Despite the woes of the US economy in the last few months, the constant flow of job moves in the wealth management sector gives every impression that this financial sector is busy – but what do headhunters expect in the near future?

Despite the woes of the US economy in the last few months, the constant flow of job moves in the wealth management sector gives every impression that this financial sector is busy – but what do headhunters expect in the near future?

There has been a blizzard of hires at firms such as Citi Private Bank, BNY Mellon, Wilmington Trust and Atlantic Trust. August, for example, did not see much of a falling off in terms of news about moves. In fact it appeared to be far livelier than at the start of the year. This is still a big market, even though Asia is surging up in terms of growth and importance. The North American market – including Canada – accounts for 31 per cent of the total world population of high net worth individuals. There are 3.1 million such people in the region, according to the 2010 World Wealth Report from Merrill Lynch/Capgemini.

The industry is having to contend with a raft of new regulations - the impact of which is not yet clear in terms of the jobs market. The recently passed Dodd-Frank legislation curbing banks and other financial institutions contains a provision, for example, that may tighten regulatory oversight on family offices, which could lead to moves to cut costs.

There has been a recent trend of growth in positions to serve ultra high net worth clients, for example. As already mentioned, Citi Private Bank is busily recruiting, with a lot of focus on its UHNW segment; a few days ago, US Bancorp said it was rolling out a business unit to cater to such clients. So private bankers with experience in this field should be in demand.

In general, executive search firms say that wealth managers are being sought who can bring a book of business or who have the ability to squeeze more revenue and “share of wallet” out of existing clients. Although impressionistic, the general feeling is that the North American market is more about a battle over a relatively static market than one characterized by a drive to exploit an expanding one, as in Asia. If that picture holds, then this market could continue to see shakeouts with some further loss of spare capacity among weaker players.

This publication spoke to a number of executive search professionals for their views on how the market is shaping up.

Jane Swan, managing partner, global wealth management practice, at Korn/Ferry in New York:

"The job market for leadership talent is still feeling the effects of the industry consolidation and many of the major firms still have more leaders than leadership roles. However, the 'churn factor' associated with these integrations is creating some opportunities and we have also seen firms create positions specifically to attract talent that they may not have had access to before all of this dislocation."

"In the US the competition is still for market share with firms still heavily recruiting asset gatherers and broadening the product offering in an attempt to gain greater share of wallet.  The latter is driving a need for new or different talent on the products and investments side of the industry."

Swan’s colleague, Jane Marcus, senior client partner dealing in the family offices segment of Korn/Ferry, added: "A lot of talent acquisition activity is on the investment side of family offices. We expect leadership to change in the upcoming three years as a result of retirements (of CEOs and presidents) and earlier as a result of the changing needs of the family office."

Linda Mack, is founder and president of Mack International, based in Chicago.

“We’ve seen some steady activity [in the jobs market] this year; it is still a very cautious market. Any roles that produce revenues produce the most job activity,” said Mack. “Most of what we see is that people cannot afford to invest and then wait for up to five years for the return. People want more immediate returns,” she said.

 “People are looking to acquire books of business, whether another RIA, a multi-family office and so on. People are trying to find partners that will enable them to grow.”

An example of a firm acquiring business via a team of advisors was last year’s move by Pitcairn, the multi-family office business, to acquire a team from Shelterwood last February.

“There is going to be more of that kind of activity as people want critical mass to do this sort of business more profitably,” said Mack.

Mack said that one reason why there is uncertainty in the jobs market is due to the wealth management industry having to contend with potential new taxes and regulations.

In such a climate, she said, few firms are prepared to make a bold dash for growth: “The market is like tiptoeing on ice; you walk out slowly but stop as soon as you hear the slightest crack.”

There is steady work in areas such as private client law – providing advice in the ever-expanding fields of tax and regulatory advice, she said.

Mack said she has not seen much change in areas such as non-compete clauses in contracts – these remain common features in the industry. “Organisations certainly try to institutionalise relationships, so they are not vulnerable; if an advisor leaves, then clients will be less likely to go with them,” she said.

But one unambiguous theme coming through, she said, is that end-clients, having lived through the financial turmoil, want to know how wealth managers are remunerated. “Clients continue to want to know how their advisor is being compensated and to make sure that the advisor serves them in an objective and unconflicted way. With families and individuals that I talk to, they want to know that the advisor they work with is giving advice that advances their [the client’s] interests.”