David versus Goliath in fund administration

Thinking of making the move into fund administration? How do you make the choice between big and small?

Options

The middle ground is fast disappearing and the divide between large and small has never been greater, according to research from the Aite Group.

Ireland boasts some of the biggest fund administration names in Europe - such as State Street, Bank of New York and Citco, whose employees number thousands. Then there are the smaller firms like Custom House, Apex Fund Services and Admiral Administration, who often employ around 30 people.

The Irish Funds Industry Association has 84 members, offering a bewildering choice of behemoths and boutiques.

Cash

If you have euro signs in your eyes, the bad news is that pay is pretty much on a par in both types of organisations at a junior level. However, recruiters say boutiques will pay above the odds for the right senior people - the assumption being they are sacrificing bigger business volumes and relative security of brand names for bigger packages.

Meanwhile, bonuses come in at 5-20%, depending on your position, but this might not be the same across the board.

Paul Cotter, managing director of recruiters Joslin Rowe, says: "In the good years bonuses in the smaller companies can be very high, but the bigger organisations offer consistency."

Client exposure

Gavin Nangle, head of business development at State Street, says: "It's inevitable that you gain a broader range of experience, dealing with a very diverse client base across all types of asset classes in a larger organisation."

But this is a line toed by the smaller firms as well. As John Bohan, managing director of Apex Fund Services in Ireland, reckons: "Our employees are given access to the client from the word go. It gives them a lot more empowerment than in a larger organisation. They're not being put into a production line process, and being asked to do one thing."

Fearghal Woods, director of business and product development at Bank of Ireland Securities Services (BOISS), maintains that the firm operates with a boutique mentality, but has the financial clout of the parent organisation behind it.

Training

The resources available to the larger organisations mean that rigorous training programmes are in place. So, as well as technical training, State Street offers soft skills development like presentation and personal development.

"It's no longer just about the money," says Nangle. "Candidates are now asking us about what systems we have to facilitate career objectives."

Meanwhile, Apex says it attempts to offer training where necessary, but filters candidates through an aptitude test.

Bohan remains unimpressed by big firm training: "We've had candidates who couldn't tell us the debits, credits and performance fees, and they've been working for a large organisation for four years.

Career progression

Predictably, advancement is regimented in the larger firms. "We do have a lot of promotion or rotation plans in place. Where appropriate employees can be moved to other areas of the business or given a promotion and this typically happens on a 12-18 month cycle," says Nangle.

So this means there are fewer opportunities in boutiques, right? Not according to Bohan: "Our organisational structure is the same as you would have in bigger firms - fund accountant, senior fund accountant, account manager, senior account manager, operations manager, MD - but it's a shorter route to get there."

Woods says BOISS offers more unique opportunities: ""Employees also have access to the larger group network. If they wanted to work in the fund management, treasury, corporate banking or corporate finance areas, they would have the opportunity to switch. Most fund administrators in Ireland only work in that area."