The Biggest Problem in Financial Services M&A? People

The biggest issue facing financial services M&A isn’t the lack of financing or the pending fiscal cliff. Finding good people to manage businesses is the biggest problem in financial services, according to executives at the Financial Services M&A Symposium

“It’s unbelievable the lack of managerial talent [available] across the financial services industry,” said one private equity executive. “Mediocrity is the norm. It’s a challenge to find great management teams.”

“They make up for it in ego,” another PE exec quipped.

Financial services is bloated with people, the first source said, but it’s still hard to find good staff. A generational talent gap is causing the lack of talented people, the person says. The environment has changed in the last five years in terms of regulations, compensation and technology and people aren’t adapting, the exec said.

Finding staff isn’t hard, the person said. “Finding great management to run companies today is difficult,” the source said.

Photo courtesy of Shutterstock

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  • The lack of talented people is everywhere from VC/PE associates, designers, hackers..EVERYWHERE and not just the financial services industry. I believe part of the difficulty lies in the criteria for recruiting. Simply being from Harvard, Stanford or Whorton shouldn’t be the standard for “Top recruits”. Finding talented management has little to do with your pedigree, but rather a way of thinking. Future management needs to be both analytical and creative. Those types of people are the minority. Often times recruiting for management is a quick glance over a CV’s first paragraph if that. So recruiting in itself needs to evolve or stay in the same trap of sourcing more mediocre candidates. There are plenty of great management teams that could be built, but yes like the proverbial needle in a hay stack… you actually have to take some time looking.

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