The economic recovery is starting to feed through to the UK's financial services sector with investment managers feeling 'bullish', a new study suggests. According to the latest CBI/PwC report, which covered the three months to December, optimism rose at its fastest rate since the survey began in 1989. Profitability rose for the fifth consecutive quarter. Paula Smith, PwC's UK asset management leader, said: "Investment managers were in a dominant position at the end of 2013 and remained more optimistic than we've previously seen. "Rising equity markets, higher fee incomes and increased profitability are all contributing factors to the bullish confidence that volumes and revenues will continue to grow over the next quarter." The CBI said a large majority of investment managers reported higher fee income. {desktop}{/desktop}{mobile}{/mobile} Staffing levels have been increasing rapidly, driven primarily by increased demand, it added. PwC warned, however, that investment managers need to remain aware of the increasing pressure of compliance costs as the requirements from the regulator get more complex and controls tighten. Some 69% of financial services firms surveyed said they felt more optimistic about the overall business situation, while 1% said they were less optimistic, giving a balance of +68%. This was the highest since the survey began in 1989. Matthew Fell, CBI director for competitive markets, said: "As the recovery takes root in the wider economy, it is beginning to feed through to financial services firms. "Things are starting to look more 'normal' after five years of volatility."
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