Recruitment in Wealth Management Remains Intense – Study

Nick Parmee

5 December 2006

The recruiting environment among senior professionals in the asset and wealth management industries was particularly strong in 2006, with brisk turnover among all functions as well as rising compensation levels, particularly for proven producers, according to a report by global executive search and assessment firm Russell Reynolds. In fact, the report asserts, the intensity of the competition for investment professionals , has forced investment firms to look beyond traditional talent pools. The tenth annual Asset and Wealth Management Recruiting Trends Report is a qualitative and anecdotal study prepared by the global partners of Russell Reynolds Associates’ asset and wealth management practice. Jeff Garrity, managing director and head of the firm’s Americas practice, said that traditional and alternative investment houses are evolving and adopting each other’s product and investment strategies, converging and blurring the once clear lines that separated the two. “The resulting demand for broad-based professionals who can straddle differing investment strategies has never been greater, and the war for talent has never been more contentious. As a result, many asset and wealth managers have begun to widen their scope, seeking more available, affordable talent from outside traditional talent pools in analogous industries. It’s a risky, but necessary strategy, likely to continue in 2007.” The report identifies ten factors that have affected the market, including: -Strong performance by property assets bringing rising compensation, with bonus pools up at least 15 per cent for teams managing core strategies and up more than 20 per cent for those managing opportunistic strategies. -A new generation of sophisticated high net worth clients from US, European and emerging markets demanding trusted advisors fluent in all aspects of stocks, bonds and alternative markets, who can also handle tax issues, estate planning and liquidity needs. As a result, many wealth managers are seeking more affordable candidates in like industries . -The willingness of the aging baby boomer generation to pay a premium for expertise fuelled an increase in post-retirement advice. -Competition remained intense for the most experienced risk managers capable of anticipating the changing regulatory and compliance landscape. The report also provides an overview of varying global realities and regional differences; specifically, it looks at US, Canada, Mexico, the UK, France, Germany, the Netherlands, Poland, Australia, China and Hong Kong, India, Japan and Singapore.