There is a seismic shift occurring on Wall Street.
Thousands of Wall Street employees have been downsized due to a confluence of changes impacting the financial industry. A toxic combination of financial uncertainty, new regulations that will add cost burdens, financial regulations that will cause brokerage firms to set aside capital as opposed to utilizing it for business purposes, soft IPO and M&A markets, less retail investor interest, and a rabid anti-regulatory public sentiment.
Wall Street hiring previously focused on revenue producers such as traders and bankers.
According to a study conducted by the New York Post, risk takers and gamblers are out. Compliance Officers and Wealth Managers/Private Bankers have become the new rock stars.
According to eFinancialCareers, Compliance and Private Bankers were the hottest jobs sectors listed for the last six months with a 44 percent year-over-year gain in postings.
Job listings for prior stars with derivatives, hedge funds and commodities experience dropped approximately 50 percent in the same period.
The two bright spots stand out in an otherwise jobs bloodbath.
Investment banks such as Bank of America, Citigroup, UBS, Deutsche Bank, Credit Suisse, Goldman Sachs, Morgan Stanley, JP Morgan, Barclays have collectively cut 300,000 jobs according to Bloomberg.
Priorities are shifting on Wall Street away from hiring risk-takers towards risk managers and Compliance according to Constance Melrose, managing director at eFinancialCareers.
New rules and regulations such as Dodd-Frank have created a demand for additional Compliance, Legal, Regulatory and Audit professionals to understand, implement and manage the required changes.
Recent events such as the HSBC Anti-Money Laundering and LIBOR scandals, UBS Rogue Trader, Ponzi Schemes, Flash Crashes, and Insider Traders have caused banks, brokers, hedge funds and other financial institutions to hire Compliance and related professionals in response.
The top 1% still has substantial investable assets and seeks out experienced Wealth Managers, Private Bankers and Brokers to assist them invest their money rather than receive the paltry.001 interest rate offered at savings banks.
Their needs for hedge funds, alternative investments, structured products, manage accounts necessitate robust wealth management operations.
These divisions, with relatively modest costs are a great revenue generator for companies.
Brokers are paid handsomely to entice their loyal client base to leave with him or her and join with a competing brokerage. “The only way brokerage firms are going to grow is by increasing their assets under management. That necessitates recruiting advisers and, in some cases, paying them monster deals to join,” according to Howard Diamond, a recruiter of top adviser talent.
Diamond continued, “We continue to see a robust appetite for financial advisers, and we project 2013 to be the same.”
Ironically, while there are thousands looking for work, it is exceptionally challenging to procure talented qualified Compliance and Sales professionals with the appropriate skill sets and experience.
Posted by Steven Maimes, The Trust Advisor