One of the perennial issues for the wealth management sector is the so-called “war for talent.” The amount of high quality advisers and investment managers is limited, yet they are the lifeblood of any firm. Research shows that all Wealth Management firms seek to differentiate themselves in the eyes of their clients through the quality of their staff. Paradoxically, recruitment is an area in which many firms are reluctant to invest.
To help recruit the best people, most organisations at some point seek the help of a recruitment company. They are plenty of these around, with firms launching wealth management practices all the time.
Yet questions remain: how well do these recruitment firms know the wealth management profession and its needs and how well do they serve their clients?
Adrian Laycock is one professional who has seen the recruitment profession from both sides. First as a wealth management professional during his time as head of UK onshore wealth management at BNP Paribas and an executive director and client advisor at UBS. Now Mr Laycock has joined the specialist wealth management recruitment boutique Somers Partnership (www.somerspartnership.com) as partner (see the wealthnet 16/06/2011).
Although at face value the wealth management sector may appear to be well served by recruiters due to the number of firms operating in the sector, Mr Laycock told the wealthnet he believes that it is, in fact, underserved due to the variable quality within the recruitment sector.
“Wealth managers are sometimes not getting the staff they deserve,” said Mr Laycock. “We are so often told that Wealth Management firms seek the best possible people and yet they often do not use the most effective ways to get them”.
The Somers Partnership works on a retained basis, with the firm looking to recruit paying them an agreed fee to carry out the work of finding the right person for the position. In effect, they employ the firm to fully understand the hiring firm, the role being offered and possible candidates, both using the Somers Partnership’s proprietary database of over 10,000 wealth management professionals, as well as contacts within the industry and Mr Laycock and Mr Somers’ own knowledge.
Sometimes wealth managers can question why they should pay a retention fee to the recruiter, but Mr Laycock is adamant that this is a concept with which they should be more than familiar.
“A wealth manager wouldn’t be happy if a client said they would only pay for their services if they were happy with investment performance,” said Mr Laycock. “To put our service in investment terms, we add alpha to the recruitment process rather than simply beta.”
“Along with a small number of other recruiters, we only work with organisations that are fully committed to the hiring process and willing to invest in it,” said Mr Somers. “We have designed a particularly thorough recruitment process which aims to take the risk out of recruiting. Our selection processes mean that we match our client’s requirements with the very best available candidates in the market. The result is that our candidates are normally more effective more quickly and over time, deliver better results for our clients.”
The firm takes many steps to ensure the person is the right fit for the post. Firstly, Mr Laycock is able to use his knowledge of the sector, the firms and products they use to “delve deeply” into candidates’ past performance and background.
This is reinforced by referencing and due diligence on candidates and a third party candidate vetting service, when a client requires it.
Also psychometric testing is carried out by Alastair Wood, who for 12 years was HR director of Ansbacher Private Bank.
Finally there is an “on-boarding” process for when the candidate accepts the position. This adds tremendously in helping a successful candidate become productive more quickly in the new firm.
All this adds to a service that Mr Somers said is “provably different,” which in turn has helped the firm to fill 29 positions over the past 18 months.
Mr Laycock and Mr Somers contend that there is a shortfall in supply of asset gatherers relative to demand and yet a significant number who are not producing profit for their employer. They argue that their model reduces the hiring risk and increases the likelihood of high production for their clients. This represents the ‘alpha’ they strive to provide and which Wealth Management firms seek.