Financial Services talent outlook for 2025 – Market Update Jan 25

Simon RoderickMarket updates, Research, insights & industry news

Financial Services talent outlook for 2025 - Market Update - Simon Roderick - Fram Search

Financial Services talent outlook for 2025 – Market Update Jan 25

Despite newspaper headlines, firms in the sector seem to be laying the groundwork for a promising start to the new year, which is a welcome contrast to the last couple of years of battening down the hatches.
Firstly, I’d like to wish everyone a happy and healthy New Year! I hope you managed to take some time off over Christmas. December, which is often a quieter month in recruitment, defied expectations with a notable uptick in hiring across key areas of financial services. Despite newspaper headlines, firms in the sector seem to be laying the groundwork for a promising start to the new year, which is a welcome contrast to the last couple of years of battening down the hatches.

Market Overview

Wealth management has been the standout performer in our portfolio of clients, with financial planning firms leading the charge. Many firms have worked hard on developing their teams, marketing strategies, and infrastructure, and this has been instrumental in maintaining high levels of client activity. Firms that consistently invest in these areas seem to outshine management teams who spend more time working in, rather than on, their business. Interestingly, discretionary fund managers (DFMs) haven’t seen the same momentum, highlighting the subtle differences between subsectors within wealth management.

Active asset management remains a challenging area, but there are reasons for optimism. Many firms have spent the last year recalibrating their distribution strategies, refining their product offerings, and adjusting cost bases to adapt to a more competitive environment. If the S&P falters, it could provide an opportunity for active managers to demonstrate the value of their expertise and their ability to play a key part in diversified portfolios. As we all know, the asset management industry is cyclical, and active management has been in a downturn for some time. A rebound could surprise many and I remain optimistic.

In venture capital, we’re seeing signs of a gradual recovery. Capital raising roles, both telephone-based and field BDMs, have seen renewed demand, though not at the levels of the boom years. Encouragingly, investment teams are beginning to expand again. Fram has extensive experience placing capital raisers and investment professionals in VC, and our networks remain invaluable to firms looking to grow their teams.

In asset finance, debt advisory, and mortgages, the picture is mixed. Debt advisory is seeing more focus on refinancing as higher interest rates suppress buyout activity. Asset finance has remained steady, with recent signs of improvement. The mortgage market, though subdued in the buy-to-let space, is seeing increased activity among first-time buyers, partly due to the impact of stamp duty changes. However, the UK’s rising government borrowing costs are a concern that could impact these sectors. One of our goals for 2025 is to consolidate our work in asset finance, debt advisory, and mortgages into a dedicated Debt & Capital Solutions practice. This will allow us to better serve clients in these interconnected areas and provide a more focused approach to hiring needs.

Talent Trends and Challenges

The debate over hybrid and remote working continues to evolve. JP Morgan’s reported plans to return staff to the office five days a week are starkly contrasted by the UK, where initiatives like the Worker’s Rights Bill could strengthen employees’ rights to request flexible working. The ongoing struggle to find the right balance is far from over in the UK. A good example is Land Registry staff recently voting for strike action over being asked to return three days a week. In the private sector, WPP are reported to be asking teams back to the office four days a week sparking a petition by some colleagues. The response from WPP is that many of their clients are in the office full-time and expect suppliers to also be.

Indeed, the divergence between US and UK workplace policies will be an important trend to watch in 2025. High-profile US companies such as Meta, McDonald’s, and John Deere are reported to be revisiting their DEI initiatives, while JP Morgan’s return-to-office stance suggests a potential rollback of pandemic-era flexibility. Whether these changes will influence UK firms remains to be seen, but they could mark the beginning of broader cultural shifts in the corporate world.

The benign conditions of low interest rates and relative geopolitical stability that characterised the post-GFC era are firmly behind us. Firms are now navigating an environment of constant change, with heightened geopolitical instability. To succeed, businesses need to cultivate a culture of adaptability, trial and error, and rapid response. Firms that embed this mindset into their culture will be better positioned to thrive in uncertain times.

The use of fixed-term contractors was an area of growth in 2024, and this is a trend we expect to continue in 2025. Contractors can provide vital expertise for specific projects or areas without committing to long-term costs. For SMEs in particular, contractors are highly effective for areas like marketing, where expertise in digital strategies can deliver long-term benefits. However, firms should approach this option with clear objectives and recognise that contractors may not integrate into the corporate culture in the same way as permanent hires. However, it’s a great option in the right circumstances and Fram is well-positioned to assist firms with these needs.

Engaging and retaining high performers remains a critical priority, particularly if the hiring market continues to recover. Firms with open, transparent working cultures and a clear sense of purpose tend to outperform in both retention and recruitment. In 2025, businesses will need a laser-like focus on their top performers, ensuring they remain engaged and motivated. This is especially true in sales roles, where networks and relationships are vital assets.

Now is also the time to plan your talent strategy for the year ahead. Our advice is to consider how geopolitical, macroeconomic, industry, and firm-specific factors could influence your workforce – and then plan accordingly. Proactively addressing these challenges will ensure your business remains resilient and ready to seize opportunities as they arise.

2025 looks like another year of key significance for the world. At times, it would be nice not to live in interesting times, but we can only play the hand we’re given. I wish you and your colleagues every success for the year ahead.

About Fram Search

Established in 2010, Fram Search is a specialist financial services recruitment consultancy. We focus on mid-to-senior hires in the UK and internationally.

We provide high quality contingent and retained recruitment services to boutiques and global brands. We have long established relationships, outstanding market knowledge, and access to deep talent pools. Fram takes a highly consultative approach, combining outstanding tech with a human approach. We are proud that our contingent fill rate is nearly three times the industry average and we augment our retained search methodology with rigorous psychometric testing. We take ESG seriously, we are champions of diversity and all staff have undertaken unconscious bias training. We also carbon offset.

Please contact us on 01525 864 372 / [email protected] to learn more.

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