A new report from the Securities Industry Association finds that a slump in securities industry employment has proven deeper and longer than believed. But, there’s a bull market in advisory roles, and compliance jobs.

The SIA report finds that the downturn in industry employment, between 2001 and 2003, was deeper and has lasted longer than was commonly understood. The SIA reports that overall, the industry lost 10.7% of jobs. Initially, the downturn was estimated at less than 10%. The duration of the downturn was longer than initially imagined.

Management and senior professionals suffered the largest losses, the SIA says, with 17.6% of these jobs disappearing between 2001 and 2003. Junior and support positions only dropped 2.5%.

Preliminary research had suggested that half of the jobs lost in the downturn have been restored, but the SIA now says that only about a third of the lost jobs have been recovered. Since the low of October 2003, industry employment has grown by 4% overall. It suggests that an increase in outsourcing accounts for the slow recovery, as do other structural shifts.

For example, the industry association reports a notable shift away from registered reps toward registered investment advisors. Some of this is attributable to RRs shifting to independent RIA status. Although, SIA also speculates that there may be a structural shift underway in advisory channels – specifically, an increasing demand for financial planning and advice, and a trend away from traditional stockbrokers. It forecasts that fee-based accounts will represent 35% of all retail production by the end of 2005.

Back office and clerical support functions continue to see some erosion, the SIA reports, largely due to technologically driven productivity improvements. The drop is RRs has particularly fed a drop in brokerage clerks, and a rise in call centre employees.

The RR layoffs also fed the drop in senior management employment, as did industry consolidation, and weak industry profits which led to a culling of the most-expensive assets.

The one bright spot is compliance jobs. The SIA says that while the industry was losing jobs, employment in this area grew 24%, and these jobs now account for 6.1% of overall industry employment, up from 4.6%.