According to the 2011 Chinese zodiac, the year of the rabbit should have been a time of calmness and tranquillity, however, any expectations of 12 peaceful months soon dissipated as we experienced another year on the roller-coaster of market volatility.
Caution prevailed as investment managers lowered their hiring expectations, at the very least forestalling recruitment activity in terms of additional headcount.
Small to mid-sized businesses sought to backfill vacant positions or look to job share at least in the interim, while in large institutions managers had to justify any additional headcount.
As the year rolled on, distribution executives came to the realisation that not receiving a bonus would be the least of their problems.
They weren’t the only ones concerned about their survival as negative fund flows impacted significantly on revenue.
Senior management bore the brunt of redundancies, with a number of staff exiting their roles to seek new career opportunities.
While some would find new homes in like roles, there were those who departed the industry or picked up consulting assignments from their former competitors.
However, 2011 was not all about belt tightening and implementing risk management strategies.
Those managers who were able to capitalise on clients’ conservative asset allocation strategies and meet their demands for high-yield products were able to exceed their business targets, enabling them to fund additional headcount, adding investment and business development personnel.
For superannuation funds, 2011 provided its challenges, but overall it was business as usual.
There were amalgamations and a number of CEOs retired, moved on to consider their career opportunities, secured a new role in another fund or in one case decided it was time to return to an investment manager.
Super fund CIOs took the opportunity to bolster their teams, recruiting a raft of junior and senior analysts, most of whom were more than ready to exit their previous roles with major investment houses.
The increasing concern over job security made it easier for super funds to attract investment professionals and often super funds that were once the Cinderellas of the industry became the employer of choice in a sea of uncertainty.
Offshore investment managers continued to parachute in and out of Australia, however, there was a noticeable difference from previous years in terms of the numbers of managers who made the journey.
The wave of hopefuls, with little more than a pitch book and an overabundance of self-belief, were nowhere to be seen, however, as in previous years we may yet see some of these grace our shores as we are after all heading into summer.
Those that came often had been here more than once before and were full of serious intent about growing their businesses in the ever-enticing Australian super market, but most of these shied away from employing a local representative.
While only a handful at most gave any indication that they’re considering committing to establishing a local presence, so the opportunities for executives seeking representative positions remained few and far between.
Most offshore managers who were serious contenders worshipped at the altar of the asset consultants, seeking enlightenment as to how to best proceed.
This invariably led to little more than intense navel-gazing and they headed home without much more than a lot of homework to mull over.
More often than not the conversations with them revolved around their immediate business focus, which was invariably in their home market or foreign markets in which they had developed significant client commitment and could service without overextending themselves.
There has been growth in headcount in a number of investment managers that have employed specialist investment professionals and opportunistically recruited expats coming back from the United Kingdom, United States and Asia.
However, the expat numbers have thinned this year as many executives left the UK and US after big redundancy programs were instigated in previous years.
Additionally, the market in Asia remains positive with the number of senior roles on offer remaining at levels similar to 2010.
A number of investment managers also took the opportunity to recruit business development executives to grow a presence in business channels they had previously ignored due to their concentration on major super funds and other large institutional clients.
Unlike the fallout from the global financial crisis, this year has proven to have had pockets of strong remuneration growth, particularly in terms of short-term incentives awarded to distribution personnel, who either work for managers that have had success with high-yield products or alternative strategies.
However, the rest of the market remained relatively flat with consumer price index increases in base remuneration and lower range short-term incentives.
With 2012 less than a month away we can only hope that the year of the dragon will be a better year; now where did I put that horoscope book?
Peter Dawson is principal of The Dawson Partnership.
