Fundster bonus pools are expected to rebound this year, but they still won't recover to their early pandemic levels, at least according to the folks at a New York City-based, financial services-focused compensation consulting firm.

The team at Johnson Associates predicts, in their just-released "Financial Services Compensation: Second Quarter Trends and Year-End Projections" report, that at traditional asset managers, incentive compensation this year will be five to ten percent higher than in 2023, thanks to "market appreciation and stabilizing flows." That's a slight improvement from the Johnson team's outlook after Q1, when they predicted that fundsters' 2024 bonus pools would rise five percent from 2023 levels.

Yet despite the improving picture, the Johnson team still expects 2024 fundster bonus pools to lag those of the pandemic years. They predict that bonus pools this year to be slightly smaller than in 2022, more than 15 percent lower than in 2021, and more than 5 percent lower than in 2020.

The Johnson team expects the stock market to boost asset managers' AUM (and thus fees), while firms focus more on ETFs and on diversifying their offerings (into "alternatives, wealth management, technology platforms," etc.) And they predict that fundsters will "struggle to right-size headcount and talent composition." Indeed, they asset managers' headcount to retreat slightly this year from 2023, while still remaining a bit above 2022 levels and about five percent above 2021 levels (when a war for talent when "most firms increased headcount" and "voluntary turnover hit decade highs").

"Asset management firms expanded headcount throughout 2021 and 2022 and unwound in 2023 and 2024," the Johnson team writes. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE