You’re hired! What wealth firms look for in candidates 15 December 2015

You’re hired! What wealth firms look for in candidates

Hiring top talent is what any wealth management firm worth its salt aims to do.

The challenge they face, though, is how to separate the rainmakers from those who serially jump from one firm to the next in the quest for better pay or greater freedom. Turnover in the industry has been particularly high in recent years, driven by regulation, office closures and company mergers.

Given the significant amount of movement, it poses the question: what do wealth management companies actually look for in an individual when they decide to bring them on board?

Graham Coxell, executive chairman of Rowan Dartington, highlights the strength of a potential hire’s relationships with their clients and whether there is a cultural fit with the company as the two most important aspects.

Coxell has been open about his intentions to expand offices across the country since Rowan Dartington was acquired by St James’s Place.

‘What is important for us is not only do the investment managers fit our criteria, but that we fit theirs as well. It is a two-way process. We don’t like people who move on a regular basis, which would raise questions about flexibility and adaptability to different cultures,’ he said.

‘On the cultural fit, it is about being open, honest, authentic, self-aware and having a high level of regard for others.’

Mark Somers, founder of recruitment firm Somers Partnership, believes it is crucial to weed out what he describes as the ‘well poisoners’.

These are wealth managers who are dangerous to clients and organisations because they hop from job to job, leaving a trail of destruction in their path.

‘They are toxic. They destroy value,’ he added.

There are three types of private bankers in the market place, according to Somers Partnership’s research: the ‘rainmakers’, the ‘well poisoners’ and the ‘lawnmowers’. The latter are private bankers who are generally competent and client-centric.

‘The best ones know how to turn the sprinklers on, to grow the grass and they are client-centric. They are good at their jobs,’ said Somers.

Meanwhile, rainmakers have relentless focus and they are highly profitable.

 According to Somers Partnership’s research, private bankers break down as 10% rainmakers and 80% lawnmowers, with the remaining 10% well poisoners.

Thesis Asset Management director of business development Lawrence Cook cites those with good client empathy as being top of the list.

‘We have to recruit people who have an appetite for constant learning and evolution. And we have a need for people who fundamentally care about delivering for the client,’ he said.

‘Simply taking at face value when a client says, “I need this kind of investment” is not the same as understanding the client’s personal goal or objective.’

The client book illusion

John Crowley, chief executive of Hawksmoor Investment Management, considers factors such as an individual’s ability to accept and contribute to the firm’s investment process as a top factor when hiring.

Crowley is well placed to comment, given that the firm has been on a hiring spree, recruiting several investment managers from Brewin Dolphin and subsequently launching offices in Dorchester and Taunton.

On the back of this, he said the firm has received calls from head-hunters, adding: ‘We are offered a lot of frogs to kiss but not many of them turn out to be princes.’

The client book that someone brings over with them is also an important consideration when hiring, but Crowley warns against the dangers of being dazzled by size.

‘I think the size of the book is less important than the composition of that book. We are discretionary, therefore, we would want people to bring discretionary clients with them or those who can be readily turned into discretionary clients. We are not in the business of taking on traditional advisory or execution-only business.’

He suggests that the size of the book becomes important if it warrants opening up a dedicated office for the new joiner.

‘Another important factor is the likelihood of actually transferring that book. You might get people coming to us, who call themselves investment managers with major banks. Yes, they may be looking after £100 million, but they do not really have the client relationships. That is maintained by a separate individual, so the chances of them actually transferring any of that is slim,’ he said.

Coxell pointed out that a judgment call has to be made on whether a client has a stronger connection to the brand or the individual who is joining the company. It is also important to understand if clients will follow and whether they will be able to go out and build new relationships.

‘Some of the pitfalls would be people who claim they have a large book of business and that clients will move with them. If you buy into that, you have to make sure that they cover their restrictive covenants. You cannot get excited that clients will remain loyal despite not being able to talk to them for six months.

‘In our new world with St James’s Place, we want people to absolutely bring over a client bank, but also to have the capacity to support the financial advisers within St James’s Place as well. It is about getting the balance right.’