Without doubt 2009 will pass into history of financial services as one when the cold wind of change left a wide trail of frostbite in its wake.
The universal theme is cost reduction, with the bean counters working their abacuses hard to get cost numbers down. This has resulted in significant headcount reductions through the industry, with more slated to come later in the year.
The first wave of redundancies resulted from cutbacks to back office services and client service personnel.
Wealth management companies set on avoiding redundancies designed redeployment programs to ensure they wouldn’t have to dismiss employees en masse into a sluggish employment market.
Expectations are that unemployment in financial services will rise over the course of the year and this will present a growing challenge for those made redundant to find appropriate employment.
Many wealth management companies with adviser recruitment programs have had to shelve them, at least in the short to medium term. However, there is a silver lining: there are companies that are looking to grow head count in wealth management, albeit on a selective basis.
These companies have strong balance sheets and cashflow, and are willing to embark on recruitment programs in a market that is much more favorable to them than twelve months ago.
While a number of large institutionally-owned businesses remain cautious about embarking on recruitment programs, there are a number of smaller companies including small privately owned businesses that are quietly going about bringing on board new advisers either on an individual basis or in teams.
Additionally, large institutions who have been successful in drawing in practices that have been either aligned to a competitor or independent, and are now seeking a large parent backer, continue to be active in the market place using their own internal recruitment resources, as well as professional recruiters.
There is a pervasive fallacy in the market that there is a large gene pool of displaced adviser talent, and that those looking to recruit advisers will be overwhelmed with choice. If you start from this perspective then you will probably be sadly disappointed.
While there have been salaried advisers made redundant, and some of those are high quality candidates, there is little doubt that they will not be sitting on their hands for too long, as there are advice businesses active in the market seeking to recruit them.
The key to successfully recruiting advisers going forward is to realise that you have to act decisively to harness appropriate talent as competitors will not take a back seat if they identify your candidate as a good fit for their business.
In this market, once you have identified the candidate you want to employ, you must take action or that person will be snapped up by one of your competitors, and you will be left scratching your head in front of the whiteboard, wondering what went wrong, and having to start all over again.
Peter Dawson is executive director of Financial Recruitment Group
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