By Chris Glynn
The ongoing growth in the U.S. retail bank industry is going to result in increased professional migration from institutional investment management to private wealth. Cue Paul Ciancarelli, partner with boutique retained executive search firm David Barrett Partners.
Headquartered in Boston, DBP is a financial industry company specializing in asset management and –for Ciancarelli himself – private wealth. Ciancarelli has been involved in searching for both distribution as well as investment talent.
Ciancarelli started his Wall Street career as an executive recruiter for staffing and recruiting company CTPartners, becoming a principal for its financial services practice. He then moved to Korn Ferry, a global organizational consulting firm, where he eventually rose to senior client partner in asset and wealth management while searching for and placing worldwide distribution, marketing and product personnel as well as senior-level and C-suite personnel.
Beginning as partner with DBP in 2021, Ciancarelli sat down with Institutional Allocator by Markets Group to talk about the current state of private wealth hiring.
Markets Group: Can
you describe working for David Barrett Partners?
Paul Ciancarelli: We are a boutique executive search firm specializing in senior-level recruiting within asset management as well as wealth management. We were founded in 2005 and have 18 people in New York, Boston as well as London.
Our expertise can span to C-suite and senior-level recruiting in traditional and alternative investment management, wealth management and asset ownership, such as endowment and foundation, sovereign wealth and the family office industry.
I have experience recruiting in the space and joined DBP a year ago after spending [a] previous six-year stint [with] Korn Ferry.
MG: Can you give us a rundown of the private wealth or registered investment advisor industry? What role is the most popular?
PC: We are seeing a high demand for chief investment officer or deputies, as well as heads of portfolio construction, heads of investment research, and asset allocation professionals. On the growth side, several clients have recently upgraded or created new roles for a chief revenue officer or chief growth officer.
I think driving new hiring is the need for succession planning – especially at founder-led businesses. Also, the desire for a centralized investment offering including scalable, but customized, investment programs to help the investment advisory more efficiently service their client base and focus on growth.
MG: How would a registered investment advisor or private wealth organization evolve their recruiting?
PC: Our clientele embraced the video-based interview for round one or round two – or round three – of the interviewing process. They usually insert “in-person” interviewing in the latter or last step of the interview process.
While admittedly interviewing over video has its shortcoming, businesses have found them beneficial given the volume of hiring and the overall capacity of people.
Today, private wealth has a large focus on diversity. A private wealth company is using a more progressive approach to recruiting to meet a more diverse candidate slate. We work with clients to understand their “must haves” and “nice to haves” while also focusing on attribute-based recruiting (as opposed to proven experience). This includes thinking creatively about adjacent talent pools and “step up” candidates. Clients are recognizing the importance for strong onboarding and development of talent as a result.
MG: What is the top senior-level talent looking for in their next career move?
PC: Compensation and flexibility are important. We live in a competitive and candidate-driven market, meaning each candidate has leverage. Most of the “top talent” we speak to are exploring more than one position. A candidate will usually place a premium on base salary plus a targeted bonus, but certain people are willing to forego “guaranteed” compensation to partake in future upside via equity.
Candidates are also seeking increased scope and career responsibility. Again, we live in a candidate-driven market where top talent is less likely to consider a “lateral move” unless they are motivated to leave their current employer. People are looking for a long-term career destination where they can build their career over a longer period.
Flexibility is another big attribute. The pandemic has altered the playing field and expectation, relating to work from home versus working in office. Most people are looking for a hybrid or balanced model where they can be in the office between three and four days per week and work from home once or twice per week, with the flexibility to dial up and down based on current workload and personal/professional requirements. Flexibility and a sense of balance has become “table stakes” for many candidates. Firms that are operating with a rigid “five days in the office” approach are at a meaningful disadvantage.
MG: What has been the influence of the family office space in private wealth?
PC: We have strong wealth creation over the past decade for the family office segment, which is growing and a major source of hiring activity. The family office has grown in sophistication and is looking for senior investment talent to professionalize their investment platform. We have also seen an uptick in COO hires from this segment.
On the flipside, we have helped asset management businesses hire senior distribution talent to sell into the family office and multifamily office channel. The activity is widely viewed as an underpenetrated but high-growth opportunity for alternative asset management.
MG: What is the best positioning to find a job within the family office industry?
PC: Since the family office is under the radar and hire only based on word of mouth, networking in the space is highly recommended. A family office is all unique with some interested in fund investing, while other prefer direct or opportunistic investing to complement the existing portfolio of the principal founder. It may take time to find the right fit. For some family offices, the actual pedigree can be less with more a focus on trust, loyalty and competency.
MG: What is the overall trend seen in hiring for the family office industry?
PC: There is a big demand for any candidate who has private equity experience, both doing co-investments as well as direct dealing. Private equity is more tax-efficient, with each principal understanding owning operating companies.
MG: Finally, what is the most interesting development in recruiting, as far as technique or initiative?
PC: The family office space has started to offer carry or phantom equity as an incentive. In order to attract private equity talent, a family office will have to pay at or close to private equity market compensation. Many private wealth or asset management businesses have altered their interview process for good by embracing the virtual interview in the early to mid-stage, followed by in-person meetings in the late or final stage. Both the manager or candidate are still working through their own personal preference as it can relate to working remote or being in office. With that said, most of our clientele prefer each employee to be in at least three days per week, with others expecting people in four to five days. Flexibility and balance appear to be the expectation amongst candidates moving forward.
*Elizabeth Havens of David Barrett Partners added her help about the family office industry