Job cuts across Australia’s $330 billion plus wealth management industry are likely to continue as all major groups within the sector experience significant strategic change.
Last week, ANZ Banking group announced it had cut 230 jobs from within its wealth division, the terminations making up part of the 1000 cuts the company announced at the start of the year.
In the wake of ANZ’s announcement, industry sources said the banking group’s wealth rivals are also quietly shedding staff.
“I think that there is definitely costs pressures within some of these larger groups,” Financial Recruitment Group NSW state manager Conor Donoghue told InvestorDaily.
He said most of the groups are looking to redeploy the staff internally rather than just making redundancies.
“But there are definitely redundancies and job cuts happening across the wealth industry and the general industry,” he added.
“But as a recruitment business we are not seeing it cutting very deeply into front line roles, I think we’re seeing this more so around back office jobs.
“Groups are still hiring, but some of the skills set that they’re hiring for are just slightly changed and I think that is going to continue.”
Donoghue said as consolidation continues at the larger end of the market, there will be duplications of roles.
In particularly, he noted such duplications would be felt in head office so it is inevitable that there will be some downsizing or changes.
Earlier this week, Axa Asia Pacific chief investment officer (CIO) Mark Dutton left the company after his role ceased to exist due to finalising of the integration of Axa’s investment funds with AMP Capital.
“The role of CIO has ceased to exist now that the integration has been completed,” Dutton told InvestorDaily at the time.
A spokesperson for the company said no further staff exits from the investment team, following the completion of the integration of the Axa funds.
“There will be some changes in reporting lines, but no departures at this stage,” he said.
However, despite the job cuts, Donoghue still there is still positive movement within Australia’s financial advice sector.
“There is still activity that is happening, financial adviser numbers are still growing. I think that businesses are still activity bringing on advisory numbers and as a recruitment business we are still busy,” he said.
Derwent Executive managing director Ben Derwent said a reduction of inflow funds and the poor equity market has forced wealth groups to rework their business model.
“Given retail investors have run for the hills, the amount of inflow of funds has all but dried up. That has caused many of the larger wealth or fund managers to reduce their head count,” Derwent said.
He explained that the market now has too much capacity given the current flows of funds so groups are merging and cutting costs to compensate for a lower revenue projection.
“If that’s at the big end of town, then I’m sure that at the mid and small end, there is [also] lots of change,” he said.
“That is the same across financial services, lower revenue means a lower cost base, lower cost equals less people.”
