The battle for talent is intensifying, with equity, company culture and career progression among the top pull factors for senior sales and marketing executives, a report says.

Five “essential elements” will shape an investment executive’s decision to switch firms in 2016: An increase in compensation, equity participation, a positive corporate culture, strong company leadership and an appreciation for diversity, according to a new report.

The report, entitled The Disconnect Between Intent & Execution, is the seventh annual executive survey by the executive search firm Kathy Freeman Company. This year’s report is based on responses from around 200 senior sales and marketing executives in the investment industry.

Around two-thirds (66 per cent) of those surveyed said they would consider a move in 2016 – the second highest percentage since Kathy Freeman Company first asked that question in 2009 and up from 57 per cent in 2015. Despite this, however, few are actually doing so: only 15 per cent took an outside position last year while only 29 per cent went to an interview.

Meanwhile, equity has moved from “wish list” to become table stakes. While past research showed that people would take less cash in exchange for equity, “almost everyone has equity and expects it” today, the report said. The figures reinforce this: 67 per cent said their firm recognizes the importance of equity; 69 per cent currently have equity; and 74 per cent received their allocation in the past 12 months.

Another crucial element of talent management relates to company culture – one of the underlying reasons people make a move or stay, according to the report. Interestingly, over half (55 per cent) said they would remain at a firm with a great company culture even if the compensation wasn’t as competitive.

The topic of leadership - another big “selling point” - was also covered. Among the findings in this section was that “we frequently hear frustration from younger talent stuck in middle management positions with no clear path to advance,” the report said. Adding to this, only 55 per cent agreed that their firm is working proactively to develop next-generation of talent, while succession planning was also flagged as an area of concern.

Lastly, based on suggestions received from last year’s respondents, this year’s study also looked at diversity – a subject of considerable interest among clients who want to understand the industry’s sentiment about related initiatives. The report noted that diversity shouldn’t be a tick-box exercise, but a “business imperative.” Three-quarters of respondents agreed that a firm with a diverse management team will typically arrive at better business decisions.

“The [overall] findings [in this report] are exceptionally relevant to wealth management [firms] which in most cases are more boutique in size and don’t carry with them the branding benefit of the larger asset management firms,” Kathy Freeman Godfrey, chief executive, told Family Wealth Report.

“These firms [wealth managers] have been experiencing growth since 2010 with a strong market and assets have been increasing as a byproduct,” Godfrey said. “With the tumultuousness of today's market, firms are finding it necessary to redefine their value propositions among their clients, to solidify their client experiences at a deeper level and to broaden their investment expertise. This may require additional talent – we’re having plenty of conversations around the need for leadership in the wealth and MFO space, since December when the rocky markets began, by firms who are feeling like they need some new dimensions to their leadership team to better sustain their growth.”