The landscape for executive search in the Financial Services sector is markedly changed as we emerge from the global recession. Asset & Wealth Management, Consumer & Commercial Banking, Insurance, Real Estate, Investment Banking, Capital Markets and Alternative Investments each face their own business challenges and opportunities, which in turn will impact executive search and job creation in the sector. Read on to learn about the key changes in the financial services sector and how this affects your executive career.
The Altered Landscape for Executive Search in the Financial Services Sector
In this tele-seminar, the panelists discussed how the sector has restructured, the outlook for further changes and growth, the likelihood of executive leadership changes and talent shortages, and the impact of globalization.
• Peter Felix - President, Association of Executive Search Consultants (AESC)
• Leslie Gordon - Global Sector Leader and Leader of Investment Banking, Korn/Ferry International, New York
• Paul Heller – Partner and Co-Head of Financial Services, The Caldwell Partners, New York
• Aidan Kennedy - Partner, CTPartners, London
The recent recession affected executive search across all sectors, but financial services was the most seriously distressed area. Statistics from the Association of Executive Search Consultants (AESC), who own and operate BlueSteps, show a 41% drop in searches started within this sector in Quarter 1 2009 compared to Quarter 1 2008. Activity is now returning to pre-recession levels, with Quarter 1 2010 seeing an increase of 39% in financial services searches started, compared to Quarter 1 2009.
Moderator Peter Felix asked the panelists to discuss whether the new altered landscape means that we are now ‘back to the future’. Paul Heller of The Caldwell Partners commented “The advent of the credit crisis and restructuring seen in financial services has really resulted in the sell side going back to basics in terms of it’s revenue model and in terms of the way it focuses on business growth….what we see going forward is firms going back to the old way they made money, having their initiatives focus more on advising, underwriting and distributing securities. We’re seeing the boutiques and mid-cap firms grow, and we’re seeing talent spread across different size firms.” Paul concluded that he expects Wall St to move back in the direction it was prior to the early 90’s.
With the fragmentation noted by Paul, Mr Felix suggested that there may now be more boutiques and other smaller organizations in the market. Leslie Gordon of Korn/Ferry agreed, “I think on the investment banking side, you’re definitely seeing a proliferation of boutiques. You have new firms that have formed as a result of the changes going on.” She explained that these firms have seen significant successes already, but cautioned “What you are seeing on the investment banking side is probably an over-extension of activity in the world of boutiques. I think some of the boutiques that have formed will find themselves without scale and will ultimately be reabsorbed into bigger boutiques or even bigger firms, but there is a permanent expansion of platforms covering the advisory side of the world.”
Mr Felix asked Aidan Kennedy of CTPartners to offer a European viewpoint of the new landscape, and he echoed Leslie’s earlier suggestions. “We’re seeing a similar level of proliferation on the advisory side - I would argue that that’s pretty much done at this point, certainly from a UK context and largely from a broader European context also.” He explained that the vast overspecialization in broader investment banking that was seen in the latter part of the 90’s and early part of this decade was unsustainable, with bankers that are able to have a broad conversation with clients now heavily in demand. “In some ways, that’s exactly what a banker looked like back in 1990, 1991 here in the UK, so to that extent, we have returned to some aspects of an old style model, but we shouldn’t over play it.”
BlueSteps members can access a full review of the tele-seminar within the BlueSteps Career Channel, and discover the panelist’s expert opinions on the war for talent, where demand within the sector lies, the effect of new regulations and globalization, and which companies are the top players within the sector.
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