Core-Asset Consulting - 12-Mar-2021

Nothing retiring about pensions sector as it weathers the pandemic

SCOTLAND’S nimble pensions sector has weathered the worst of the pandemic, while the country’s booming fintech arena has provided a rare lockdown jobs bright spot, according to a new report.

Seismic changes in regulation meant some areas of the pension market continued to recruit even at the height of the first lockdown, while a halt on hiring in other pension-related fields proved temporary – thought salaries have remained static.

Meanwhile the carefully-nurtured fintech sector has started to demonstrate its value to the economy, proving virtually pandemic-proof and seeing rising recruitment, as well as impressive growth in pay rates.

The double dose of positive news has been revealed in the sixth annual Salary Guide into Scotland’s crucial financial service sector from Core-Asset Consulting. The report is a forensic review of current salary levels and a guide to the major issues that professionals need to be aware of.

Louise Powrie, Director of Wealth, Fintech and Pensions with Core-Asset, said 2020 was always due to be a defining year for the pension sector even before Covid struck – with two FCA papers on accumulation and decumulation markets heralding the biggest shake-up in a decade.

She added: “As such, the pension providers, consultancies and new entrants recruited within the proposition and investment solution teams to meet these concerns from the middle of 2020 onwards.”

While volatile markets, saw other parts of the sector halt recruitment, Louise added: “From July 2020, there has been a slow but continual increase of new vacancies across pension and fintech. This may be explained by this sector of the industry being well-versed in a more agile working practice.”

The report says pension actuarial and investment consultancies, saw growth driven by the uncertainty within the economy throughout 2020, with increased demand for experts to navigate pension schemes and liabilities in volatile markets.

With pension buy out transactions remaining high - with around £25-£30 billion taking place – recruitment of experienced pension and investment consultants remained steady throughout 2020, particularly for those with three to five years’ experience.

As a sector that embraced some form of flexible working pre-lockdown, the consultancies were well-placed to adjust to the shift to home working and introduced recruitment interviews via video.

Key roles in high demand included Fund Research Specialists across all asset classes as uncertain markets led to more scrutiny to support investment strategy decisions. Pension administrators were also sought along with Investment Solutions Specialists.

Despite the healthy recruitment picture, remuneration remained static. Salaries levels barely shifted, while for many businesses, bonuses were significantly lower or axed all together.

However, while salary was not the key driver for job hunters, who cited flexible working beyond the pandemic, a strong business reputation and “being part of something different” as the key attractions for a move.

Looking ahead the report says the UK’s commitment to building a greener pension system will driver further opportunities for the sector. Greater focus on ESG strategies will drive a need for experienced investment consultants and research specialists.

Meanwhile the growth of DB “superfunds” will increase demand for pension consultants and actuaries from mid-2021. A likely increase in insolvencies and the aftershock of the pandemic will drive demand for compliance/legal and technical pension specialists.

Despite the success of pension auto-enrolment, contributions are not enough to meet retirement needs, particularly for women. This means opportunity for marketing professionals and website user experience experts to produce engaging, easy to understand communications.

The Fintech sector enjoyed continued growth as it provides tools and software solutions to meet the needs for more user-friendly platforms and applications. With more than 150 established firms now operating in Scotland, demand for talent centred on artificial intelligence and automation.

Flexible and remote working is the norm and the recruitment was unabated throughout 2020. Key demand laid with developers, particularly those with cloud technologies and technical architects. Business Analysts, Developers, and Solutions Architects were also in demand

Continued growth meant Fintech saw spikes in salaries of around 20% with salary inflation to tempt talent. Continued demand is inevitable. From supporting the pension industry through the design of more engaging and user-friendly apps and platform solutions to supporting with complex reporting and data needs on climate change for pension and investment consultancies, growth will exist in 2021.

Core-Asset Consulting was formed in 2005. Based in Edinburgh, it is now an £14m business employing 22 people and works across the entire financial services sector, from the smallest boutiques to the biggest global players.

Initially the firm carved its reputation in Scotland’s globally-renowned asset management sector. However, the success of its model allowed it to expand across the wider financial services market. It now boasts dedicated accounting, investment operations and finance teams and also works in Scotland’s thriving legal sector.

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ENDS