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Market Overviews

SALES & MARKETING MARKET COMMENTARY, Q2 2016

• Article by BRUIN Financial

SALES & MARKETING MARKET COMMENTARY, Q2 2016

MARKET OVERVIEW

The story that has dominated the Q2 period has been the referendum and the debate whether Britain would prosper by remaining or leaving the EU. Due to this ongoing discussion, the knock-on effect on recruitment has been evident, with job vacancies significantly dropping compared to the same period last year.

There are some companies that did not believe that the vote to leave was a likely outcome and as such have not prepared an alternative approach in the case of a Brexit vote; however other firms have been concentrating more on contingency plans and strategies to follow in the event of a Leave vote, with nearly half of the 62 European-domiciled funds cutting their exposure to UK equities in the past 12 months. After being announced that this was indeed the direction that the country was headed in, we will be able to see how these plans unfold and how thorough they are.

However one area that has experienced a more positive 12 months has been the FinTech industry. China has been leading the way with the amount of online investors rising substantially from 5% in 2012 to over 50% this year, earmarking technology to play a larger part of future investment strategies.

Firms such as Blockchain, the technology behind the digital currency Bitcoin, have been growing in size and reputation, leading to 42% of asset management professionals thinking that the company will have a significant impact on the fund industry. Due to the recent (under) performance and unclear future of traditional Investment Management houses, this will be an interesting area to monitor over the course of the year and beyond.

Another index that can depict the struggling market over the past few months is the stalling growth of private start up companies with over $1bil in value, aptly named Unicorns. These firms have suffered alongside those on the buy and sell-side seeing growth shrink from a new Unicorn being established once every 1.7 months to every 2.5 months over the past year. The instability of recent times seems to have venture capitalists less inclined to invest their money in high-risk ventures such as these.

Hedge funds have also had a difficult quarter, exacerbated by the referendum outcome. Since 2008, assets have fallen by two-thirds, sitting at $3bil across 17 funds. In a market where investors are more impatient and less inclined to invest their money into a low-return environment, many hedge funds have been “unable to generate the same levels of returns as they did historically” (Yogi Dewan – CEO of Hassium, a wealth management boutique). However there have been some companies that have benefitted from betting that the UK would leave the EU, providing some buoyancy to the hedge fund market.

ROLE PROFILES

Throughout the second quarter we’ve seen a high demand for PR candidates across all levels. In light of markets downsizing, we have experienced an increase in PR teams for agency and in-house PR candidates.

The requirements for these candidates have been varied with some firms looking to grow their UK media relations function and others focusing on the EMEA region. The demand for these candidates comes at a crucial time with the build-up towards the referendum which ultimately has an effect on media related activities.

Another specialism that has shown high demand over the past quarter has been Content Marketing. This comes as no surprise following on from last quarters report on the emergence of the new hybrid roles. The characteristics of these roles vary depending on the client’s strategy and whether the role weighs more towards pure content or digital.

The digital element has been consistent throughout the past year; we have seen that larger asset managers seek candidates with a strong editorial mind-set who can execute content to a range of audiences via various social media channels. It seems certain that these roles will play a vital part in the acquisition of new clients through digital networks.

There has been a marked rise in the number of marketing roles that focus on marketing direct to the consumer (D2C). D2C marketing strategies reduce the reliance on intermediaries and can give fund marketers access to a more targeted specific market sector (e.g. demographic marketing designed to focus on the millennial market). Consumer trends, preferences and patterns are being analysed more closely than ever. The collated data is being used to influence future campaigns to affect customer alignment. We have seen an increase in the popularity of analytics roles with a marketing focus, people who are able to interpret and produce conclusions out of big data sets which can then affect decisions.

Quite notably, we have experienced the release of several part-time opportunities both on a permanent and temporary basis. With the continuous conversations concerning women in finance and diversity, it seems that the flexible working balance has become more common in the Investment Management industry. Notably, Marketing Manager and Investment Writer positions were two of the few roles that allowed candidates to work on flexible basis. Although these positions gained some attraction, it was clear that the interest was bias to female candidates as opposed to male candidates.

PREDICTIONS

The public’s vote for Britain to leave the EU has now been cast and the formal process for Britain to leave the union getting underway slowly. Historically in times of market volatility and uncertainty discretionary spend at financial institutions is cut thus widespread recruitment is reduced.

Looking to the future the investor landscape is forecast to change significantly over the coming months and years. Within fund marketing in particular a large emphasis will thus be placed on remaining innovative within the changing investor landscape. More specifically this refers to two key elements;

Understanding who your target market is – The investor landscape has been, and is still undergoing a seismic shift both is terms of type of investor and the way in which these investors invest. This change has been impacted by a number of factors however primarily in the emergence of Millennials. Millennials are by nature both information hungry and heavily focused on ease of service. These issues are in turn causing reactive investment management firms to look at alternative methods of attracting their investment. Most noticeably slowly transitioning from the current IFA/Intermediary model to looking at accessing consumers directly thought Robo-advisors.

Understanding how to market to your target market -In the age of big data, analytics and research, companies are placing a greater emphasis on the interpretation of this statistical information and its relevance to influence decisions made by marketers.

An area we believe will be subject to significant change in the coming months and years with be around workforce structuring and planning looking toward the future of work. Working in a market where the consumer landscape is changing faster than ever the importance of workforces being adaptable and flexible is paramount. Flexible workforces have the capability to react to changes within the market quickly and most effectively. Not only adaptability but also speed of deployment will have a significant effect. From a human capital perspective the emergence of roles within distribution that focus on internal business analysis has been notable. Investment Management firms have been developing a capability that is consistently assessing the current strategic direction (market focus/penetration) of the department feeding back accordingly.

More generally experts are predicting that following the separation of the UK from the EU there will be a potential brain drain on talent from the UK. This will be lead initially by an exodus of mainland European natives, and followed by the poaching of top UK talent by the French, German and (possibly) Irish, European finance centres. We expect that this will be countered in the interim by a sharp rise in the market for contractors and consultants to take the place of permanent employees. The strategic use of contractors with specialist skill sets will become commonplace, a trend more commonly referred to as the ‘gig economy’.

Finally it is difficult to plan for future work forces without taking in to account the data around teams. We are finding more clients taking heed of this data and making decisions based around team output data. Primarily this data is in regard to demographic metrics (such as gender, race, age etc.) and the correlation that a demographically diverse team has on output and success. This is something that the investment management industry is beginning to take in to account when recruiting.