Brooke’s note: On Sunday, the New York Times ran an article about a “remarkable recovery of the biggest brokerage firms.” Aside from providing interesting information on a world that runs parallel [and vertically at times] to RIAs, it sparked me to find out if registered investment advisors are on a similar hiring jag. The hiring being done by RIAs turned out to be more interesting and intense and I wrote:RIAs are rushing to take advantage of a fire sale on talent. But I still decided to run a synopsis of the NYT article as a briefing for advisors. The facts laid bare don’t seem all that remarkable — at least not compared to what’s happening with RIAs.Here are the key points in that article.
1.) Employment reached a nadir in February and since then New York securities firms alone have added nearly 2,000 jobs. The number of financial industry employees in New York has shrunk by more than 28,000 since its peak in January 2008, but is still slightly above its level in 2003 after the tech bubble burst. This places financial services employment where it was in late 2005 levels; employment in the overall economy is still stuck at about 2004 levels, according to the NYT article. Employment in the securities industry in New York was at 160,400 in May, up from the trough of 158,500 in February, but still well below its peak of 188,900 in January 2008, according to data provided by the state comptroller’s office to the NYT.
2.) Though the addition of 2000 jobs is tiny compared to overall Wall Street employment, it is a sign that hiring will be more robust in coming months. “I think we’re seeing some hiring in anticipation of better times,” said Rae Rosen, a regional economist at the Federal Reserve Bank of New York to the New York Times. “Wall Street typically hires in anticipation of the recovery, and there is a sense that the economy has bottomed out and is slowly improving.”
3.) The upturn in hiring comes nearly two years after many of the biggest banks and brokerage firms were bailed out by Washington in the fall of 2008. It also comes after New York Stock Exchange mebers racked up record profits of $61.4 billion in 2009, according to the NYT article.
4.) The shift in Wall Street’s labor market comes against a bleak back drop. The number of jobs has shrunk by nearly 14% in manufacturing and by 22% in construction since 2008. The financial industry nationwide has held up reasonably well at with an 8.5% decline, according to the NYT. Its moderate declines contrast with white-collar professions like law; unemployment in those kinds of professions [what kinds were not specified] was at its lowest since late 2001, according to data from the Bureau of Labor Statistics gathered by the NYT.
5.) The hiring pick-up is making for a hot market for talented professionals, Richard Stein, president of Global Sage, an executive search firm, told the NYT. His corporate clients made offers of $1 million or more annually to 12 job prospects in recent weeks, he added in the NYT interview. “The offers are not near where they were in 2006, but there is still a war for talent,” he said. “Everyone thought the ice age had returned, but the thaw has come and we’re in catch-up mode.”
6.) Here are some examples of hiring by Wall Street firms tallied by the NYT. Morgan Stanley hired 100 private bankers for its wealth management business but is holding off on plans to hire 400 more including 100 traders. Credit Suisse’s investment bank filled 600 positions. Nomura of Japan hired several top bankers from Deutsche Bank. Nomura’s New York-based securities unit grew its staff to more than 1,700 – up from 1,000 in March 2009. The bank says it will hire 300 more workers by March 2011, according to the article.
Macquarie, an Australian investment bank, added six fixed-income traders in New York last Thursday, and it planned to announce the hiring of six equity traders on Monday, the NYT article said. Centerview Partners, a boutique investment bank that specializes in corporate advisory work, hired 10 bankers for a total of 75.