Money management professionals can expect to see a 5% to 10% decline in bonus payouts in 2016 from last year, said projections from compensation consultant Johnson Associates.
This compares with the 5% decline in 2015 from the year before. By comparison, Johnson Associates reported in May 2015 that bonuses for 2014 were 10% higher than they were the year prior.
The consultant attributes lower average assets under management, market depreciation and net flows on average being generally flat or negative as reasons compensation should be down in 2016 from the year before.
The report also cites it being a U.S. election year, as well as “interest rates and ongoing uncertainty in world markets” as “key 2016 incentive drivers.”
Johnson Associates also expects layoffs and hiring freezes in the asset management industry this year.
Incentive payouts for professionals in private equity are expected to drop 5%, while professionals in the hedge fund industry can expect a decrease of 5% to 15% from last year's bonus.
The projections are based on first-quarter trends in the financial services industry.