As a result of slower rates of growth, uncertain markets, and increasing regulation, recruiting work across the industry moderated following the market drop in mid-February. As Wilbanks Partners continues to work with and consult to hundreds of executives across the industry, there is a clear note of caution about the future. It is interesting to note that new project inquiries continued at the pace of Fall 2015, but slowed decision making and commitments to new hires were widespread. We believe that this conservative posture on expense management is appropriate, though it prolongs the process to address talent gaps and infuse new ideas and skills that will ultimately be part of the solution to get the business back on track.

A corresponding phenomenon was continued restraint on compensation expectations, particularly with regard to new hires. It remains rare for firms to offer large signing bonuses or second-year guarantees (except to buy out earned but unvested compensation).

There are significant exceptions to these trends, particularly amongst alternatives firms and the largest index players. Despite the continued strong flows to many firms in the alternatives business, the performance issues in many hedge funds over the trailing 12 months, and early signs of pushback on fees by some of the largest asset owners, are leading to a note of caution there as well.

We have observed a significant continued shift towards institutional client facing roles, sales and client portfolio managers in particular, away from the retail segment. This is not surprising given the turmoil amongst the larger retail wirehouses, and the concern about the impact of the DOL ruling.

The consistent march of increasing regulation was particularly noticeable in the impact of various rulings and proposals surrounding mutual fund governance. The role of the mutual fund Director continues to grow in complexity as the SEC is essentially using the Board as an extension of its authority and oversight. We released a best practice review of mutual fund director recruiting based on our recent work in the field, and it was published in part by BoardIQ/Financial Times in April.

We look forward to staying in touch across the summer and being helpful on recruiting or market intelligence matter. Please call or e-mail George with any questions on market intelligence, as this continues to be a significant benefit for all our business partners.