UK - Fund managers are damaging their prospects of winning new business by making staff cuts, a leading consultant says.
The warning comes after UBS Global Asset Management became the latest to make staff redundant.
The decision by UBS follows similar moves by Schroder Investment Management, Aberdeen Asset Management, Axa Investment Management, JPMorgan Fleming Asset Management and others.
Mercer Investment Consulting European partner Nick Sykes says any staff cuts will cause consultants to reassess their opinions of them.
But he stressed: “Provided that the core investment teams are not affected by the cuts, then one would hope that fund managers recognise where their bread is buttered, and maintain the people who perform.
“One assumes they know who their key people are – and that they wouldn’t do that – but you never know.”
As well as changing consultants perceptions of fund managers Investec Asset Management head of institutional business Mark Samuelson pointed out that staff cuts badly affected the mood within fund management firms.
He said: “If people are being laid off, it does affect moral no question, particularly if your performance is bad and you’re losing funds. You have got to be careful that you don’t end up losing the wrong people as a result of that, simply because people are starting to get nervous.”
He spoke out after UBS Global Asset Management made 15 UK-based support staff redundant.
Chief executive Paul Yates said: “The redundancies are a result of a internal reorganisation to help position UBS Global AM for continued growth in 2003. We will be helping these people to find new employment, and hope that at least some will be able to find positions within UBS.”
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