Market update – Aug 21
I’ve been remiss, I haven’t written my monthly update, and in short it's because I’ve been too busy. The financial services industry was “lucky” with regards to COVID. People could work safely from home and, after some initial disruption, the industry sailed along avoiding any downturn. Markets were up, M&A activity has been frenzied, and the summer was unusually busy. I seemed to get a lot of out of office replies, but somehow things kept on moving. However, many firms were starting to suffer from a drop off in productivity with fully remote working. Leaders were actually worried about their teams, because colleagues had worked so hard during the pandemic that they were beginning to struggle. The productivity gains of working from home also dropped and many felt they lived at the office. So the opening of offices has come not a moment too soon, and I hope readers of this update managed to take some time off and recharge over the summer.
For the most part, most firms have now re-opened their offices favouring a hybrid working model, and in my opinion this will really help drive the economy forwards. It’s not just about helping city centre businesses recover, but being together occasionally helps with problem solving, building culture, variety and gives us laughter - many essential ingredients for a fulfilled life. I think there are huge wins to be had if we can make it work. I accept there will be short term challenges, but if we get it right it could improve productivity, diversity, and supercharge the economy. I wrote this article for Wealth Tribune on the subject. This transition will take patience and goodwill from both employers and employees, and I hope all parties work together to make this happen. We get more done when we collaborate, the world is a better place when people focus on being helpful and understanding.
I must admit to being surprised with the NI increase. Of course a pandemic where an economy is closed would change any budget. However, I struggle with this decision on three levels. Firstly, there are other ways to raise tax revenue. This will hurt the low paid, recovering small businesses, front line workers, and it’s a tax on employing people - paid at the same rate by industries who benefitted from lockdowns and by struggling travel and hospitality businesses. I am also not keen on manifesto promises being broken. Every aspiring PM must assume that they will deal with events which will put them off course. I also think it could be a drag on the economy after the largest recession in 300 years. Indeed, the head of the CBI said on the subject “I am deeply worried the Government thinks that taxing business – perhaps more politically palatable – is without consequence to growth. It’s not.” I don’t envy any political leader at the moment, it’s a tough job, but changing your mind can sometimes be a sign of strength.
We are always asked where are we busy? The answer is everywhere. Our four main practices: Investment Banking & Private Equity, Sales & Marketing, Wealth & Asset Management, and Infrastructure (finance, operations, and compliance) are all busy. Traditional firms and fintechs are all busy and I think it will be the same until the end of 2022.
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We’re also trying to help firms navigate through this busy period, and our latest contribution was to interview leading Employment Lawyer, Caroline Doran Millet. You can see the interview here. Caroline is at the forefront of HR matters and she kindly gives some practical advice on what we all can do to follow best practice.
Thank you to everyone who has worked with us throughout this difficult, and now busy, time. We’re always keen to meet new people and firms, and so do reach out if we can be of assistance.
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