The fundster bonus pool rebound looks even brighter than earlier this year, though it still won't match its early pandemic peak, 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-related "Financial Services Compensation Third Quarter Trends and Year-End Projections" report, that at traditional asset managers, incentive compensation this year will be 7 to 12 percent higher than in 2023, thanks to "market appreciation" and "active ETF and alternatives inflows." That's an improvement from the Johnson team's Q2 report, when they predicted that fundsters' 2024 bonus pools would rise 5 to 10 percent, and from the Q1 report, when the Johnson team predicted a 5-percent 2024 fundster bonus pool increase.

(By comparison, the Johnson team now predicts 2024 bonus pool increases of 5 to 15 percent for hedge funds, 7 to 12 percent for wealth management firms, 5 percent for private equity, 10 percent for private credit, and flat for real estate investing. For investment and commercial banking, they predict a wide range of bonus pool change ranges, from 5 percent down to flat in retail and commercial banking, all the way to 25 percent to 35 percent up in debt underwriting.)

Yet despite the picture improving yet again for asset managers, the Johnson team still expects 2024 fundster bonus pools to lag those of the early pandemic, specifically 2020 and 2021. They predict that bonus pools this year will be slightly higher than in 2022 but down almost 5 percent from 2020, and the 2021 peak was almost 15 percent above 2020.

The Johnson team expects the resilient bull market in stocks to boost fund firms' revenues, while also predicting flat headcount "as firms slow hiring and voluntary turnover declines." They also see active ETFs boosting asset managers' flows (and fees) and describe alternatives as "a critical strategic initiative at most of the largest firms." Bonuses for fixed income fundsters will be "up moderately," the Johnson team adds. 

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