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
