Recent redundancies in the wealth management sector would suggest that far from being a relative safe haven in the financial sector, the industry is just a little slower to pull the trigger. However, to suggest the outlook is entirely gloomy would be inaccurate.

Deutsche Bank has said it intends to cut costs in its wealth management division by 15-20% (though not in the UK, where it is expanding). This follows on from redundancies at both UBS (which is hiring in Asia) and Citi.

On the flipside, Credit Suisse says it intends to hire 600 private bankers by 2012, though even this is backtracking on its initial plans to take on 300 a year. RBS Coutts also has a number of vacancies in Zurich and Geneva and SocGen is planning a “quantum leap” expansion in its private bank.

However, new research from the Scorpio Partnership shows that assets under management declined by 15.7% last year, and cost-income ratios worsened to over 72%. But many private banks still added headcount, without seeing much return on investment.

As a result, the bigger players in particular are looking to urgently reduce their costs, and boutiques are benefiting from the fall-out.

Cath Tillotson, partner, head of research at the Scorpio Partnership, says: “Boutique firms are in hiring mode, as many relationship managers move out of larger investment banking institutions, which are currently scaling back. It’s opportunistic recruitment, and smaller firms are able to take on people with a broad range of wealth management experience.”

Recent examples of this switch include Ariste Chiabotti’s move from UBS to Clariden Leu (which also recruited Kenneth Toong from Deutsche Bank in Asia), WH Ireland’s poaching of a wealth management team from Allied Irish Bank and we also understand St James’s Place is looking to recruit.

The UK wealth management hiring market is currently “stagnant”, according to Rodolphe Morteuil of private banking headhunters McKinsey Mortreuil Clarke, but he agrees boutiques are recruiting.

“It’s very much below the radar,” he says. “Boutique firms are being swamped with CVs, either from disillusioned private bankers at larger firms, or those on the receiving end of job cuts.”

Disillusionment appears to stem from the fact that private bankers at larger firms are being encouraged to push in-house products which clients aren’t interested in. “Investment banks are desperate to raise revenue, so wealth managers are being forced to push these products. It places them in an impossible situation,” says one private banker.

Christian Sulger Buel, director of wealth management recruiters, Sulger Buel & Co, says the emphasis has shifted from simply selling products to becoming more advice focused. PricewaterhouseCooper’s 2009 annual private banking survey suggests 60% of wealth management chief execs expect to move to an advice-led model in the next two years.

Barclays Wealth has recently added eight financial planners, meaning it now has 42 people in its advice team, and UK IFA firm 2Plan Wealth Mangement says it is set to more than double its headcount through the recruitment of 240 advisers.

“The majority of firms that were going to make redundancies in the UK have done so already,” says Sulger Buel. “But there’s been a shift in focus – clients no longer want to be sold products, they want advice, which means firm’s hiring priorities have also changed.”