2018 saw heightened hiring activity in the global wealth management industry as compared to other sectors within the banking and financial services domain – especially in buy-side roles. The M&A boom within the wealth management industry, sharpened focus on digitization, and the ever tightening regulatory landscape were the principal drivers. Besides the creation of new job roles in asset management, salaries are also on an upswing. In the U.K, for instance, job movers can expect an average of 10%-15% raise when switching jobs within the industry.
As wealth management firms face intensifying competition from both digital portfolio management platforms and non-financial players like Google, here are the top three hiring trends gaining momentum:
#1 The new talent shortage is real:
More than 35% of financial advisors will retire in the next 10 years. According to the Certified Financial Planners’ (CFP) Board, only a quarter of today’s advisor population is under the age of 40, and of this, a mere 10% are under 35. So where will the wealth management industry find its next generation of advisors? That’s a tough one to answer, even for CFOs. 70% of CFOs in PwC’s recent global survey revealed that the limited availability of skills is a bigger threat to the industry growth than the disruptive shifts in consumer spending or behavior, and intensifying competition. Yet, only 28% are changing their focus on the skills and adaptability of their people. Asian private banks are particularly hit by the shortage of qualified wealth management talent as wealth swells in Asian families and customers demand services at par with those that European or American wealth managers provide. Companies that proactively invest in training, reskilling and upskilling initiatives will be able to build considerable competitive advantage.
#2 Employee priorities are shifting:
As in other industries, millennials in the wealth management space want to work with organizations that are flexible, socially accountable, and value employees’ contributions. While asset management companies have traditionally focused more closely on pay and performance management, PwC’s survey reveals that in the next five years, 60% of top talent is expected to opt for wealth management companies whose social values are aligned with their own. The growing trend of philanthropy in wealth management or ‘impact investment’ as it is called, can be seen in Kiva – a crowd funded lending platform for refugees and the unbanked/ underbanked – that operates on a zero percent interest model. On the platform, mostly millennials give and take loans. This calls for wealth management companies to revisit their employer branding and messaging to attract millennials.
#3 Co-existence of both – human and tech experts:
That AI and ML will transform wealth management is established beyond doubt. Incremental impact, however, will be delivered when organizations use technology to augment the human connection between business and customers by removing bias, automating repetitive work, and increasing speed. For instance, Forwardlane – a cognitive platform that is deployed in a wealth management firm’s infrastructure helps wealth managers aggregate, analyze, and organize the infinite data they draw on to make intelligent recommendations. The relationship between wealth managers and technology has evolved into a symbiotic one – both benefit from each other and aren’t even half as good without.
Wanted Urgently: Wealth Managers
As Indians’ wealth compounds at 12-14% per annum, wealth management has emerged as the most in demand profession within the financial services sector. Indian wealth managers earn considerably more i.e. 20-25% of revenue generated than their global counterparts who only keep 12-18% of the revenue they generate. Still, talent is in short supply and currently, just 8-9% of private bankers in India are managing more than Rs.1000 crores in assets. Unsurprisingly, hiring is on an upswing as prominent wealth management firms such as IIFL, Kotak, Edelweiss, Aditya Birla and others beef up their headcount aggressively. The era of ‘WealthTech’ has truly arrived and India looks poised to capitalize on it big time.