The comments by Nick Durlacher, chairman of the Securities and Futures Authority, and Phillip Thorpe, chief executive of Imro, followed the acrimonious departure of Nicola Horlick from Morgan Grenfell Asset Management last week.
Their comments were not aimed at MGAM directly but at an industry which over recent months has been dogged by the antics of characters perceived as star performers.
Only four months ago MGAM sacked Peter Young, once one of its top-performing fund managers, after establishing he had set up Luxembourg holding companies to hide his investments in unlisted securities. Nick Leeson, now in jail after breaking Barings, was perceived as a star at the bank before it collapsed in February 1995. The same is true of Yasuo Hamanaka, a trader at Japan's Sumitomo.
Mr Durlacher said: "To some extent management have brought it upon themselves by the willingness to put so much of the reward for strong performance on individual performance and individual bonuses. The danger is that it's replaced... loyalty."
MGAM is fighting to reassure its clients that Mrs Horlick's departure will not impact on the performance of the group, even though she was considered to be one of the key players behind its improved record in recent years.
Dubbed Superwoman for her ability to juggle her hectic family life - she has five children and an investment banker husband - and her "star" role as head of pension funds at MGAM, she was rumoured to earn more than pounds 1m a year.
"We use the word 'stars' because we borrowed it from Hollywood and one can observe from casual reading of memoirs coming out of Hollywood that they were difficult to manage for the studios," said Mr Durlacher.
Mr Thorpe said he saw nothing wrong with businesses attempting to hire the best people. "However, we are concerned when management's attention seems to wholly focused on performance," he said.
MGAM suspects that Mrs Horlick was trying to poach some its top fund managers. She denies this.
City sources pointed out the irony of MGAM's situation because Deutsche Morgan Grenfell, its parent company, is well known for its aggressive stance on hiring. Last year it faced legal action for poaching a team of traders from ING Barings.
While hiring teams en masse can be an effective way to build a business, many in the City wonder if it pays off long-term by winning loyalty. "You don't buy their loyalty. For a while you do, until the next big offer comes along," said Phil Rivett, chairman of Coopers & Lybrand's capital markets group.
Late last year Andrew Large, chairman of the Securities and Investments Board, also called for strong management to control stars.
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