Trends in Asset Management & Investment Banking

As RSR Partners celebrates its 25th birthday, the Financial Services team wanted to share news and various recruiting trends we are seeing in the markets we cover. Our Financial Services capabilities have continued to grow, with the 2017 acquisition of Higdon Partners, the 2018 opening of our Boston office, and the launch of the firm’s Investment Technology and Innovation practice. Below is a summary of some insights we have gained during the course of our recent work. We would be delighted to discuss them in greater depth or arrange a visit with you to explore the specific issues or needs of your organization. See below for more information about our team.

ENDOWMENTS & FOUNDATIONS (E&F)
1. Leadership – Investment Committees are asking to see a wider range of investment experiences, including direct capital markets exposure, as they seek the impact CIO of the future.
2. Direct Investors – E&Fs have increased their emphasis on hiring people with direct or co-investing experience, particularly for senior private market positions.
3. Operations – Organizations are in professional upgrade mode – from technology-savvy COOs to operational due diligence and performance reporting professionals – to enhance data management and provide better integration with investment teams.

MUTUAL FUND BOARDS
1. Diversity – Shifting demographics along with public and shareholder pressure are pushing mutual fund boards to hire more minorities and women with the goal of building a more inclusive board and to bring diversity of thought into the boardroom. Click here to read more about our thoughts on this topic.
2. Targeted Expertise – Mandatory retirements are creating a dynamic recruiting environment and a continual need for qualified financial experts and investment talent.
3. Onboarding – As boards think strategically about more seamless transitions, new trustees are being recruited earlier, are provided broader educational programs, and go through formal orientations or “consulting” periods to assist with on-boarding.

WEALTH MANAGEMENT
1. New Entrants – Significant transition is underway with the emergence of new players backed by private equity firms.
2. M&A Activity – We have seen a flurry of M&A activity as scale presents an opportunity to expand product mix and deepen the bench for management succession in a market where the demand for proven talent remains fierce.
3. Technology – New entrants are banking on sophisticated technology platforms to advance client service models in order to attract new assets, particularly from millennials.

INVESTMENT BANKING & CAPITAL MARKETS
1. Compensation – Fees to the Street are off by 20% YTD – should be some headwinds for 2018-2019 compensation.
2. M&A Market – (a) Middle Market activities continue to dominate the M&A landscape. (b) Geopolitical/Cross-border issues continue and could have a lasting effect on M&A.
3. Rising Rate Environment – Good for Retail Banking but perhaps bad for corporate borrowing costs?

FAMILY OFFICES
1. The Place To Be – Creative compensation structures, faster decision making, and captive capital have made these once stodgy platforms attractive to top performers.
2. ESG – Despite the lack of clear performance data, family offices are leading the charge on the sustainable investing front; just one of the dynamics we see with the generational transfer of family leadership.
3. NextGen – Family office leaders are making adjustments to be sure their offices remain relevant to the millennial generation. Click to read our white paper.

DISTRIBUTION
1. Compensation – Trends indicate a strong bias towards discretionary bonus structures in both the institutional and intermediary space to better align interests.
2. Investment Knowledge – Firms are looking for sales professionals with deep content and product knowledge who are able to deliver CFA-level understanding of the investment process.
3. Client Coverage –The lines between various distribution channels are becoming more blurred as intermediaries become more institutionalized.

INSURANCE
1. Insurtech – Key differentiators for the future will be data science, artificial intelligence, behavioral economics and an enhanced client experience, creating strong demand for tech-savvy leaders who are often migrating from other industry sectors.
2. Outsourcing – Tremendous cost structure pressures are forcing leadership to conserve resources, driving the trend toward outsourcing and/or relocation of back-office capabilities to more cost-effective locations.
3. Diversity – The industry continues to sorely lack diversity at all levels. Innovative industry leaders are beginning to develop a plan for building a pipeline of diverse talent and organizations must show a commitment from the top down.

To contact our Financial Services team, please click here.

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