There is a very competitive ‘war’ for the best talent, and this is pushing up some salaries.

Besides the election, this year is throwing new challenges to the nation’s wealth management industry. An immediate challenge is for leaders to keep their teams safe and well given continuing high COVID numbers – as well as engaged given the so-called ‘great resignation’.

Working from home has created new challenges for wealth management human resources (HR) teams, with the ‘great resignation’ seeing many people more open to moving, notes Darran Irving, Senior Consultant at Super Recruiters and the SR Network, a HR consulting service to the wealth management sector.

Mr Irving says: “Many wealth management organisations are striving to get back to where they were before COVID. Returning to where we were is no longer an option. Wealth managers need to be transforming themselves into the workplaces of the future,” he said. “If they don’t others are, and they will be the new leaders.”

“Employees have experienced the benefits of flexibility and they don’t want to lose that – and will move to organisations that offer that flexibility. This even includes some senior executives.

“This is why it is harder for many organisations to find suitable candidates to fill the roles they have. Candidates are being more selective than they ever have before, more selective beyond the salary dollars.”

Mr Irving suggests: “To retain people and attract new ones, wealth managers need to offer flexible work, especially in terms of where, be it a mix of at home and in the office, and how often.

“The trend in the industry is to three days in the office and two working from home. Though it varies from one organisation to another and department to department.”

Wealth managers need to transform people approach

Mr Irving said the second most important way to retain and attract good people was to develop a culture where employees were valued.

“Our people want – and need – to feel more valued, more valued than they ever have before. This requires new skills for some of our leaders, such as increased empathy towards their people and rewards in ways other than money.”

“A key aspect of this transformation is the development of an over-arching vision of what the organisation stands for, why it exists, and where the c-suite and their people want to it to be in three to five years. And developing this with their people, so that everyone is engaged and working towards the sake goal through-out the organisation.

“This is not about stating the objective is greatest possible returns for investors, but rather how those returns are generated. And what additional value the organisation adds.”

“Those organisations that can articulate and demonstrate such purpose are attracting more of the best candidates as well as retaining their people from external poaching.”

Mr Irving noted: “Look at what is already happening in the tech and software space in Australia in terms of war for talent and skill shortages. For example, key projects I am championing at MNF Group, a software company, are bold retention and recruitment programs. It’s a preview for wealth management firms.”

SR Network sees itself consulting to more and more to wealth management leaders on how to keep their people. “There is a very competitive ‘war’ for the best talent, and this is pushing up some salaries,” he said.

The post How wealth managers can avoid losing key people to the great resignation appeared first on AdviserVoice.

The people merging process has to become much smarter, much more transformative.

The pace of mergers in the superannuation sector is forecast to rise this year – and impact more people in our industry than ever before.

Superannuation funds MTAA Super and Tasplan recently announced they will be known as Spirit Super after completion of their merger on 1 April 2021. Spirit Super will be Australia’s newest industry super fund and have some $23 billion funds under management with 326,000 members.

LGIAsuper and Energy Super are expected to finalise their merger as early as this July, with the resultant group having $20 billion in FUM and 120,000 members.

Late last year QSuper and Sunsuper announced they will also merge, creating one of the largest funds in Australia, with combined assets of about $182 billion – putting it ahead of Australian Super and its $170 billion in FUM.

Other super fund mergers underway include NGS Super and Catholic Super, Media Super and Cbus and the completed merger of WA Super with NSW-based First State Super to become Aware Super.

KPMG estimates that this decade will see a 60% fall in the number of funds and estimates that in five years’ time, the current 217 APRA-regulated funds will have shrunk to 138, a faster pace than M&As in the retail industry.^[1]

Industry people specialists the SR Network and transformation specialists Whitewater Transformations see the biggest challenge of these mergers in bringing not members and funds together, but in how they merge their people.

Cathy Doyle, Chair of SR Network (including SuperRecruiters, SR Consult and SR Research), said it was not a matter of one fund group subsuming another, nor merging two groups of people into one entity, but rather “creating a new entity and determining who were the best people for it in terms of capability AND culture”.

“For example, mergers result in two potential CEOs, CFOs, other C-suites and range of management and teams,” said Ms Doyle. “How does the new entity decide whom is the best?

“It is no longer appropriate to simply offer redundancies and see who takes it and who remains,” she said “The people merging process has to become much smarter, much more transformative.”

Adam Salzer, Partner at Whitewater Transformations, said: “Funds spend a great deal of time, years, considering and then working on the pros and cons of their M&A; but not enough on how they will actually bring two workforce’s, two systems, two cultures together.”

Mr Salzer suggested: “Rather than favour one of the existing fund structures over the other, the best way forward is to create a third structure, one that would create and take the merged entity well into the future and best meet members’ needs.”

Ms Doyle said: “This requires independent assessment, no favouritism, of whom would take the new structure forward best at all levels in terms of technical capability as well as cultural appropriateness.”

She added that as funds keep coming into the new entity, there is not as much pressure for significant change and transformation as there are in the M&As of other industries. “Good leadership recognises this and the need to improve and build a business that is future fit.”

“Leaders have to have independently assessed which employees will best add value to the new entity, rather than just trying to keep every role,” said Ms Doyle.

Mr Salzer estimated that, at present, “some 40% of financial services organisations are doing well, 30% are holding on and some 30% will not survive long term”.

He said he believed there would be two types of organisations going forward in financial services:

• Inward-focused organisations and leaders that seek to repair the damage caused by COVID, cut-costs and make operational tweaks to get back to where they were before the pandemic, and those that are
• Outward-focused organisations and people whom embrace the opportunity to rebuild for the future, become more innovative for the changed world.

These two types will retain and attract very different types of employees and human resource departments responses, said Ms Doyle.

———

[1] Superannuation fund merger insights

The post Increase in fund mergers requires increased focus on people  appeared first on AdviserVoice.

“When the pandemic ends this will turn around rapidly and companies will scramble to rebuild their teams.”

While the nation-wide impacts of the COVID-19 pandemic will result in a surge in unemployment in our wealth management industry (with forecasts of over 11% national unemployment), some planning groups are still hiring – as regularly reported in the trade press.

Casuals were one of the first segments to be let go, with contractors soon following, notes Super Recruiters.

That said, the specialist wealth management industry search firm notes there are still roles that need to be filled – with demand still solid for experienced financial advisers. “There are several high quality financial advisory groups that are taking this as an opportunity to shore-up their business and even grow.”

Super Recruiters notes that demand is strongest for qualified planners that can bring a book of clients with them to a new home. Salaried roles are a less in demand.

How do you hire while maintaining social distancing?

Social distancing means that the industry’s hiring, management and engagement processes need to be altered, Super Recruiters suggests, noting that there are ways to recruit without actually meeting people face to face. “And these ways actually work better than traditional hiring methods.”

Research by LinkedIn found that traditionally the majority of candidates hired are selected on ‘gut feel’, despite the fact this is successful^[1] only one in seven hires. These are low odds for success and investment owners and managers would not invest in a company with those odds. Yet this remains how most financial services HR departments hire. The fact is that traditional resumes and job interviews alone are poor predictors of actual job performance; as interviewees give rehearsed answers and interviewers pick candidates they like rather than those whom have a proven track record of delivering results.

Almost two-thirds of HR teams admit their traditional interviews failed at assessing candidates’ soft skills, according to the LinkedIn research. “Now is a good time to transform this!

The solution

LinkedIn also notes that over three-quarters of candidates find their next role through a contact. Inhouse HR, which is rightly increasingly undertaking their own recruiting, needs to recognise this fact and harness it. This means that upon receiving a role brief, HR departments should search for whom would be best at that role, who has excelled at it in the past – and then reach out to them.

Wealth management organisations now more than ever need the best in the industry and those in the industry know who they area, those who can deliver results – and the only way to assess that is through referrals. Start this referral process even before seeking resumes.

“Cashed up companies are seeking to bolster their talent pools – but on a selective basis.

“When the pandemic ends this will turn around rapidly and companies will scramble to rebuild their teams. Those companies that have treated their employees with care and respect will come through this period well positioned and will be viewed as employers of choice.”

——–

[1] Over more than two years of successful service

The post Wealth industry unemployment rising, but some firms selectively hiring advisers appeared first on AdviserVoice.