Every day I am asked the same question, “What do you see as the future for our industry?” My answer is always the same, “We are not seeing a consolidation of the industry, we are seeing a changing of the seats.” In my opinion, that in a nutshell, is what is happening. Good firms are always hiring opportunistically nationwide and are not afraid to open new offices to accommodate good bankers. While at the same time there are “RIF”ing (Reduction in Force) bankers that just rely on their business card to get them bond deals.
To the outsider the public finance industry looks like firms are reducing their numerous bankers at all levels. When in reality what’s occurring is that the firms are doing one of the following: exchanging bankers, removing the bankers that are not confident in their abilities, or their ideas to generate new business for bankers that are confident with their ability to generate consistent revenues. Those bankers that are just relying on getting business from rotations are the ones that are losing their positions, or choosing to exit the business, because their compensation is not what it used to be due to the lower payout and price per bond winning bids.
Another trend that we are seeing is a move to more specialized bankers rather than generalists in the public finance industry. A banker that specializes in a particular field is more in demand than a banker that covers a broad spectrum of areas. The reason for this is because they own their space. When you are the “go-to” person, business follows you wherever you go or whatever firm you associate with. For example, a Charter School banker will be in more demand for a firm than a banker that just does general municipal work. The reason for this is they are in 100% control of their business and companies want that type of employee.
Another reason I am very confident in my above statement is because in the public finance industry more Investment Banking Firms are applying for their Municipal Advisory registrations. This causes them to be on the active lookout for Financial Advisors that want to join an Investment Bank, or for Public Finance Bankers that want to do FA work but are prohibited from doing so at their current firm. Even the stiff MSRB requirements are not de-railing this effort of bankers/FA’s looking to move their practice.
About Harlan Friedman, JD & Founding Member, H. Friedman Search LLC. Harlan is a thirty-year veteran Public Finance Banker turned recruiter who specializes in the placement of all level Public Finance Bankers, Health Care Bankers, Municipal Financial Advisors, Compliance Officers, and Bond Counsels. He can be reached on LinkedIn, at firstname.lastname@example.org or 760-477-1284.