As 2015 draws to a close, now is the time when most boutique investment banks, large global investment banks, corporate banks, broker-dealers and buy-side firms have started to formulate their hiring plans – if they haven’t finalised them already. With a flurry of job cuts in the final quarter, prospects for 2016 might not appear overly bright, but there are still sectors that financial services recruiters believe will be strong next year.
Here are the financial services roles that recruiters expect to be most in demand in the U.S. in 2016.
Given the huge increases in M&A activity this year, particularly in the U.S., it's no surprise to see advisory jobs on the list of hot jobs. However, after a series of senior moves in 2015, next year the demand will focus on associate and VP level, suggests Oliver Hayes, managing principal consultant and head of corporate and investment banking for the Americas at Selby Jennings
Many banking teams in the U.S. have strong originators who can go out and win transactions, so they need the associates and VPs to have the strong execution experience in order to assist in getting the deals across the line, Hayes said.
“There might be more turnover at the larger global investment banks due to bonuses being down or platforms not being as stable as they should be,” he says.
Hayes predicts that the industry will see a few senior executive moves or even prominent team moves in the first quarter of 2016, as there are always people looking for either a more stable environment or better compensation. He predicts that these hires will all take place across New York, San Francisco and Chicago. The Financial Institutions Group (FIG) and healthcare will be particularly strong, he predicts.
For some financial institutions, credit is the biggest single area of demand, according to Robin Judson, the president and managing partner of Robin Judson Partners, a boutique recruiting firm focusing on hedge funds, private equity and investment banking.
There is not much demand for credit traders, of course, as most banks have suffered throughout 2015. However, Judson is seeing demand for more experienced credit specialists, researchers and investment analysts, specifically people who’ve been through the last cycle and have dealt with distressed debt. Now that the Fed has announced four quarter-point interest-rate increases in 2016, financial institutions need investment specialists who can deftly navigate a rising-rate environment.
“There is a real value being placed on people who have credit investment experience, perspective on the markets and have passion for what they’re doing,” Judson says.
Investment banks will need to bolster their technology expertise next year, believes Jeanne Branthover, managing partner and head of the global financial services practice at executive search firm Boyden. This is not surprising, but there will be specific focuses. For a start, there's a need to shake-up the senior ranks, so getting the right chief information officers and chief technology officers will be key in 2016.
Then, there's the specific areas of demand. Goldman Sachs was already hiring for machine learning, and this will be an important area for banks next year, says Branthover. Meanwhile, cyber-security experts, user experience (UX) designers and data scientists will remain in demand, she says.
Asset management and wealth management will be growth areas in 2016, with more financial services firms expanding into these areas, believes Branthover.
"Consulting firms and financial services firms are getting into this space, since it has had consistent growth in all economic times," she says. "It is one of the few areas during the crisis that we saw firms continue to make money in."
Firms already in the space will continue to hire talent such as business developers, revenue generators — that is, big-producing sales professionals and financial advisers — as well as compliance professionals and governance specialists.
As baby boomers age there is a huge demand among major brokerage, regional and independent firms alike for skilled advisers to help their clients plan for retirement, according to Mark Elzweig, the founder of Mark Elzweig Company, which specializes in placing financial advisers at wirehouse, regional, independent and RIA firms.
Experienced advisers who control pools of client assets are highly sought after by wealth management firms. Hiring firms pay them hefty signing bonuses to join that are tied to multi-year contracts, and that will continue in 2016, he says.
Under the technology umbrella, there are other roles that will be especially in demand among U.S. financial services — directors of data and analytics. This function has become so significant that these roles are being created in both the business and IT departments of an organization.
“Clients are looking to improve business performance and better leverage the data they have in-house for a wide range of revenue- and non-revenue-generating purposes,” said Gina Schiller, managing director at Jay Gaines & Co., a retained executive search firm.
Middle office roles in compliance and risk have long been hot across most areas of financial services, but the demand has shifted throughout 2015.
At the end of last year and beginning of this year, market risk auditors, credit risk auditors and credit risk modelling roles were most in demand, according to Lisa Mogilner, a senior executive recruiter and the head of alternative investments and financial services at Dynamics Associates. Towards the middle of the year, there was a big focus on compliance professionals specialising in the areas of anti-money laundering (AML) and know-your-customer (KYC), Mogilner says.
Now, the focus has been moving more toward professionals with expertise in Basel III, the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR) and risk management, she said.
“Throughout the second half of 2015 and moving into Q1 2016, model governance has been the most vital area of coverage for a number of tier-one financial institutions,” says Kareem Bakr, the head of credit risk recruitment, Americas, at Selby Jennings. “Banks are under a tremendous amount of regulatory pressure, and with CCAR deadlines in March, teams are now going full throttle with hiring permanent employees, as well as seasonal consultants,” he says.
Financial institutions have been under pressure to bolster their internal audit functions throughout 2015, but many are now prioritising junior hires rather than recruits at a more senior level, says Mogliner of Dynamics Associates. More experienced professionals are likely to see fewer opportunities next year as more institutions look to hire entry-level employees that they can train up over time, she predicts.
“Audit is going to stay hot through 2016, as it’s a big focal point for all financial services firms, because they need to make sure things are done right the first time rather than expose themselves to fines,” she says.
Most smaller to mid-size hedge funds with, say, between $1bn-$8bn in assets under management previously had a senior executive taking on two distinct senior roles. For example, someone might have had to wear both the CFO and chief compliance officer (CCO) hat or serve as both COO and CCO.
Driven by increasing regulatory pressure, one of the biggest trends of 2015 was an increasing number of hedge funds choosing to hire a dedicated CCO, says Andréa Colabella, co-founder and principal at Cardea Group, a recruitment firm specialising in the asset management space.
“Regulators are almost mandating it, making it much trickier for investment firms to not have a dedicated CCO,” she says. “Firms that don’t have one will be hiring one in 2016.”
Next year, Colabella expects asset management firms that do not yet have a dedicated risk department to create one and hire accordingly to build it out.
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