Italian private banks are offering multi-million euro upfront payments to poach top wealth managers as competition to manage fortunes for the ultra-rich intensifies across the country.
Lenders are paying bonuses equal to 1 percent to 3 percent of portfolio assets alongside roughly half of future client revenue to recruit executives managing billions of dollars.
The aggressive recruitment drive was highlighted when French lender BNP Paribas intervened in negotiations between Swiss private bank Lombard Odier and a team of advisers leaving Italian rival Mediobanca. BNP Paribas offered the bankers an upfront percentage of transferred assets and a share of future earnings in a contract worth tens of millions of euros.
Alberica Brivio Sforza, head of private banking at Lombard Odier in Italy, said the deal allowed the bankers to liquidate years of work at once and collect millions of euros from day one.
Rise of tied agent contracts
The hiring battle relies on tied agent contracts, known in Italy as promotori finanziari. These agreements allow wealth advisers to operate as self-employed consultants linked to a single institution rather than as traditional staff employees.
Financial promoters have long operated at Italian firms such as Banca Generali and Intesa Sanpaolo unit Fideuram, but their expansion into upper-tier private banking over the past two years has split the conservative industry.
A senior wealth management executive said aggressive lenders were literally buying portfolios by paying upfront fees on transferred assets, predicting the practice would boomerang with a big bang.
Private equity influx since Eurozone crisis
The intense rivalry traces back to the 2012 Eurozone crisis, when former European Central Bank president Mario Draghi pledged to do whatever it takes to preserve the euro. A senior executive noted that those words reassured international investors that nations such as Italy and Spain would not be left to fall off a cliff.
The pledge also unleashed a wave of private equity investment into Italian businesses. Alberto Cirillo, co-head of private wealth management for continental Europe at Goldman Sachs, said active private equity buyouts have driven Italian market growth continuously since 2012.
Investment funds targeted small and medium-sized family firms, described by bankers as hidden treasures due to their low debt levels and strong cash reserves. Sale events allowed business owners to cash out hundreds of millions of euros, creating a lucrative new pool of private wealth clients.
Swiss wealth manager Pictet and Politecnico di Milano estimated that nearly 3,500 transactions worth 362 billion euros took place between 2013 and 2025. They project another 3,900 deals valued at almost 350 billion euros will occur over the next decade.
Data from Associazione Italiana Private Banking showed Italian private banking assets reached a record 1.4 trillion euros at the end of 2025, double the figure from 10 years earlier. Rob Mullan, co-head of private wealth management at Goldman Sachs, said Italy's family business sector created an ideal transaction market and represented a key growth area for the firm.
Competition and banking sector M&A
International institutions including US firms Goldman Sachs and JPMorgan Chase, alongside Swiss bank UBS, dominate Italy's ultra-wealthy market segment. Morgan Stanley exited the market after selling its private wealth business in the UK, Italy, and the Middle East to Credit Suisse in 2013, a unit that transferred to UBS in 2023.
To challenge dominant firms, Italian banks and smaller European lenders adopted tied agent structures that larger international competitors refuse to use. Sarah Catania, head of private banking for continental Europe at JPMorgan, said the firm avoids short-term opportunistic deals, focusing instead on career stability to mirror multi-generational client relationships.
Competition has accelerated over the past 18 months following bank consolidation, including the acquisition of Mediobanca by Monte dei Paschi di Siena. Rivals have moved quickly to recruit advisers from Mediobanca, long considered Italy's premier wealth management brand.
According to the Financial Times, dozens of Mediobanca advisers have joined competitors such as BNP Paribas, Deutsche Bank, and Intesa Sanpaolo as tied agents. Intesa Sanpaolo submitted a joint 30.6 billion euro takeover bid for Monte dei Paschi di Siena alongside BPER in June, seeking Mediobanca's private banking unit, while Monte dei Paschi di Siena launched separate bids for two other rivals.
Doubt over long-term profitability
Industry executives warn that paying lavish upfront sums produces unprofitable growth. Lombard Odier estimates that tied agents accounted for just over 60 percent of the Italian private banking sector by March, but notes that most serve mid-affluent clients rather than the ultra-rich.
Sforza explained that tied agent models generate profit from smaller clients where asset yields range between 2 percent and 4 percent due to high recurring fees. However, yields decline steeply among ultra-wealthy clients who negotiate lower fees while demanding costly, customized investment services.
Sforza added that she was convinced the bidding war would eventually end because institutions would fail to turn a profit on advisers who receive excessive upfront payouts.
