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Today New City Initiative is comprised of 43 leading independent asset management firms from the UK and the Continent, managing approximately £500 billion and employing several thousand people.

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Getting Back to Work

Published by Charles Gubert

With lockdown restrictions in the UK easing – albeit at a glacial pace – investment firms are beginning to conduct risk assessments into whether it is safe to return to the office.  For now, nearly all financial institutions have instructed their core and non-core staff to work from home unless it is absolutely essential to make a journey into the office. This approach is likely to be the norm for the foreseeable future. However, some asset managers are looking to gradually usher some of their staff  back into the office over the coming months.

So what do firms need to be thinking about? First of all, social distancing needs to be strictly enforced. Most large financial institutions are currently working on measures to ensure that desks are at least 2m apart, and are developing stringent health and safety policies for employees and third parties entering the building. Whether social distancing is feasible at boutiques remains to be seen, given that most firms will have less office space. Vulnerable members of staff or individuals with pre-existing health conditions are being told to work from home, and this is unlikely to change until there is some sort of medical breakthrough.

A handful of investment firms have asked essential staff to travel to work on alternate days/weeks and this could start in the next month or two. However, people have been advised  to avoid the rush hour commute, especially with public transport operating on a much reduced service. Other organisations have instructed employees to drive if possible although this may be impractical given the lack of parking available in certain parts of London. What is clear is that most offices will be running on skeletal staff until at least 2021.

The new normal

So what longer-term implications does Covid-19 hold for the funds industry? Even the most techno-phobic of asset managers will now concede that remote working – despite its flaws – has a number of positives, not least of which is increased productivity. Most firms will likely keep an office, but only make it available to essential employees or individuals – who for logistical or mental health reasons – are struggling to work from home. If managers are able to downsize their offices, this could net some major cost savings at this difficult time.

Other firms are taking a more radical approach. Fed up with the high London rental rates and resigned to the fact that international travel will take many years to recover to its pre-crisis levels, some forward-thinking investment firms are opening up satellite offices outside of the capital or in commuter belt towns. With a number of asset managers under severe revenue and fee pressure, this could be an effective way to contain spiralling overheads. Such offices could also be strategically located near to where core staff actually live. 

Global travel is also likely to be another victim of cost cutting. Virtual Zoom meetings have demonstrated that a lot of interactions with clients or service providers do not need to be done in person. While initial meetings with prospective clients, due diligences and crisis management will require some level of physical human interaction, ongoing relationship management is a process that can be largely digitalised. By reducing travel spend, managers could net enormous cost savings and free up their resources. It is evident that the funds industry will change profoundly over the coming years, well after COVID-19 has receded.