Securities firms are reportedly beginning to hire again. The hiring comes amidst continuing industry layoffs – particularly affecting Advisors with an internationally focused practice.
Recent US market gains, and a sense that recovery is underway may be encouraging financial firms to hire again. Overall, the securities industry is still losing jobs, but the pace has slowed considerably, according to the Bureau of labor Statistics. New hiring may be offsetting the losses.
This renewed optimism comes at a time when foreign clients are increasingly important to the lives of Advisors and financial Institutions alike. As the US Dollar slips relative to other currencies, and the markets have shown substantial gains, foreign investors are turning to the US. The United States offers a relatively low tax environment and the perception of strong regulation. The combination of these and other factors are making the US markets more attractive to foreign investors.
But larger firms appear to be eliminating Advisors who are not meeting new higher production goals put in place as a response to the credit crisis. Many former “middle range” Advisors are feeling the heat or being encouraged to leave. Foreign focused Advisors are being hit particularly hard; not only do they have to meet the higher production bar, but some larger firms are becoming reluctant to service foreign based business at all, due to the additional burdens of anti-terrorist legislation. At the same time, however, those same firms are aggressively pursuing domestically focused top performers.
According to Robert Shapiro of Trade Wall Street International, a small brokerage with an international focus, “a lot of good Advisors, particularly in the international space, are finding that the larger firms have become less responsive to their business.” Reluctance in opening accounts, limited product offerings and services for international clients, and higher fee generation requirements for Advisors are commonly cited complaints from Advisors at large firms.
Consequently, middle-level and foreign focused Advisors are essentially being given a choice: generate more fees or go.
Shapiro empathizes with the Advisors’ dilemma, but ads that the new higher production requirements at Big Firms are driving business his way. “Our core competence is serving those mid level brokers; the same ones currently being let go; it’s what we do best.” Trade Wall Street, as a firm, specializes in serving Advisors with an international bent and mid-level production range. “We look for thinking Advisors with a solid track record of serving their client’s interests, rather than running up fees. At the end of the day, our reputation is on the line, and we are known as a firm that adds value.
There is a lot more at stake for Advisors than sheer size of the firm they are with, says Shapiro.” Size matters – but big isn’t’ necessarily better.”
Stability of the institution ranks high in the list of must-haves for re-locating Advisors, says Shapiro. And there is the perception that some of the large institutions are now failed and on Government life support. Advisors who see the writing on the wall have had a difficult time determining which firms have the stability to support their business. Then there is the hiring process and following that,the actual transition process of getting business up and running at a new firm. The transition from one firm to another can be very disruptive.
Nevertheless, brokers may soon be dancing to a new tune: the Wall Street Shuffle.
Shapiro adds that this may really be an opportunity in disguise for experienced Advisors with smaller practices. “The transition period can be daunting, but you’ve got to look beyond” he says, adding that Stability, understanding, support for your kind of business, and a even a higher payout may be the likely result. Given current unemployment numbers, that sounds like good news.
In September, the industry lost some 700 jobs nationally, on a net basis.
