GLOBAL - Investment professionals are increasingly leaving the financial sector for pastures new as firms restructure and salary levels drop.
And many of them are setting up on their own.
Human resources consultancy DBM surveyed 1,147 individuals from accounting, banks, brokerages and insurance firms from 27 countries undergoing career transition through DBM in 2002.
The majority of those surveyed found themselves in the job market due to an organisational change, restructuring, merger or acquisition or a reduction in workforce. Nearly half (48%) were forced to leave the financial services sector. DBM said financial services professionals of all ages were more inclined than those in other industries to pursue entrepreneurial opportunities.
Peter Murgatroyd, regional operational director of DBM UK, said: “Switching industries is a necessary step for many people in transition.
“Networking proved the key factor in achieving for success for the majority of those interviewed. The current climate requires job seekers to repackage their skills, be willing to relocate and retrain in order to find employment.”
Separately, uncertainty in the private equity and fund management sectors has led to a surge of business, according to one London accountant, Mike Egan, a partner at Hacker Young, who said he has received a flood of new clients from the City. He is advising new entrepreneurs about setting up their businesses.
Egan said: Many jobs are being cut and there's increasing uncertainty about job security at many of the large financial institutions. I'm finding that an increasing number of high calibre individuals are choosing to depart on their own terms or take voluntary redundancy.
Egan said that these experienced, well-connected people are becoming increasingly aware of the benefits to be gained from setting up in business on their own.
Most of them have enough capital from their own careful financial planning or from redundancy packages to be able to take the plunge. And most have got their own established clients that they've dealt with for years and who'll remain loyal to them.”
Remuneration for investment professionals in the UK has declined significantly from 2001 levels, but is still higher than in other seven countries studied by the Association for Investment Management and Research (AIMR) and Russell Reynolds Associates, an executive recruitment firm.
Pay in the UK is 22% more than the worldwide median of US$130,500. Overall 2003 median total remuneration for UK professionals is £103,502, representing a 16.5% decline from 2001. While base salaries remained relatively consistent, incentive remuneration declined significantly, with median cash bonuses falling from £43,419 in 2001 to £28,188 in 2003, a 35% decrease.
In the poll of 16,500 AIMR members, which included pension officers and portfolio managers, the US trailed the UK in second place. Those surveyed in Singapore, Hong Kong and Canada reported a median total remuneration that significantly trailed their international counterparts, with professionals in Japan and Switzerland falling squarely in the middle of the pack. However, in its Survey of Pensions Managers, Consultants and Administrators 2003, Remuneration Economics said it found a “more stable and less highly rewarded market”.
The rate of increase in UK earnings had fallen to 5.9% from 8.5% in 2002; resignation rates had fallen to 7.7%, only just over half of 2002’s rate of 14%; and the number of companies reporting retention problems had also “fallen dramatically”.
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