Irish financial services 2007: Good year/bad year

What was hot and what was cold in Irish financial services in 2007? Here we give our considered opinion...

It was a good year for:

Private banking

Ireland is now the second wealthiest nation in the world. According to the Wealth of the Nation 2007 report by Bank of Ireland's private banking division, the country's coffers swelled by €126bn to a staggering €804bn in 2006.

No surprise then, that international players should be setting up private banking to tout their wares to Ireland's HNWIs. Merrill Lynch and Key Capital (a joint venture with Deutsche Bank) have been expanding, Barclays Wealth has popped up this year and the mighty Goldman Sachs is planning to add an Irish wealth management office.

Still, there remains a dearth of experienced relationship managers to fill the new roles, and there's also a need for increased sophistication to deal with the super-rich, says Marcus Kelly, managing director of MRK International: "There simply isn't a large enough pool to fish from, and we've had to look abroad or to people looking to make the shift from corporate banking.

Funds industry

Another bumper year for the funds industry, but this one is the best since 2004 with funds under administration increasing by 35% to a whopping $1.6 trillion, according to Lipper's Ireland Fund Encyclopaedia.

This has predictably transferred across to the job market and the number of positions created has gone up by "at least" 17%, says Gary Palmer, chief executive of the Irish Funds Industry Association (IFIA). "It was an ambitious and optimistic target and we have exceeded that," he says.

But while jobs have multiplied exponentially, the pool of experienced talent hasn't. Ireland's fund admin employers have been forced to go for less experienced candidates, which means it's been a great year to be a graduate.

Graduates

The Irish funds industry employed 1,000 graduates this year, according to figures from the IFIA, 70% of all employees in the sector are under 30, and Sean Gannon, director of the Trinity College Dublin careers centre, tells us it's been the busiest year he can remember.

And graduates are being shown the money. Entry-level salaries have been hiked up by an average of 17%, according to figures from recruiters Joslin Rowe - to €30k, up from €25k in 2006.

Belfast

It's all happening in the Titanic quarter of the Northern Irish capital.

Citigroup employs 400 in its Belfast tech centre and plans to increase that to 700 by 2009; Liberty Mutual took on 240 staff for a new software development centre in September; and NTNI - the software development arm of insurer Allstate - now employs over 1,500 people.

The real breakthrough, though, was when Bank of Ireland Securities Services (Bioss) announced plans to take on 149 fund administration professionals in the region.

Boiss's managing director Liam Manahan told us he would "welcome the competition" but so far no one has picked up the gauntlet.

And 2007 was a bad year for:

Bonuses

Bearing in mind this Irish financial services industry has a largely back-office focus, bonuses aren't exactly high on the agenda, but that hasn't stopped workers being miffed about the lack of them.

A survey by Robert Walters revealed that 80% of Irish financial services workers were unhappy with their bonus payouts this year and many left immediately after disappointing payouts.

"Many imagine that the hard work they put in over the last year will be rewarded and are then disappointed as they have not been given the chance to put forward their case as to how much they should get," says Keith Garry, HR manager at recruiters Robert Walters.

Finding talent

As you would expect from an industry that posts double-digit growth every year, the difficulty in finding the volume of people required for fund servicing in Ireland continues to plague firms and recruiters.

Ireland's largest fund administrator says it takes on 330 graduates every year. When La Salle Global Fund Servicing announced it was setting up in Dublin and needed 245 staff within five years, recruiters instinctively looked to foreign shores.

Palmer says: "There's no one silver bullet - regionalization, global business models, enhanced facilitation of industry in the education system, guidance coaches. A combination of all of them might help alleviate the shortfall."

Hedge funds

Ireland's welcoming regulatory environment might have fund administrators falling over themselves to set up shop, but it has failed to sway hedge fund managers themselves to the emerald isle.

Hedge fund managers have scoffed at the idea of leaving their Mayfair offices for a Georgian house in Dublin. Mark White, a partner at Dublin law firm McCann Fitzgerald, says: "Hedge fund managers want to be located where other hedge fund managers are, which is London."

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