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Money Management

Johnson Associates: Manager year-end bonuses projected to be 5% more than last year

Money management professionals can expect to see a 5% increase in year-end bonus payments over last year and are largely keeping track with professionals in other Wall Street business segments, who are also expected to see gains, said projections from compensation consultant Johnson Associates.

The report marks the second consecutive year that Wall Street is expected to receive "moderately larger" year-end incentive payments compared to the previous year, a news release said. In comparison, money management professionals were expected to see a 5% to 10% increase in bonus payouts this time last year.

The asset management segment was initially on track to see a 7% increase in year-end incentives, but starting in the second half of this year projections slid to a 5% increase due, in part, to rising competition among money managers and fee pressures, said Alan Johnson, managing director of Johnson Associates, in a phone interview.

These factors are also expected to lower incentive compensation moving into 2019, Mr. Johnson said.

"What we've see with our clients is continuing movement into lower-fee products. It used to be that you'd worry about assets leaving, but now you worry about products going from 100 basis points to 50 basis points. It isn't just assets leaving, but them moving to lower fee products which isn't as obvious," Mr. Johnson added.

Financial services professionals set to see the largest increases to their year-end incentives, which include cash bonuses and equity awards, are those in equity sales and trading roles, who can expect a 15% to 20% boost in incentive awards over last year, Johnson Associates' third-quarter analysis found.