealth management empire without losing key bankers.

The firm recently announced that it will buy 80.1% of Goldman Sachs JBWere for $99m. Current majority owner Goldman Sachs will retain the rest, but its name will be ditched from the brand. Subject to regulatory approval, the deal will be done by year-end and JBWere will become a portfolio business of NAB’s wealth division, MLC & NAB Wealth.

Redundancies should be limited because JBWere services a high-net-worth niche, while NAB’s wealth management operations are more generalist. A few back office jobs might be axed to avoid role duplication, but the front office seems secure because NAB wants to retain as many of JBWere’s 210 advisors as it can.

These bankers have 22,000 clients and $38bn in assets under advice, figures which give them a massive amount of bargaining power.

Not surprisingly, NAB is currently holding one-to-one meetings with JBWere revenue generators in an attempt to thrash out retention packages, according to one source with knowledge of the process, who asked not to be named. “The main threat is if the brokers run away and take their client book and their market knowledge with them. That would be very damaging to NAB.”

So the big question for JBWere’s bankers is whether they will jump ship now that their firm is falling mainly under the umbrella of a mere domestic bank, rather than a global powerhouse.

GSJBW head of private wealth management Paul Heath, who will head the joint venture, doesn’t expect many professionals will quit. He told The Australian that in contrast to the 1980s, NAB now has a track record of successfully running a wealth operation.

The firm will also keep its own brand and board, factors which could convince JBWere hotshots that they won't become Big Four drones.

But if they do decide to leave, the employment market is showing signs of recovery. “Recruitment has picked up a bit. Banks are hiring in wealth management, whereas six months ago this would have been unthinkable. But the numbers are a lot less than in 2007,” says Paula Horta, a consultant at the Brooklyn Group.

Recruitment

It remains to be seen whether NAB will need to hire for JBWere. But, even more so than its Aviva acquisition, NAB’s most recent purchase has certainly boosted its employer brand.

“With broker JBWere behind it, candidates may now be more attracted to NAB. It could see the current market as an opportunity to get high quality staff without so much competition from its larger rivals,” says Ryan Webster, a senior consultant at Robert Walters.

It will be interesting to see how NAB develops its recruitment strategies for JBWere. Foreign-owned private banks like UBS and Credit Suisse generally prefer people who can bring clients with them because they don’t have branch networks to attract potential investors, says Horta.

But now that JBWere is controlled by an Aussie firm with its own massive customer network, will having a big book be less important for future candidates? Let us know your thoughts below.