Wealth Management: Overcoming growth challenges in a difficult market
Wealth management has always been an all-weather business, seen as the great counterbalance to the highly cyclical nature of investment banking. AuM provided predictable revenues and for private banks there was always a stream of clients keen to borrow as rates stayed at historical lows.
Leaders and entrepreneurs in wealth management are facing some challenges currently that they haven’t seen for a number of years, or in some cases in their whole working lives. Clients are staying in cash, the top line isn’t growing, but inflation is hitting their business from all angles as supplier costs, staff costs, and taxes all reduce net profits. Sitting still and riding it doesn’t come naturally to many leaders, and anyway firms which aren’t owner managed have shareholders who demand growth.
The usual route is to hire individuals or teams with books, and whilst this can be highly successful, candidate confidence falls in down markets and many advisers don’t like leaving their clients when markets are poor. It’s also a bit of a lottery and for most firms the right candidate can appear tomorrow or in six months – they simply don’t know. Firms often have capacity constraints too. They have a fabulous paraplanner who decides to leave and go months and months without replacing them. What too about the adviser, or banker, or investment manager, who brings some clients and then stops gathering AuM once their network is exhausted – then what?
Costs have a habit of creeping up too, but many firms look around and can’t see where to cut. If they lost a colleague how would they cope? At the same time, we see enormous salary variations for the same role and firms often have no idea if they’re over or underpaying for talent. Many leaders built their careers in an environment where people equalled growth, and to an extent it’s true, but a room full of staff and no leads doesn’t help anyone. It’s better for morale that everyone is busy.
Even in challenging times, someone in a market is growing their business. Typically, they have their finger on the pulse of what’s going on in the industry and where it’s going, and they’ve often allocated resources correctly. They understand the key metrics of their business and growth, they have an ongoing talent attraction plan, a well-developed employee value proposition, they have a marketing strategy rather than waiting on ad hoc referrals. We’d also advise working with a mentor who can bring new ideas. It is no doubt a more challenging time for wealth managers, but steps can be taken for planned growth.
Don’t hesitate to contact us if you’d like to discuss anything further, but if this article has been useful, you may also enjoy this article on why the right recruitment partner really matters.
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. Fram has one of the leading Wealth Management recruitment Practices in the UK.
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 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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