Financial services sector weathered the pandemic
Sector’s job losses have totaled far less than losses in 2008
Connecticut lost more than 5,000 jobs in finance and insurance in 2008 as it reeled from the financial crisis.
About 15 months since the coronavirus pandemic started to disrupt the state’s economy, the sector’s job losses have totaled less than one- third of that amount.
Financial services’ relative resilience in the past year has helped stabilize Connecticut’s economy, whose employment levels have plummeted in other sectors such as leisure and hospitality as a result of pandemic- sparked restrictions. The sector’s steadiness also demonstrates that there is a large number of industry professionals who still see their long- term future in the state, a commitment reinforced by flexible workplace arrangements.
“I was able to navigate the process of starting the firm without too much friction,” Brian Moss, a Darien resident who last year launched a private wealth management firm Soaring Capital, said in an interview. “This is a trust business, and we were so used to seeing people and interacting with clients and prospects in a physical way. But everybody became accustomed to having a virtual coffee. I can do a virtual coffee with five people versus two in- person in a day. In many ways, it is much more efficient.”
Limited job losses
Between March 2020 and March 2021, finance and insurance’s employment dropped by 1.7 percent, or a total of 1,700 positions, according to the state Department of Labor. On a percentage basis, nearly every other industry lost more jobs. Overall, the state’s employment declined 6.1 percent in that period.
The sector’s limited job losses in the past year reflect stable head count sat industry heavyweights, such as Stamford-headquartered Synchrony, the country’s largest private- label credit card provider. In the fourth quarter of last year, Synchrony had about 740 Stamford- based employees, unchanged from the number in the fourth quarter of 2019, according to data from the Stamford Office of Economic Development.
Financial- services professionals have benefited from their industry’s compatibility with remote working during the pandemic. Last October, Synchrony announced a new policy allowing employees to permanently work from home.
The industry has also gained from the federal stimulus packages of the past 15 months, according to a number of economists.
“There could’ve been a lot more stress on the financial sector if Congress had not authorized the support programs of late March and early April of 2020, which allowed a lot of companies of all sizes to avoid bankruptcy,” said Lawrence J. White, a professor of economics at New York University.
Job cuts in financial services have also been contained in the past year partly because many of the sector’s powerhouses had already undergone overhauls many years ago. Banking multi
nationals RBS and UBS have cumulatively reduced their Connecticut headcounts by several thousand positions since the financial crisis.
A total of about 101,000 worked in finance and insurance in March compared with an average of about 123,000 in 2007, according to the labor department.
Launching a new firm
Despite the pandemic’s disruption, Moss was determined to push on with his new firm. With Soaring Capital, he is focusing on clients such as “high net worth” individuals and families and other groups such as foundations and trusts.
“The three phases of my career have been traditional investing, risk management and then ( investing) alternatives,” said Moss, a chartered financial analyst and 30- year veteran of Wall Street. “With the business, I’m really trying to blend the three of those.”
Moss is Soaring Capital’s only employee and works from home. The firm has two advisers and uses consultants to help with technology and “special” projects. Moss said that he is looking to bring on interns from the Yale School of Management or Fairfield University’s Dolan School of Business and plans to make additional hires to keep up with client demand.
Bruce McGuire, president of the Connecticut Hedge Fund Association, said that he was not surprised that new firms such as Soaring Capital had launched in the past year. He sees the rise of remote working as a major factor.
“There is a great deal of wealth in Fairfield County. Many of the professionals here work in service- related fields such as finance, which pivoted better than most during the pandemic,” McGuire said. “I keep hearing from Wall Street friends that they will never again commute into New York City five days a week.”
Local and state elected officials see financial- services firms such as Soaring Capital as vital contributors to the state’s economy.
“Historically, there has been a concentration of Darien residents in the financial- services sector,” said Darien First Selectman Jayme Stevenson. “Since the Great Recession, we have seen greater diversification of employment sectors, but financial- services employment remains strong. Experienced wealth managers like Mr. Moss and his team can play a pivotal role in family wealth preservation and maximizing asset growth — a very important goal for our residents and business owners.”
Committed to Connecticut
While Connecticut remains a global hub for financial services, it has perennially faced competition from other areas for those jobs.
In recent years, officials from states such as Florida have tried to lure Connecticut- based businesses, with their lower taxes figuring prominently in those pitches.
“The New York metro area is still the finance capital of the country,” McGuire said. “If you are fortunate enough to be the boss and have the desire and ability to relocate your legal residence to Florida — or Texas — there isn’t much that Connecticut can do to prevent it. I expect that the state income tax is here to stay, and that it’s more likely to go up than down. The day when the entire firm moves south, however, still seems a long way off to me.”
To reduce the risk of major exits, Connecticut has provided subsidies tied to targets for retaining and creating jobs. Through the First Five Plus program launched under former Gov. Dannel P. Malloy, Westport- based Bridgewater Associates, the world’s largest hedge fund, qualified for a loan, grant and tax credits amounting to $ 52 million. Greenwich- based investment management giant AQR Capital received a loan and grant totaling up to $ 35 million.
At the same time, the state’s quality of life solidifies the commitment of many industry professionals such as Moss. He and his family have lived in Darien since 2010, and his 14- year- old and
12- year- old children are students in the town’s public- school system.
“You have to really love where you live,” Moss said. “We’ve got great schools here. And there’s the coast and the proximity to New York City. There’s just a lot to offer here.”