(December-2004) The complete package: salaries on the move

29 September 2005

| By External |

Salaries in the financial services sector have steadily increased over the last 12 months and as the industry approaches the Christmas break, greatest areas of job growth stand out according to Laughlin executive chair, Sally Laughlin.

“In the retail sector wealth management is the big winner with the platform market and practice development being two areas of great growth,” Laughlin said.

She said people with product experience, IT experience, transition and management experience were in significant demand.

“The industry is particularly interested in people with genuine practice management skills, in the past it was just a title, they were just sales-people responsible for making sure plenty of product gets sold. Right now our clients want a high level of analysis and consultation, practice managers have gone from being a relationship manager to being a business coach, able to implement a business model, and implement process systems,” Laughlin said.

“The development of a really sophisticated client management technology and how to do it is the latest trend. It’s about looking at how the business can be more efficient and effective, what are the blocks undermining growth? Is it something as simple as the databases being out of date?

“It’s about looking at business strategies to enhance their effectiveness,” she said.

Laughlin said that the disastrous market falls which followed the September 11 bombing of the World Trade Centre coupled with the IT crash shoved the whole sector into a slump and took the heat out of the market.

“Everybody became crazy about property but now financial services are heating up again, demand for people has increased and the market is very busy,” she said.

“The big issue for superannuation at the moment is everybody is looking at how they can cross-sell wealth management — clients want to be serviced holistically. Clients don’t simply want their super managed any more, they want a provider who can organise home loans, life insurance and a full financial planning service,” Laughlin said.

“Our clients want end to end service, so if you look at the industry funds they’re creating alliances with financial planning groups, cross- selling products without undermining their own core business. Whoever owns the corporate super client will get their financial planning dollars.”

Laughlin said there were two distinct areas of employment and salary growth.

“The hedge funds are hiring, they’re looking for experienced traders with a good track record because at the moment, clearly the fund managers with the best track record and returns will win the mandate,” she said. “We’re seeing a move towards looking at boutique managers, especially international boutique managers.

“Small cap funds are outperforming the larger ones so they’re getting selected. It’s a combination of factors — the small cap sector is offering higher returns but it’s also more volatile and there’s more risk associated with that.

“At the same time, the fund managers running these small boutiques have more of an equity stake so there’s a higher percentage who would have a greater incentive to perform. They’re going to get a bigger piece of the upside if they succeed,” Laughlin said.

“If you look at the recent rankings, the small cap or micro cap funds are outperforming everything else and presumably there’s a correlation between mandates and funds flow but they don’t necessarily have the strong retail distribution arms,” she said.

“Small cap funds are the place to be because they’re at the top of the league table in terms of outperforming. For example, some of the fixed interest/credit funds are doing fairly well because it’s manager specific.

“So in a nutshell, in the front-office we’re seeing big demand for chief investment officers, portfolio managers, traders, researchers and quants,” Laughlin said. “In the back office there’s demand across the board for high performers in administration.”