Insights

Investment & Middle Office

WEALTH & ASSET MANAGEMENT MARKET COMMENTARY, Q4 2017

• Article by BRUIN Financial

WEALTH & ASSET MANAGEMENT MARKET COMMENTARY, Q4 2017

MARKET OVERVIEW

The final quarter of 2017 has proven to be very energetic in comparison to previous years. We have seen a steady flow of new roles being released right up to the New Year with a surge of roles being released in the final weeks of December, usually a month renowned for being quiet within the recruitment industry

Over this quarter, we have seen many variables affecting the market. The biggest of which is Brexit.

Many Asset Managers and banks have announced they will be outsourcing some functions to different EU cities such as Paris, Krakow, Frankfurt, Dublin and Luxembourg due to the uncertainty associated with Brexit, although some firms have aired opinions to stay due to the high skilled labour force and infrastructure which is located in London. We have also continued to see a demand for language skills being desired from a range of our clients in a range of different positions but mainly client facing roles.

During this final quarter we have seen an escalation in the popularity of crypto currencies such as Bitcoin, which saw share prices rise to all-time highs of close to £15,000 per coin, sparking interest within the market to start trading within the Crypto Currency space and also starting talks of adding regulation to these digital currencies to reduce volatility and risk to enable trading to be viable for institutional investors.

The MIFI II regulations, due to be implemented in January, has also given way to interesting events within the market. We have seen Asset Managers tending to look for Equity Research generalists rather than sector specific Equity Research candidates to mitigate some of the costs.

This is due to the fact that as from January, MIFID II regulations will require firms to rethink current research strategies including bringing research in house or paying for their own research as they are now unable to combine the cost of Research with Trading. Recently some of the larger Asset Management firms have announced that they will be taking on this cost rather than pushing it onto investors, increasing their competitive advantage in comparison to much smaller firms where this has caused concern.

 

Role Profiles

Middle office:

Over the course of the final quarter of 2017 we have seen a continued strong demand for client services. Institutional client services have remained a focal point for our desk with businesses struggling to find relevant candidates with the institutional

experience, which has resulted in them looking at strong client service candidates but with a different client focus, i.e. private clients.

We have also seen an increase in the need for candidates with retail client and private client service experience with multiple businesses expanding functions within this area; we have been working on a number of team builds requiring a constant supply of candidates within this field.

Another key area for our recruitment efforts this quarter has been Client Reporting. We have seen a sharp spike in the demand for Client Reporting experience from a multitude of our clients in late November and the December period ranging from junior positions to team leader positions. Strong candidates with Client Reporting experience who wish to progress in this area are in short supply as they tend to want to look at more investment aligned roles, so clients have been open to looking at strong operations candidates who have good technical and operational knowledge and in depth understanding of the trading lifecycle.

Front Office:

Interestingly we have seen a high demand for Product specialists within Q4, in particular within the multi asset and equites area which shows a shift from the fixed income space we have seen in previous months. We have also seen a trend for Product specialists that speak multiple European languages likely to aid operating in a post Brexit market.

We have noted some interesting trends with Fund Manager Assistant roles, notably with the need for strong coding skills with the use of Mat Lab and Python.

We have also seen a variation of Research roles, notably within the Manager Research space, with roles ranging to junior roles to the more senior positions. These positions have arisen in both consulting firms as well as within asset management houses.

 

Predictions

Moving into Q1, we predict that with the introduction of MIFID II we will see a much higher demand for research roles within the industry because of the change in the way that research is paid for and disclosed, potentially leading to more research taking place in house.

Bonus season is upon us and this provides certain trends as we move into Q1. We tend to see that candidates want to wait to receive their bonuses

before moving positions. We therefore expect to see a high number of candidates coming to market during Q1 and after bonus announcements. This is particularly relevant with more senior positions or with roles which have a higher bonus potential.

We anticipate seeing further developments with Brexit and the ramifications of it including the announcement of further offshoring and also the need for candidates that are bilingual to mitigate negative effects of working more collaboratively with the bloc after Brexit.

 

BRUIN NEWS

BRUIN recently held an event in partnership with The 30% Club and Women Ahead, a  diversity mentoring specialist at M&G’s offices. This event was held in November to explore the innovative strategies being used by firms to attract and retain women in City and address the challenge of gender imbalance within financial services, with over 100 financial services professionals in attendance. This event complemented another recent event held at M&G’s offices focusing on Women Returners for the Diversity Project, for which BRUIN is represented on the Steering Committee.

In November we hosted a Brexit breakfast seminar with guest speaker Tara Doyle – Partner from Matheson, to discuss the challenges that Asset Managers would face with a potential hard Brexit. We also talked about the challenges and steps needed to establish an EU ManCo in Dublin or elsewhere. It was interesting to see how a lot of managers had already kicked off projects to set up new fund structures as well as domiciling funds in new jurisdictions and start conversations about re-location or part re-location of front office teams. Please get in touch if you would like to hear about further events on this theme.