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WEALTH & ASSET MANAGEMENT MARKET COMMENTARY, Q1 2016

• Article by BRUIN Financial

WEALTH & ASSET MANAGEMENT MARKET COMMENTARY, Q1 2016

The start of a new year normally brings with it fresh budgets and hiring pipelines, however this year those have been somewhat stalled due to the uncertain market conditions that we all face at the moment. That said, volumes of recruitment have remained steady, with mainly replacement hiring ongoing. As a general rule, it has been positive to see that our larger Asset Management clients have increased their hiring with many upskilling functions that they had shed people from at the tail end of last year. This is definitely an improvement on last year when the larger houses were much more stringent with their Q1 hires.

Despite an unpredictable market, we remain positive as hiring volumes are up on Q1 of 2015 and clients are increasingly speaking of recruiting new talent to bring in fresh and innovative strategic business ideas to put them ahead of their competitors in this competitive market. External hiring remains challenging due to clients’ inflexibility at looking for candidates with transferable skills, instead they still wish to see like-for-like experience and are still not in a position to waiver these demands and look for candidates looking to a make a transitional move.

As volumes are continuing to pick up at a faster rate, we very much look forward to seeing what Q2 brings in 2016.

Role Profiles:
A surprising development for the first quarter of 2016, has been the number of Investment positions that have come to market. The team have worked on a number of Equity Analyst, Multi asset and Fixed Income research roles. Candidates have had to be CFA qualified or part qualified and due to the nature of the roles, clients have looked at both Banking and Asset Management candidates for these roles.

As clients look to retain assets under management, focus remains on retaining clients and as such, we have continued to work on a number of relationship focussed roles, either relationship management or support roles. These positions continue to be hard to fill as clients insist on prior institutional client facing experience and continue to have a bias towards candidates who are strong technically within Fixed Income. Alongside relationship based positions, we have also seen a number of technical Product Specialist roles, these positions are always well received in the market however, clients have wanted strong Fixed Income experience and the CFA.

Finally, alongside client support positions, we continue to see the demand for client reporting and performance based positions. For performance roles, clients have wanted strong fixed income experience and manual attribution experience. The challenge with recruiting for these positions are that good fixed income candidates who perhaps have a few years experience, are being looked at favourably for fund managers assistant positions, research roles and also Junior Product Specialist positions, so finding candidates willing to move for a like for like role has been challenging. Where clients have a clear succession path (usually into front office), candidates tend to be more interested in those positions.

Product development and product management positions have remained a focus area of recruitment for the beginning of the year, the biggest difference to Q1 2015 is that candidates need to have end to end product development experience which is harder to find from some of the larger asset managers, where teams are specialised by function. Candidates from smaller/boutique asset managers where there are smaller teams, have tended to be more appealing to clients as they are used to running with multiple projects at any one time and also have the diverse end to end experience that clients are looking for.

The biggest surprise for Q1 2016 has been the salaries offered to candidates. On average, candidates have received a 15-20% increase on base, in some instances at the beginning of the year, this was to encourage candidates to move prior to receiving their bonuses, in others it was to correct where candidates were below market rate. At the more junior end of the market and for relationship management/support roles, some clients offered a sign on bonus which was surprising in order to attract top talent to hard to fill roles and in order to negate the possibility of a buy back situation.

Predictions: 
We expect the second quarter to be busier than quarter 1 although there always remains some uncertainty into exact volumes of hiring due to Brexit and the slowdown in China, however as Asset Managers recruitment tends to remain relatively stable throughout market turmoil we do expect more roles to come to market over the next 3 months. However post the EU Referendum decision, clients are predicting recruitment will pick up more as some clients have put early hiring on hold until this time.