Financial System Turmoil of 2008

Everyone connected to our financial system has been impacted by the turmoil in 2008. We’ve seen the collapse of large firms like Bear Stearns and Lehman Brothers and the stress on smaller investment firms from declining markets. The turmoil brought many layoffs, hiring freezes, and decisions to wait to hire to see where firm’s AUM landed. Everyone is now asking the question “Are we seeing a market bottom and will the beginning of 2009 bring us down the path to recovery?”  No one is willing to bet on the outcome as there are still problems such as the tangled finances of the hedge fund industry and the uncertainty of the government’s ability to restore commercial lending. Most are hopeful that the majority of bad news has been revealed.

As assets fell in ’08, firms became concerned about their ability to pay salaries, bonuses, and fixed expenses. Some firms used the opportunity to let go of their nonproductive employees, some needed to layoff marketing personnel because there wasn’t a product left to sell – and no one was buying, and some just needed to let their analysts go because of a product collapse. Some firms got creative. In order to save money, I saw a few firms leave their downtown office space, relocate to a suburb and avoid laying off valuable employees. Most firms tried to hang onto their staff and they kicked into high client service mode to help ease client’s fears. Many firms had positioned their clients’ accounts with appropriate long term investment strategies and it was time to review these strategies. Firms also wanted to avoid losing additional assets from clients moving or liquidating their accounts.

How has your community fared?  Smaller cities and communities fared much better than the large financial centers. If you talk to someone in NY they will tell you it’s a waste land of investment professionals from the collapse of major brokerage firms and banking institutions. Most firms were able to hold onto their employees – they just were not hiring. And because there were fewer layoffs, there were fewer individuals that needed to be absorbed by those regions. For example, at Washington Mutual an internal team was given the task of helping employees find new positions, but there were very few investment and wealth management personnel for the Seattle market to absorb.  Many firms are now considering adding positions they hoped to have filled in ’08.

What has IMR been doing in ’08? While there are always hiring searches, 2008 brought tremendous opportunity to talk to and meet with investment professionals. IMR has been receiving resumes and interviewing candidates daily. Some individuals were laid off, some were happy to be holding onto their jobs but wanted to consider a change in ’09, some were curious what was happening at a particular firm, and some just wanted to be informed should a certain opportunity arise in the future. As a result, IMR has a wide reach of exceptionally talented investment professionals around the country from portfolio managers, analysts, senior management, operations, marketing, traders, to client support personnel. IMR is well positioned to assist investment firms in accessing investment professionals now available for employment.

IMR wishes your firm continued success in 2009 and looks forward to the opportunity to work with you in the future.