Contents: Page 1-2: Interviews with retained executive search consultants. Page 3-4: The outlook for the financial services industry.

Transcription

1 This paper includes one-on-one interviews with leading AESC retained executive search consultants that specialize in placing senior executives within financial services, and a review of the industry outlook. Contents: Page 1-2: Interviews with retained executive search consultants. Page 3-4: The outlook for the financial services industry.

2 1 Interviews with Executive Search Consultants Executive Search Consultant Q&A Panel Jason Johnson Managing Partner Johnson Executive Search Sydney, Australia Harry O Neill Managing Partner Heidrick & Struggles Hong Kong, China Nikki Bondi Managing Partner Advantage Partners Ohio, USA BlueSteps talks to three noted experts who specialize in retained executive searches within financial services, to gain their insights into current developments within this sector, and their industry outlook. BlueSteps: What is happening in financial services right now in terms of hiring? Jason: Following the credit crunch we have seen a terrific resurgence in new mandates particularly in the financial services sector. AESC data reveals that the Asia Pacific Region has seen a 48% increase in new Financial Services assignments year on year our firm has seen an even greater lift in demand from clients. In Australia, the hiring is driven by two main "Following the credit crunch we have seen a terrific resurgence in new mandates particularly in the financial services sector Jason Johnson factors: firstly, because institutions cut headcount so aggressively during the credit crunch, they are now forced to re-hire to meet the recovering economy. Secondly, Australia has seen a number of new entrants seeking to share in the resilient economy. New institutions have come in the form of investment banks, fund managers and hedge funds so the competition for talent has intensified. Harry: Activity levels are high in Financial Services recruiting right now. Following a collapse in activity in late 2008, the market began to recover in Q3 of has been a very strong year, with activity levels comparable to 2008, if not We have seen strong demand globally, but the recovery has been especially pronounced in Asia Pacific. The strongest sectors this year have been Investment Banking, Global Markets and Consumer Finance. Most other sectors are busy, but activity in the Hedge Fund space has still not picked up to the same extent. "The strongest sectors this year have been Investment Banking, Global Markets and Consumer Finance Harry O Neill Nikki: There is light at the end of the tunnel for the middle market space where we focus. Although there are still very few deals being done, there is greater activity as firms are trying to put their money to work. We are seeing some investors and boards of directors asserting the need for professional

3 2 Interviews with Executive Search Consultants management within founder-led businesses that have strong growth trajectory. Unfortunately other boards are still slow to pull the trigger on CEOs who are not delivering. BlueSteps: How can a candidate best present him/herself to get noticed in today's marketplace? Jason: Candidates must maintain a multi-faceted approach to building their profiles. Success in their current role is of key importance, however building a profile and networks through industry associations, speaking at conferences, chairing committees and other events is always useful. Candidates should also seek to foster quality relationships with the leading executive search firms operating in their respective markets and sectors. Map out the relevant firms and introduce yourself to them. If you receive a headhunt call, use the opportunity to meet the consultant and build the relationship. "Building a profile and networks through industry associations, speaking at conferences, chairing committees and other events is always useful" Jason Johnson "BlueSteps is a very effective way of being visible to the retained search community, as its database in constantly mined by AESC member firms" Harry O Neill Harry: Successful candidates are discriminating in the channels through which they present themselves to the marketplace. Clearly, it's very important to be known to the top search firms in one s space. It always plays to be responsive to appropriate calls from search professionals, whether they are recruiting, or sourcing information. Recruiters have long memories, and remember people with whom they have built a good rapport. For individuals in transition, social media plays an increasingly important role, and sites such as LinkedIn are useful for gaining exposure to a broad audience. BlueSteps is a very effective way of being visible to the retained search community, as its database is constantly mined by AESC member firms. Nikki: My best response is what not to do! A broadcast to recruiters is not a method that will distinguish, especially if the greeting is Dear Recruiter or a misspelled name. Cold calling search firms is another way to annoy. Leveraging personal contacts into a particular search firm/consultant can be quite effective. A resume that highlights and quantifies business impact in a clear, concise way is always attention-getting. Professional courtesy is also essential - do not ignore the power of the thank you note, whether or hand written. "A resume that highlights and quantifies business impact in a clear, concise way is always attention-getting" Nikki Bondi ****

4 3 Financial Services Industry Outlook The Altered Landscape for Executive Search in the Financial Services Sector In this discussion, moderated by AESC President Peter Felix, senior retained executive search consultants explain how the financial services sector has restructured and the outlook for further changes and growth. Financial Services Industry Expert Panel Discussion Leslie Gordon Global Sector Leader Korn/Ferry International New York, USA Paul Heller Partner The Caldwell Partners New York, USA Aidan Kennedy Partner CTPartners London, England Moderator Peter Felix asked the panelists to discuss whether the new altered landscape means that we are now back to the future. Paul Heller of The Caldwell Partners commented The advent of the credit crisis and restructuring seen in financial services has really resulted in the sell side going back to basics in terms of it s revenue model and in terms of the way it focuses on business growth.what we see going forward is firms going back to the old way they made money, having their initiatives focus more on advising, underwriting and distributing securities. We re seeing the boutiques and mid-cap firms grow, and we re seeing talent spread across different size firms. "I think some of the boutiques that have formed will find themselves without scale and will ultimately be reabsorbed into bigger boutiques or even bigger firms." Leslie Gordon With this fragmentation, Mr. Felix suggested there may now be more boutiques and smaller organizations in the market. Leslie Gordon of Korn/Ferry agreed, I think on the investment banking side, you re definitely seeing a proliferation of boutiques. You have new firms that have formed as a result of the changes going on. She explained these firms have seen significant successes already, but cautioned What you are seeing on the investment banking side is an over-extension of activity in the world of boutiques. I think some of the boutiques that have formed will find themselves without scale and will ultimately be reabsorbed into bigger boutiques or even bigger firms, but there is a permanent expansion of platforms covering the advisory side of the world. Mr. Felix asked Aidan Kennedy of CTPartners to offer a European viewpoint of the new landscape, and he echoed Leslie s earlier suggestions. We re seeing a similar level of proliferation on the advisory side - I would argue that that s pretty much done at this point, certainly from a UK context and largely from a broader European context also. He explained that the vast overspecialization in broader investment banking that was seen in the latter part of the 90 s and early part of this decade was unsustainable, with bankers that are able to have a broad conversation with clients now heavily in demand. In some

5 4 Financial Services Industry Outlook ways, that s exactly what a banker looked like back in 1990, 1991 here in the UK, so to that extent, we have returned to some aspects of an old style model, but we shouldn t over play it. The discussion then moved to executive compensation, and whether we are back to the guarantees and inflated packages previously seen in some markets. That s very dependent on marketplaces. The real story is around the structural nature of the talent pool itself. In the course of the last 2 years there have been 2 core issues that have been impacting it, explained Aidan. Individual idiosyncratic aspects to each particular geography and country automatically segments your talent pool. Yes there s a demand for cross border capability, but the reality is bankers tend to focus by and large on one major geography. He continued, Secondly, there s been a generational issue in Europe, many senior bankers left the industry and because of the specialization issue, the next generation does not have the same level of depth of contacts, or personal relationships with the corporate institutional client base, so those that do are very much in demand. In the searches we do, you are almost starting with a short list before making the calls. You re looking at very narrow universes. Focusing on the USA, Leslie commented There is a legacy of TARP funds, but it affected elements of compensation, not total amounts of compensation. Regulatory scrutiny has affected the willingness of firms to extend multi year guarantees The other change that we note is that base salaries have risen substantially historically, base salaries were generally $ ,000, now Managing Directors in major firms are paid as high as $500,000 base salary. "Base salaries have risen substantially." Leslie Gordon After discussing the effects of legislation, Mr Felix asked what this means in terms of executive search, and whether there are any fears for what may happen over the next 6 months. Paul explained The reality is the amount of time it s going to take to write and implement the regulation means we re talking about a 5 year period. Leslie explained that her clients are operating Business as usual, even with all this uncertainty - or business as almost usual. They can t not do what they have to do in one case the thinking was We re hiring and whether we re captive or spun out we still have the needs, and the candidates felt that in either scenario there was no hesitation to continue, but it s probably case specific. a spike in hiring around internal structure, with increased hiring in finance, investor relations, HR, and other central functions which were neglected over the last 10 years." Aidan Kennedy Within the European market, Aidan commented From the search perspective, the basis of hiring hasn t changed too much in the last 12 months. There s still a tremendous focus on the operational side within the portfolio with a spike in hiring around internal structures, with increased hiring in finance, investor relations, HR, and other central functions which were neglected over the last 10 years. Leslie agreed, noting that they are seeing hiring in infrastructure and marketing, with Paul adding increased activity within risk management. ****

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