Market Roundup 2009

By Nick Careless

December 2009

As 2009 draws to a close and we look ahead to a new year, it has been a tough year for many, if not all of us, in the private client world. All firms, business leaders, job seekers, employees, recruiters and other service providers to the industry have been affected. The economy and the job market have continued to perform badly this year globally. Hiring has been affected in all markets, both on and offshore, and one can think of very few firms who have not undergone some form of restructure or revision to their strategy during this time. Firms have been watching business flows very carefully over the past year and have been very tentative when making hires. Indeed, r ecruiting has not been a priority for most businesses as senior management have had other more pressing matters on the agenda.

Based on the evidence however, redundancy and new hire numbers would suggest that we are through the worst of it, with more encouraging employment numbers and market sentiment during the second half of 2009 than the first. The general feeling is that this year, at least financially, has been at worst a write-off and at best an exercise in analysing one ’ s business; re-trenching and re-positioning for the future. As such, we are now cautiously optimistic about seeing some slow growth, and low profitability by Q2 of 2010.

Has this phenomenon really been global? Have there been continued active regions or unaffected areas in 2009? What are the areas to watch in 2010?

T he Caribbean market has remained strong to a degree throughout the year, although a number of issues including recent budget revenue measures [for example, in Cayman], renewed scrutiny by the US and the G20 ’ s more aggressive stance toward offshore financial centres, means that costs of doing business are going up, jobs for expat workers will become more scarce as locals are hired in their place and hiring will be adversely impacted as business goes elsewhere as a consequence. From the jobseeker’s side, some inflows into the Caribbean, and other, centres may be driven by people seeking to escape the recession in the UK as well as benefiting from the low tax environment and a favourable dollar exchange rate though we are still monitoring this carefully, as a number of the powerhouse firms have been making, and continue to make, lay-offs. There is somewhat of a time delay here, wherein offshore locations experience the knock-on effect of the global economic downturn coming out of major financial centres upon which they rely for work. This time delay, already felt in onshore jurisdictions more than a year ago, is now starting to impact these offshore jurisdictions.

We have felt that, over time, Asia is the region to watch and where increased opportunities may lie for professionals in the wealth management industry. The wealth management mindset in the region is definitely undergoing a period of change, and this will bring increased opportunities for professionals in this field. There is a sense that Asia is going to be where the growth and opportunity is. More and more professionals canvassed are saying they would consider positions in the Asia Pacific region, especially in Singapore, over and above Hong Kong. Given the vast amount of wealth, changing attitudes to family wealth and growing numbers of the newly affluent, the continued growth in this part of the world and the interesting assignments on offer to qualified professionals, Asia would appear to be a ’ hot ’ sector to watch for 2010.

In terms of the Middle East, the scene of previous rampant hiring over the past few years, there continues to be potted hiring, though this is proving to be the exception rather than the rule. The shine has rubbed off Dubai and the region to a degree with the Emirate suffering from a lot of negative press and serious adverse developments such as the slump in property prices, upon which a lot of the economic boom was propped. Based on the above factors, jobseeker interest in Dubai is at a low right now, although this will no doubt change over time as the region finds its place on the global stage.

Closer to home, Switzerland has, as we know, had some issues this year with some of its big brand banks taking flak, but with the high net worth client zeitgeist moving away from the aggressive attitude and emphasis on bottom line of the US model, and an emphasis on quality of service, ethics and discretion all important, the Swiss private banking market is on the up. Additionally, with adverse tax regimes in the UK penalising hedge fund businesses and high earners, including the high value non-dom market, Switzerland is one of a number of countries that will benefit with new business inflow.

With UK qualifications and experience at a premium on the global market, and the situation in the UK becoming increasingly more untenable for many on a number of levels, many professional firms are rightly concerned about an exodus of talent and brain drain. In addition to responsible advice, client service, compliance, governance and the bottom line, human capital is absolutely crucial to the success of any business. As such, as we move into the New Year, and indeed a new era in our business, firms need to focus on investing in their people, and people need to focus on investing themselves, if both are to remain competitive in the increasingly global market.