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The financial services market has changed more in the past three years than in the previous decade.
That’s the view of Matt Jenkins, Partner at the executive search firm Syracuse Partners, which has been working closely with Dolfin since 2013. “Each year has seen very specific trends, such as the emergence of start-ups and new entrants across the wealth management sector,” he says.
“Boutique firms realise can offer something different, and let the banks work for them.” – Dan Scatola, Syracuse Partners
Jenkins’s business partner, Dan Scatola, agrees. “Many players in the market believed that they would be able to take advantage of an exodus from the big banks following the crash,” he says. “But they didn’t achieve that to any significant scale. It’s only in the past three years that we have seen that trend change, as boutique firms realise that they don’t need to compete with the big banks; they can offer something different, and let the banks work for them.”
Beyond the big banks
One candidate who once moved from a major bank to a boutique wealth manager was Georgios Ercan, Dolfin’s Head of Sales, who says: “The way and frequency of bankers moving between employers has greatly changed post the 2008 financial crisis, RDR and MiFID. Servicing clients as you once did has changed in the banking sector, with ever-growing management layers and the bank’s strategy and needs coming before the relationship the banker has built with their client.
“Expensive cost structures have made it very difficult for affluent and high net worth clients to get that tailor-made service from big banks.” – Georgios Ercan, Dolfin
“Client needs haven’t changed – client service levels have changed and will continue to change as banks enter into an era of identifying which client segments they want to serve and specialise in going forward. Expensive cost structures have made it very difficult for affluent and high net worth clients to get that tailor-made service from banks they once used to receive – whereas ultra-high-net-worth clients, are the prime beneficiaries due to their global banking needs both for private and investment banking.
“For years, our mantra was that the people with the best talent will win,” Jenkins says. “And it still is – but we believe that centralised functions and evolving technology will nibble away at that.”
“We see some established businesses whose clients don’t want anything online,” Scatola says. “But although that is changing as the next generation emerges, in a people business, people will always deliver the solution.”
“Swift automation, with a tailor-made approach to wealth management, is what clients need.” – Georgios Ercan, Dolfin
However, bankers’ needs are also changing, Ercan says. “At Dolfin, we have attracted a different kind of talent: young, polyglot and solutions-focussed, and we have provided them with tech enabling solutions to match all client segment needs. Swift automation, with a personal tailor-made approach to wealth management, is what clients need during this period of generational change. Research by Cerulli Associates shows that in the past three years, multi-family offices have grown by 10 per cent a year, compared to only 2 per cent for traditional private banks, and this trend is likely to continue. At the major banks, direct and indirect costs are high and bankers find it hard to be profitable with unexplainable overheads hitting their scorecards. As such, many are looking to move because they feel disenfranchised, and a client-centric and agile business like Dolfin provides a significant pull factor.”
Often, the lure of a young, nimble firm is enough to attract talented people. But what about their clients?
What price loyalty?
Life at a boutique financial services firm is not for everyone, says Scatola. “The biggest challenge we face when hiring for boutiques is the lack of activity. You start a new job at one of the big banks and your calendar will be booked solid with meetings for weeks. At a boutique firm, you start with an empty diary. The business is personality-driven, and that makes it harder to excel. So we have to look for the right culture fit, and that means that most of our job is telling people not to move.”
But if a candidate who seems to be the perfect fit is deliberating whether to make the leap from bank to boutique, what factors will influence their decision?
“Often, bigger firms lose out on great candidates because they lack the ability to tell a story.” – Matt Jenkins, Syracuse Partners
“People’s appetite for rewards varies immensely,” Scatola says. “Some people like recognition. Some want status in the form of a job title. Some want money – but not all. Many people feel they don’t need to make any more money. Incentivisation is a hard thing for any business to get right.”
“We rarely lose a deal over compensation,” Jenkins agrees. “You lose it for fit, culture, lack of vision or strategy. Often, bigger firms lose out on great candidates because they lack the ability to tell a story.”