Global Markets Equity Landscape - Five Leadership Trends for 2022

Looking at the year ahead, we believe a handful of developments and trends will impact leadership & talent strategies within Equities.

As you handle significant talent challenges, embrace technology, serve customers, and confront fierce competitive fires, watch these five trends:

1.??????Communicating with Clients Post-Pandemic?

With continual breakthroughs in AI and technology, it’s essential to use these advances to communicate and deliver insights to clients quickly and with impact. The challenge lies in determining how to employ technology across the business most effectively to build relationships with new and old clients.

?? Significant changes are occurring already. In some instances, delivering more self-service is the answer, allowing clients to click the options they favor, and AI sends out that information. In other instances, it is best for AI to identify what clients and prospects are reading and dispatch the appropriate information.

?? As for client prospecting, we see webinars and virtual meetings being used more often to reach more target audiences and share communications. This is also providing an opportunity for firms to conduct more idea-sharing conversations with clients, bringing along an equity research analyst or specialty salesperson to gauge client sentiment. We also see firms pivoting content towards emerging client interests and looking more to new parts of their business. This is also providing more collaboration and productivity internally - salespeople are embracing computer bots and models to boost productivity, advisory sales groups are partnering with capital markets and banking to cover clients holistically, and sales is teaming more closely with equity research and economic strategists to identify and discuss trends at a macro and individual client level.

The outcome: Successfully connecting with clients after COVID-19 ebbs.

2.??????Human-centered Design in a Hybrid Work World

The concept of human-centered design implores organizations to focus on engaging ways to make people and teams work more effectively rather than concentrating on products or opportunity sets. It’s a balancing act between in-person collaboration and working autonomously to avoid disturbing the flow. It is imperative to get the balance right between working from home and in the office.

?? In general, we see position traders back at their desks full time while sales traders are working in the office four times each week and salespeople are making it to the office two or three times a week.

?? For research analysts, it may prove most effective to let them work from home during earnings season, the busiest time of year. The point is that the focus should be on a team’s individual needs to determine what works most effectively.

The outcome: Besides productivity gains, retention of star talent and recruitment of future stars.

3.??????The Shifting Equity Landscape.?

If we look at the equity landscape in three tiers, the “bulge bracket” banks, middle market firms, and smaller broker dealers are poised to face unusual disruption over the coming years. While the bulge bracket firms have a leadership position and will remain at top of the league tables, we see a real focus on capturing the SMID and mid-cap wallet where the other two tiers spend time and have some specific sector and/or product specialty to offer.

?? We anticipate additional acquisitions from the bulge brackets as they continue to get bigger, but potentially the most activity segment of the market will lay with the middle market firms who are acquiring smaller boutiques at a much higher rate. Bulge brackets have a greater risk of losing teams as the top performers are spinning out to create their own independent boutiques.

As firms in each of these tiers navigate the shifting landscape and competitive trenches, they will need leaders who can develop imaginative and innovative strategies, including digital transformations.

The outcome: Coming out on top as the sector reshapes.

4.??????Generalists or Specialists?

Today’s environment requires mastering cutting-edge technology. As clients continue to expect and favor a multidimensional sales professional who can save their time with a single touchpoint, it is increasingly important for financial services companies to foster a culture and a structure that inspires cross-selling opportunities between teams and products. In addition to this being what clients are expecting, firms can also save costs because it is too expensive to hire a product specialist for everything. With their breadth, generalists are best prepared to handle the unanticipated changes of this uncertain and fast-paced environment.

?? Moreover, we see firms hiring more sector specialist sales professionals, especially around the hot sectors, including technology and healthcare. This talent provides solutions across multiple products (prime brokerage, derivates, etc.) with a keen understanding of the relevant nuances within their sector.

The outcome: Better service, lower costs.

5.??????Rise of the Disempowered Leader.

Traditionally, in the equity industry, the leaders/rainmakers have positioned themselves to be the ultimate coach who “runs the show”. It was essential to be direct, on top of things, and excel as a manager. However, we are seeing a new type of leader emerging: Leaders who empower others, exude empathy and steer as little as possible to give their teams enough rope to, well, succeed or falter.

?? These leaders have high EQ and master active listening. This vital skill set creates an organizational culture that inspires innovation and collaboration. It creates an environment where the more junior talent feels empowered to share ideas to close the traditional hierarchal gap. As a result, this leadership approach embraces the bottom-up strategy, rather than solely focusing on the top-down.

The outcome: Better ideas with a stronger leadership pipeline.

What’s clear is that the landscape for equity leaders has quickly become one of reinvention and innovation, as these significant trends attest.?

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Authored By: Elisabetta Bartoloni, Head of Global Markets, Americas and Shannon Bade, Engagement Manager, Global Markets at Heidrick & Struggles