Investment Banking

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The number of authorized people working in the U.K.’s financial industry has slumped to its lowest level in nearly nine years as departures at banks and brokers continue to outpace growth by asset management and other buyside operations.

The Financial Services Register, on which the U.K.s new financial regulators keep tabs on all client-facing individuals working in the U.K, showed 148,571 registered at the end of June. Thats the lowest number since 2004, when the number was 140,920.

More than 21,000 people, or 12.5%, have left the register since February 2008, when the number registered peaked at 169,770.

Much of the falls been driven by a shrinkage in sellside banking institutions and brokers. The numbers working at those kinds of firms fell by 13% to 21,599 since February 2008.

At the same time, the number of professionals working in the buyside, which broadly includes asset management, hedge funds and private equity has bucked the trend and increased since the financial crisis, rising by 5% to 46,281 between 2008 and the latest data.

Imas, a corporate finance boutique which published that data, also has more granular figures, which show that the number of professionals registered as working in hedge funds has jumped 37%, from 4,713 to 6,442 since February 2008, and private wealth management professionals have risen by 20% to 4,146. The number of private equity professionals registered increased by more than 23% to 3,954 over the period.

Headhunters and economists said they expected the overall size of the financial industry’s sellside sector industry to decrease further as banks and others continue to downsize.

Jonathan Nicholson, managing director at search firm Astbury Marsden, said: “Do we see people moving? Yes I think we do, certainly to less regulated places and outside of financial services or the City sector entirely.”

Kathryn Pride, head of investment banking and asset management in London at search firm Michael Page, said that leveraged financiers and junior bankers had moved to private equity firms, hedge funds and direct lending funds, while equity and debt capital markets professionals were moving to asset managers in business development and relationship management roles.

Paul Carr, head of quant trading at search firm Campbell North, said: “There has been a mass exodus of traders from investment banks over the last few years, but the transition to the buyside is not easy – there are far more people trying to get out of banks and into hedge funds than there are people who have successfully made the transition.”

He added that “a lot of genuine prop traders” had already made such moves but that there was “increasing due diligence” before further hires were being made.

Rob Harbron, a senior economist at the Centre for Economics and Business Research, said that given the cautious nature of recovery in the U.K. economy “downsizing in the financial sector is likely to continue for the foreseeable future”.

Write to tim.cave@dowjones.com

Richard Partington contributed to this post.

This story first appeared on sister title Financial News .