Wall Street has had its fill with the Type-A risk takers who can cost a firm billions after they have made their millions and moved on.
The hiring focus now is on the back-office compliance staff to rein in the risk takers.
But the Street also can’t find enough rock-star talent to advise America’s wealthiest individuals.
These financial advisers and private bankers belong to an exclusive club — one of the few bright and rewarding exceptions in a generally dismal Wall Street jobs scene.
“It’s a solid business, more the tortoise than the fast-moving hare,” said adviser Gerry Klingman of Klingman & Associates on Avenue of the Americas. “Before the financial crisis, sales and trading, derivatives and hedge funds were strong,” he added. “Not anymore. Now the baby boomers are aging and need financial advice, and things have become more complex with the fiscal cliff and everything else.”
Since late summer, these compliance advisers and private bankers were in the hottest jobs sector listed on eFinancialCareers, the popular careers website for financial pros — and the sector posted a 44 percent year-over-year gain in listings.
Out of favor: jobs in derivatives, hedge funds and commodities, each posting drops of nearly 50 percent in the same period.
Many of the jobs gains were with asset-management firms. For example, Merrill Lynch, the famed “thundering herd” division of Bank of America, expanded by 439, or 3 percent, to 17,533 in the last quarter, it reported. “Private wealth management has become the attractive place to be since the leveraged bubble burst,” said Klingman, an adviser to business executives, entrepreneurs and professional athletes.
Outside the cozy confines of wealth management and private banking, the bursting of the bubble has triggered a securities jobs bloodbath.
Bank of America, Citigroup, UBS, Deutsche Bank and Credit Suisse have cut thousands of these jobs. As hiring holds up in wealth management, BofA is planning to pink-slip more than 16,000 workers elsewhere. Barclays last week was said to be mulling 2,000 layoffs in investment banking.
Constance Melrose, managing director at eFinancialCareers, says the Street’s priorities are shifting — from hiring risk-takers to spending on risk managers and systems.
Wealth-management operations and private banking, with low overhead and a prospective pool of four-star monied customers, are a much more cost-effective bet for firms.
Melrose says the twist is that many financial advisers and wealth managers are baby boomers and nearing retirement themselves, so the Street needs to quickly find and train a new generation.
One private bank was advertising this week for a junior- to mid-level private banker in DC, with an annual salary of up to $180,000, performance-based bonus and benefits.
“The only way brokerage firms are going to grow is by increasing their assets under management. That necessitates recruiting advisers and, in some cases, paying them monster deals to join,” according to Howard Diamond, managing director of Diamond Consultants, a recruiter of top adviser talent.
These monster deals are often worth millions of dollars to the right financial adviser.
Said Robert Gordon, president of New York financial services firm Twenty-First Securities: “Wealth-management firms are still paying big upfront deals to get brokers to move from one place to another.”
Diamond says the recruitment of advisers won’t slow down anytime soon. “We continue to see a robust appetite for financial advisers, and we project 2013 to be the same,” he said. The downside: Finding talent has become a problem. Melrose says firms tell her it’s challenging to get qualified pros with the proper skill sets.