"ANOTHER 10,000 jobs to go at XX Bank", "Hiring freezes expected in many financial firms", "Deep recession to last several quarters". Do these headlines sound all too familiar? Is it all doom and gloom for the foreseeable future? Is there even a glimmer of hope?
Let's set the record straight - a global recession is looming and the good times may be over.
But if you look harder and dig deeper, you will find that there are still opportunities out there. Where there is danger, there are also opportunities.
The party is over
Financial firms in Singapore have been on a hiring frenzy for the last three years.
In particular, the wealth management industry (private banks, asset managers and insurance firms) saw spectacular growth, owing to the increase in wealth of many high net worth individuals in Asia.
As Singapore further cemented its position as the "Switzerland of the East", a war emerged to hire wealth management professionals. As the war for talent intensified, hiring was, in some cases, extremely bullish, thus creating a "bubble".
As the economy soared, so did expectations. In private banks, for example, candidates were able to attract strong interest from many banks by promising to bring US$20 million (S$30.8 million) or more of Asset Under Management (AUM) in the first year of joining. Many have subsequently failed to deliver these results.
In good times, firms are more tolerant. But in downtimes, no mercy is shown. The message is now crystal clear: "Show me the money!"
While no one can predict how long the financial crisis will last, the thing to remember is that there is still money to be managed and grown.
Here are some key developments in the wealth management industry:
As with other downturns where investors are recovering from their losses, the focus is now on the preservation and protection of wealth.
According to senior insurance professionals, insurance protection products with capital growth options are particularly attractive and in strong demand.
Demand for funds
As private banks face tough times and shore up their funds and strengthen their books, they are also gearing up to ride on the market's recovery.
There is a demand from clients for quality advice on weathering the down-market and preparing for the recovery. Besides providing quality advice and service, private banking professionals are also concerned about preserving their clients' assets and their loyalty in a highly competitive market. Good, sound advice is a key selling point as clients are now concerned about recovering their wealth rather than taking risks.
Still in demand
Private banks are still very keen to attract talent, although the focus has shifted to attracting senior bankers who can bring in clients with sizeable assets. The industry is still short of good talent and good bankers can still command good remuneration.
They are the unsung heroes who are instrumental in partnering the bankers in advising clients on asset allocation and portfolio management. While many established private banks have an investment advisory team onboard, the performance of these professionals is key in providing the right advice to clients.
Trust and estate planning professionals
High net worth clients continue to be concerned about setting up the appropriate trust and estate structures for wealth protection purposes. As the appetite for high-risk investment has subsided, this area has come into focus.
Insurance product specialists
Insurance firms are looking to roll out new products aimed at guaranteed returns with a stable growth element. Product development and actuarial capabilities are in demand for firms to strengthen and gain further market share.
With an increase in product offerings and competition, the distribution and channel management is another core area that has demand for the right talent.
While the pundits expect this year to be a tough one, it is also an opportunity for the best professionals in the wealth management industry to differentiate themselves and emerge as the light in the darkness.