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Geographically placed in the midst of Europe and with a total population smaller than one-tenth of the city of London, the Grand Duchy of Luxembourg is the leading European domicile for investment funds and second country in the world after the USA[1] for investment funds overall, with total assets under management (AUM) exceeding €5.5 trillion in May 2024.[2]
As if this was not enough, on the one hand, Luxembourg’s regulator is easing access to investments reserved for private investors and creating a new form of simpler funds, whilst on the other, it is increasing the regulatory reporting requirements for more sophisticated products.
Luxembourg’s financial sector is also strong in banking activities. There are over 110 banks in the Grand Duchy, with assets under management of €0,6 trillion considering only private investors.[3] The banking scenery is quite international, with most banks being branches or subsidiaries of foreign banks and with close to two-thirds of private banking clients coming from abroad. In terms of services, Luxembourg banks focus highly on private banking to high-net-worth individuals, although there is also a large offer of retail and corporate banking.
To a lesser extent but still quite prominent is the insurance sector in Luxembourg, which has become a European hub due to the favorable legal and economic characteristics of the marketplace.
Over the last ten years, Luxembourg’s population has increased more than 25%,[4] primarily driven by young foreign professionals, and the above-mentioned regulatory updates will heighten the need for human capital to support the growth of the financial services industry even more.
If you are considering moving into the financial services sector in Luxembourg, no matter what your role is or will be, here are a few thoughts or tips that will help you differentiate, survive and succeed in the financial services “jungle”.
“Over the last ten years, Luxembourg’s population has increased more than 25%,[4] primarily driven by young foreign professionals, and the above-mentioned regulatory updates will heighten the need for human capital to support the growth of the financial services industry even more.”
Networking, networking, networking
There is an entire ecosystem of different players in the industry, such as management companies, investment advisors, custodians, administrators, transfer agents, lawyers, tax advisors, auditors, etc. interacting with each other on a daily basis. Regardless of your role, you will need support from one or the other and will need to be ready to support them when required.
There is a wide array of professional associations in Luxembourg, such as ALFI, Luxembourg for Finance or even the regulator, the CSSF, organizing seminars and forums to discuss regulatory updates, challenges, and other industry hot topics. As an example, at EY, we host the “Alternative Investment Fund Club”, a platform for asset managers, investors and service providers, to establish new contacts, learn about market trends and stimulate ideas and opportunities.
My advice here is to be present. Join as many events as possible and be eager to meet new people. This will not only help you to expand your professional agenda but also meet new people and friends to socialize with and to survive the cold winter.
Invest in yourself
Luxembourg has become the place of choice for investors and asset managers to launch their products and, surely, one of the reasons behind this choice is the know-how developed and the readiness to act upon any changes in the ecosystem I was referring to above. In order to stay relevant in the market and ensure you have that additional “plus” to offer, make sure to seek out learning opportunities, complete certifications relevant to your role and develop both technical and soft skills. Many companies offer their own learning curriculums to their employees: this maybe a good place to start. At EY, for instance, we offer a defined curriculum journey for new joiners up to the Partners. However, do not hesitate to go further and leverage your network or professional associations in Luxembourg to find other trainings, conferences, panels, etc. that may help you develop a better understanding of the market as well as position yourself better in it.
Stay up-to-date
Like any other industry, the Luxembourg financial services industry has its own regulations, reporting and transparency requirements and our local regulator, the CSSF, has been very proactive in updating this regulatory framework to support investors’ needs and the growth of the industry. Whether you are planning to stay in Luxembourg for a short period of time or over the long term, get familiar with the latest regulatory updates, industry trends and develop your know-how.
Additionally, it is important for you to stay in the know of the latest European regulations that may impact players in the financial services industry in Luxembourg and understand what, when and how those impacts will be and will come into place. It is key to be in a position to respond, or help your clients respond, to those regulatory changes swiftly and efficiently. As an illustration, in the past decade, European regulations or directives such as MiFID II, EMIR, PSD2, AML/CFT etc. have posed great challenges for local players.
There are plenty of resources and materials publicly available, developed by industry associations and market players that you can benefit from. As an example, EY publishes on a yearly basis Investment Funds in Luxembourg – A Technical Guide,[5] a comprehensive document dealing with almost all you need to know.
“In order to stay relevant in the market and ensure you have that additional “plus” to offer, make sure to seek out learning opportunities, complete certifications relevant to your role and develop both technical and soft skills. Many companies offer their own learning curriculums to their employees: this maybe a good place to start. At EY, for instance, we offer a defined curriculum journey for new joiners up to the Partners.”
Be active
Luxembourg has limitless opportunities to grow professionally and personally, which you would probably only encounter in a handful of other places. Here you will meet hundreds of motivated young professionals eager to boost their careers and, of course, have fun.
Located in-between Belgium, France and Germany, Luxembourg is only a few hours away from Brussels, Paris, Frankfurt, Maastricht or the Alps. Once you have discovered the secret gems of Luxembourg, there is always a great plan around the corner, be it skiing in the Alps, the Carnival of Köln, or the Christmas markets in Strasbourg. These all may seem like just great opportunities to have fun and enjoy yourself, which they are, but also represent good opportunities to develop your interpersonal skills and expand your network in a non-formal way, as you never know where you will meet the next person that may help you boost your career. As they say, work hard and play hard!
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