While the layoff drumbeat grows ever louder, the range of functions and market segments cushioned against fallout from the financial crisis seems to shrink ever smaller.
The latest high-profile layoff announcement, from Credit Suisse, did point to one clear haven: private wealth management. While slashing 5,300 investment bank jobs, the Swiss bank said Thursday it will continue to "judiciously invest" in growing its global private banking business, where it's already added a net 370 relationship managers during 2008. London-based headhunter Armstrong International recently cited private banking as one of two areas where year-end bonuses may decline less sharply than elsewhere in 2008. (The other is foreign exchange, where banks are expected to strengthen their desks in 2009.)
Other pockets of resilience we've noted lately are:
Legal and asset valuation work associated with both civil and criminal cases against financial firms and their executives.
Industry-watchers expect a boom in lawsuits over everything from predatory lending practices to balance-sheet write-downs. That's driving demand for accountants and other finance pros with expertise in valuing complex assets. With at least 26 firms currently under investigation by the FBI for possible sub-prime and other securities fraud, 50 open SEC investigations on that subject, and at least a dozen former Lehman Brothers executives reported to have received grand jury subpoenas, the criminal-defense bar is shaping up as a substantial buyer of finance expertise too.
Financing international trade shipments.
As big global banks pull away from all forms of lending, a variety of smaller niche players are boosting their presence in the $14 trillion global trade finance market. They must tread carefully, however. Yes, such loans usually are secured by physical goods. But so are mortgages - and look what happened to them. Still, even as the recession compresses world shipping volume, the shift of trade finance business creates opportunities for financial professionals skilled in evaluating credit risk or reviewing import-export transactions.
Compliance and regulatory work.
It's long been reported Wall Street's meltdown and ensuing taxpayer bailout will lead to stepped up regulation and heightened emphasis on compliance within institutions themselves. The government is expected to bulk up its teams that inspect financial institutions and manage assets under various federal programs new and old. That augurs plenty of hiring down the road by the Treasury, the Federal Reserve and other agencies with authority over financial firms and assets.
As far as compliance hiring within the private sector, so far the evidence is mixed. The bailout law itself imposed scant new requirements on aid recipients - which is understandable in view of the urgency to get the law passed. And as one eFC user commented this week, "Many firms talk a good game about Compliance being important, but when push comes to shove, they would rather keep one more trader than one more Compliance Officer."
Still, the SEC itself just warned institutions against cutting corners in this area of their operations. "While many firms are considering reductions and cost-cutting measures, we remind you of your firm's legal obligation to maintain an adequate compliance program reasonably designed to achieve compliance with the law," Lori Richards, who heads the agency's inspections and examinations team, says in an open letter to chief executives of financial firms posted on the SEC Web site.
Global recruiting firm CTPartners flatly predicts, "New regulations will require compliance and legal experts." Head of Compliance ranks eighth on its annual list of hot executive jobs, after such entries as restructuring office, turnaround expert, distressed asset manager, workout specialist and bankruptcy attorney. (As detailed in our last column, some of those workout-related jobs haven't panned out well thus far - mostly because financing for bankrupt companies has dried up, and many distressed-investors bought assets too early.)
The emerging climate will magnify the value of reputation for both employers and individual professionals. To remain marketable, you'll need a squeaky-clean ethical record and image. In aftermath of the 1980s insider-trading scandals, a number of professionals who'd worked in tainted houses like Drexel Burnham Lambert succeeded in maintaining their careers and soon ascended to prominent roles elsewhere. Rather than presumed guilty by association, those individuals actually raised their reputations through whistle-blowing or otherwise dissociating themselves from colleagues' improper activities. That remains a viable option today.