Wealth management is one area of the financial services industry that is seeing more recruiting than layoffs. In fact, according to Dow Jones Newswires, “Companies including Morgan Stanley (MS) and UBS AG (UBS) are posting weeks in which they are attracting large numbers of financial advisor teams. Moreover, some of these new hires manage money for the richest of the rich.”
The recruiting surge, Dow Jones reports, is due to several factors, including industry consolidation, plummeting company stock prices (which reduces the incentive to stay at a firm), big compensation deals for advisors who switch firms, and firms’ eagerness to add instant revenue-generating professionals. In addition, “wealth management units have continued to be profitable, unlike many other areas at Wall Street firms… In many cases, firms are hiring brokers out of necessity to replace ones who have left.”
Where’s the appeal? Wealth management “bears less risk and offers more reward as companies can add professionals with books of business and thereby gain both assets under management and revenue from these hires. Plus, wealthy clients still need advice from brokers, even – especially – in a down market.”
“I think what you’re seeing is a recognition among banks that the revenue streams generated by private banking are important and are likely to be increasingly important,” says John Benson, founder and chief executive of eFinancialCareers, a career Web site network and unit of Dice Holdings Inc. (DHX).
“This movement is somewhat unusual,” adds James Tracy, executive vice president and director of Citigroup’s global wealth management. “Not only in the activity, but in the numbers.”