If you don't mind the weather and some distinctly indifferent beer, Edinburgh, Scotland, is a very nice place in which to live and work. Of course it has its idiosyncrasies: can you think of another major city in the world where the main shopping street has shops on one side only? but residents appear relaxed about such things.
Big financial services employers, however, are far from relaxed about the state of affairs in Scotland. Having contributed to the boom in asset management and administration, employers are now finding that they can't get the staff to handle the business they have attracted. It is a measure of their concern that 16 of the biggest firms involved in investment operations have now come together to form a promotion and training organisation to boost recruitment and skills development.
Scottish Investment Operations Ltd (SIO)) was established at the beginning of February. The founder firms, which have all taken a shareholding in the new company, will also contribute loan finance of 250,000 (€392,500) over the next three years to get the operation off the ground. Scottish Financial Enterprise (SFE), the representative body for financial services in Scotland, brought the companies together. It is providing support services and Scottish Enterprise Edinburgh and Lothian has also given financial and practical help.
Angela Neish, assistant director of SFE, said: 'The investment sector in Scotland has mushroomed dramatically over the past few years and now has over 350bn under management. Backing that up has been a rapid increase in operations and administrative activities. Scottish companies have grown and international banks have moved in. The sector has huge potential, not only to grow in line with Scotland's investment industry, but to win work from across Europe. It is a highly skilled, customer-focused business, using leading-edge technologies and increasingly having to deal with complex regulatory and commercial issues. It needs a regular supply of high-quality recruits.
'The purpose of Scottish Investment Operations is to promote the business to potential recruits from schools, colleges and universities and to enhance the provision of training available in Scotland.'
The establishment of SIO is not without risk. Many of the founder firms need recruits now and may not be too fussy about where they find them. When HSBC was setting up its fund administration business in Edinburgh, it poached more than 20 staff from the WM Company, part of Deutsche Bank.
Now HSBC and WM find themselves sitting at the same table and professing a common goal, will they feel constrained? Deutsche Bank itself is rumoured to be close to consolidating its entire European custody operation in Edinburgh, sited in the new offices it is building next to WM at Crewe Toll.
Meanwhile, JPMorgan Investment Services has recently announced plans to create 220 new jobs in its Edinburgh and Glasgow operations.
One hundred new jobs for software engineers will be created at Morgan's European Technology Centre in Glasgow, while in Edinburgh, 120 additional jobs are planned in the near to medium term at Hexagon, which provides third-party fund accounting services, administering over 350 funds and 10% of the UK unit trust industry.
Among other firms, State Street has also signalled its intention to expand its Edinburgh workforce substantially.
Scotland is not the only regional processing centre facing skills shortages. Dublin has become notorious for its employment problems: one leading global custodian reports that its Dublin operation has a higher turnover than any other branch in its network.
It may be true that the Emerald Isle turns out a highly qualified workforce, but most of them seem to be leaving the old country as soon as possible.
Unfortunately for the big Americans, the solution is not to fill up a fleet of jumbo jets with fund accountants and send them across the Atlantic to show us Europeans how it should be done.
This is a problem that needs to be addressed at its source, which is why an initiative like SIO is both important and right.
But there must be some serious doubts over whether this group of 16, some of whom are fierce competitors, can work together and abide by whatever ground rules they inevitably have to lay down.
It would be nice to think that the objective set out by Jim Phillips of HSBC Global Fund Services, who has been appointed as SIO chairman, will be observed and pursued by all of them: 'This is a fast growing industry in which Scotland has a high reputation.
Our aim is to increase the number and the quality of people entering the industry which, in turn, will be good for the companies, their clients and the economy as a whole.'
For the record, the 16 firms are: Abbey National Financial & Investment Services, Aberdeen Asset Management, Aegon Asset Management, Baillie Gifford & Co, Britannic Asset Management, Edinburgh Fund Managers Plc, Franklin Templeton Investments, HSBC Global Fund Services Limited, JPMorgan Investment Services, Martin Currie, Newton Investment Management, Royal Bank of Scotland - Trustee & Depositary, State Street, Scottish Widows, Standard Life Investments, the WM Company.