Global markets are in the midst of a thunderstorm and many financial services companies have changed their executive team to deal with the challenges ahead. Incoming board executives have to make some immediate decisions to deliver better client outcomes and more profitability in this environment. Many may enhance their profile as a result of success, and many may not. It is an important period in time to deliver in your C-Suite role. There is no hiding place right now.
In this article, I will provide my view on the asset & wealth management market and the challenges it represents to C-suites, and look at what new C-suite executives could be doing differently to navigate and deliver results in the current climate.
State of the asset management market
Until last year, the asset management industry had been in growth mode, topping $100 trillion in total assets. By December 2021, we had seen headcount growth across most functions, it was an extremely competitive marketplace for most asset managers and they had to offer good packages to attract top-performing talent. As a result, salary bands and total compensation ranges have stayed static (at worse) or increased.
But right now, in the perfect storm of headwinds we are experiencing, financial markets are well below their record highs from late last year.
While some asset manager trends related to ESG, diversity, equity and inclusion, and mergers and acquisitions activity are particularly worth noting, inflation is the elephant in the room and may cause discomfort to operating models and profit margins now and for some time to come.
Appreciating that the financial services sector and asset and wealth managers in particular are having a demanding year stock market-wise, we have also seen many new C-suite appointments in the last 24 months. These new hires need to continue to deliver transformation and change projects and create better outcomes for their organisation and client base. In addition, they will need to continue to invest further in the human capital they already have or bring new talent into the organisation.
What could new C-suite executives be doing differently?
Now is not the time to be a maverick or go it alone. C-suite executives need strategic partners they can trust on issues ranging from the economy to politics; outside counsel has never been more important.
In this climate, making binary decisions about your company may not be as effective as making holistic ones. Your decisions should be strategic, and take into account that while you might not be a politician or an economist, your clients are being affected by these types of issues.
That means you need good collaboration within your business as well as with external partners to help you navigate through what will probably be a volatile 24-month period that isn’t correlated to you running the business, but still means you can deliver results to the company and its shareholders. Seeking external counsel helps provide you with new insights and increased objectivity.
Many C-suites are also moving towards more customer-centric propositions, as opposed to being rigid in their product offering, as well as focusing more on the employee. For example, leaders are striving to understand how to navigate the continuous internal factors of hybrid working and complex heightened employee expectations, as well as the uncertain future period I’ve already mentioned. Additionally, trends around digital transformation continue, and with that comes the need to develop technical expertise.
Aside from that, it’s important to send a clear message both internally and externally about what you’re doing - with a special focus on ESG and diversity. You have to walk the talk, no greenwashing allowed. Virtuous, strong brands that give back, and perhaps do a lot of things that aren’t the primary responsibilities of your business, mean you’ll get more business.
How partnering with an executive search firm can help
Over the last two years, money has not been the deciding factor in attracting individuals to join a new firm. Companies must be open and communicate more regularly with prospective candidates during the interview process. In reality, the 'onboarding process' starts at the first interview. Elevated engagement and education about the role, company, culture and long-term career opportunities are essential to success in hiring.
All these unique reasons that are specific to the current time mean you probably need an executive search firm now more than ever. Search firms understand the market dynamics and can provide you with deep insight and advise on current trends, and good partnerships will help the good win out - we’re also often best placed to find the talent you need. Competitive advantage comes from the people you hire, so it simply makes sense to hire the best there is.
If you’d like to discuss succession planning or investing in your existing talent to help you navigate the current climate and drive your business forward, contact me today and let’s set up time for a call.
