Asset managers have never been prone to the hire and fire tactics seen in the banking sector, but after months of slowing recruitment requirements, talk is finally starting to turn to the prospect of job cuts.
Job prospects in the UK financial sector are generally downbeat, with 8,000 job losses predicted over the next three months, according to the latest CBI/PwC survey of financial services firms.
Not surprisingly, asset managers are not sheltered from this negative sentiment, and the survey expects headcount to shrink in the sector over the next quarter for the first time since 2009.
Edinburgh (as well as other areas of Scotland) is, of course, home to both large and small asset management firms, so any decline in the sector could hit home hard. So far, redundancies haven't been announced north of the border, but the signs aren't great.
Firstly, there's Aberdeen Asset Management, which last week unveiled its assets under management declined by nearly 5%, which could hit its revenues by 40m. Meanwhile, Alliance Trust's first half revenues have slipped by 64% year-on-year and profits declined from 119.5m in 2010 to just 5.3m in the first six months of 2011.
Neither have mentioned job cuts (Alliance Trust even suggested it was still expanding its investment team), but fund managers in Scotland are starting to get jittery.
One asset management headhunter tells us that for the first time in 18 months some unsolicited approaches from portfolio managers "looking to find pastures new", which he expects could be down to rumours of redundancies.
The head of HR at one large Scottish asset manager says that they're still open to the idea of hiring (albeit much more selectively) and that redundancies haven't been mooted.
Another head of HR at a mid-sized asset manager again insists no job cuts are planned, but suggests that some of the publicly listed asset managers could be first to wield the axe.
"Investors might demand some short-term cost cutting in order to boost returns at PLCs, but for independent asset managers redundancies can be self-defeating," he says. "We've invested heavily in acquiring expertise in the last two years, and we're not under any external pressure to scale back our headcount."
Scottish Widows Investment Partnership (SWIP) certainly seems to still be expanding. We've mentioned the prolific recruitment at the firm previously, but this week it also unveiled that James Carver was joining from Aberdeen Asset Management to co-manage its absolute return bond funds.
For all the resilient optimism among fund managers north of the border, it's worth noting that the CBI/PwC report suggests this isn't shared across the industry.
Costs have been cut sharply in the last three months, and more is expected in the next quarter. What's more, increased competition and reduced demand for services is expected to weigh heavily on fund managers over the next year.