Banks have become unwelcoming to applicants with less conventional income and Investec warned many will be barred from larger loans from mainstream mortgage lenders.
Almost a third (32%) of IFAs said clients expect at least half of their bonus for the 2010/2011 tax year to be paid in cash or deferred cash with the rest paid out as shares or share options, according to Investec research.
Just 8% of IFAs said clients expect their bonus pay outs with the majoritry in cash or deferred cash, but 28% said cash is expected to be less than 10% of their clients’ bonus payments this year. This could penalise some as many banks look at the value of a clients’ property rather than their income and overall assets.
Jack Jones of Investec Specialist Private Bank said: “Although many of these individuals look set to receive significant bonuses, some will struggle to get mortgages and other personal loans approved due to the less flexible lending criteria adopted by some banks.”
According to The FT this morning, more than one in ten bankers and traders could receive no bonus at all with pools down 20-30% at most big investment banks.
Armstrong International, the European executive search firm, said banks have also been skewing bonus payments to the highest and lowest paid employees.
Matthew Osborne, a partner at the firm said: “Banks are saying: ‘Let’s pay only the top revenue generators and the lower-ranked staff, but not the mediocre people in the middle’.”