Sartorial correctness isn’t necessarily easy when you’re a woman in an investment bank. If you consult UBS’s ‘dress code’ (since withdrawn), the woman in finance should never display her toenails, never wear a shirt that’s ‘tight against the chest’ or a coloured bra beneath a white shirt, and should always wear a nicely folded necktie in the style of a cabin assistant. And if you listen to Nomura, you should never wear a skirt with a deep slit, or ‘gay colour nail polish.’  

If this guidance is insufficient, there is – fortunately – additional help at hand. Heidy Rehman worked as an equity research analyst at Citi for 13 before quitting just as promotion to MD was beckoning. Three years later and she’s running her own ‘ethical’ fashion label, Rose & Willard, which aims to appeal to professional women looking for quality clothing without a designer price-tag, and is designed and made in the UK.

Similarly, Libby Hart, a former vice president at Deutsche Bank and director at SocGen, quit banking three years ago to devote herself to dressing professional women. You can see her collection of ‘office appropriate workwear’ here.

This is what the two women say about the appropriate dress code when you’re a woman who works in finance.

1. It’s harder when you’re senior

“The more senior you get, the more you want to be taken seriously, but if you put too much effort into your appearance, women in front office roles can often mistaken for a secretary,” says Rehman. “You can’t wear a designer suit every day, but following high-street trends looks cheap.”

2. Avoid high street trends

“Following the latest trends means that you’ll be constantly buying cheap, bad quality clothing that will fit badly and inevitably sit in your wardrobe most of the time,” Rehman says. “Look for something timeless and high quality.”

3. Invest in some ‘proper’ dresses 

Hart refers to her clothes as “investment pieces.” Costing around £200 for a dress, they’re not cheap, but Hart says – as is to be expected – that they’re worth it. Moreover, you need a few of them. “It’s easy to slip into a routine of wearing two or three outfits on rotation, especially when you’are starting at 6.45am. But if you really dress up, it will give you a confidence boost. It’s sad but true that you will be judged by what you wear in a masculine environment like banking.”

4. Go for quality

The last thing you want to be wearing when you’re advancing up the ranks in investment banking is a pencil skirt and cheap blazer, says Rehman. Yes, you can’t wear a designer suit every day, but investing in a well-tailored suit that you can go back to again and again is important.
“Hunt out quality – that means premium, not necessarily luxury. You need to focus on fit and quality of material, not just the label. Invest in something that will last,” she says.

5. Let your blouse speak for itself

“If you’re out and about speaking to clients, the last thing you need is to be restricted into keeping your jacket on throughout the day. “Your blouse needs to speak for itself,” says Rehman. “It needs to be professional and high-quality. No sleeveless blouses and nothing that reveals too much cleavage.”

6. You need sleeves

When you’re shopping for seasonal clothes to wear to work in banking,you need to remember that every season in the office is fundamentally the same thanks to air conditioning. It’s just outside that’s different.

“The summer work wardrobe is a real challenge – it’s freezing in the office and boiling on the Tube,” says Hart. All her dresses have sleeves to allow wearers to survive the office micro climate.

7. Cleavage should be constrained

Don’t even think about displaying cleavage. A v-neck top with a tiny “hint at cleavage” is fine, says Hart. Too many people go lower. “You see a lot of men ogling women’s cleavage in meetings. As a senior woman, that will undermine you.”

8. Skirts should be of a decent length

There’s no need to show some leg. “If your skirt is a bit short you will spend your whole life trying to pull it down,” says Hart. “You shouldn’t be worrying about what you wear all day long. You want to look at good as you can. It’s all about looking amazing whilst looking demure, that’s the key.”

9. But embrace your femininity

It’s not the 1990s and you don’t have to wear a pant suit and in a world where banks are at least admitting to unconscious bias in the recruitment and promotion cycle, don’t try and emulate your male colleagues.

“Dressing in a feminine manner is actually quite empowering,” says Rehman. “We’re seeing a big trend towards smart casual among women in both banking and management consulting – dressing professionally doesn’t mean wearing a suit every day.

10. Focus on fit

“Precision is the most important thing when choosing a professional outfit, and again this is down to quality of materials and fit,” says Rehman. “Most women quickly try something on in the shop, think that it’s OK, take it home and then never wear it again. Most women only wear 20% of their wardrobe.”

11. Heels are your friend

Think Teresa May. “I’m pro-shoes,” says Hart. “The higher the better. The extra height gives you gravitas and a better posture.”

12. Always ensure a confident stride

In an industry where client-interaction means projecting the right image, the last thing you want is to be tottering on very high heels, says Rehman. That said, she recommends some form of heel over flat shoes.

“Stick with heels, but make sure they’re a sensible height. You need to maintain a confident stride,” she says. Lastly, absolutely avoid anything that exposes your toes.

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If you work in the City of London, the general verdict seems to be that a vote to leave the European Union on June 23rd will be a bad thing for your career. A poll on our homepage currently  suggests 56% of you think a ‘Brexit’ will be either quite or very bad for your job. This is unsurprising: come-Brexit, Goldman Sachs has issued several warnings about its intention to move staff out of the UK and banks like Credit Suisse are already busy moving traders to Dublin.

Would Continental Europe’s finance professionals really ditch London if Britain leaves the EU though? After all, many have spent their entire careers in the City, have children at British schools, and drink tea instead of coffee…

We asked 25 non-British European finance professionals who are either working in London now or who have worked in London in the recent past for their opinions on the pleasures of London – or not. Given that London ranks 72nd in the recent Mercer Quality of Life index, versus 7th for Frankfurt, wouldn’t they rather be living elsewhere?

This is what they said.

“I have no commitment to London whatsoever”

This was a common sentiment – and not just among young finance professionals with no roots in the UK. Most continental Europeans in the City still have families or girlfriends in their home countries. Many are here for the jobs and not much else. If the jobs are on offer at home, home they will go.

“I would rather move to Milan! In short I like living in London as long as it is the EU,” said one senior hedge fund manager from Italy.

“My family’s in Milan and I commute a lot,” echhoed another Italian hedge fund manager in London. “The advantage of being in London has been that it’s a global and European hub – even though it’s expensive and quite difficult to live in. If Brexit takes some of these hub characteristics away, then Paris or Frankfurt – or Milan – will probably end up being good substitutes.”

“Paris and Frankfurt offer better job security than London,” said a director at a European bank. However, until now he said they haven’t offered any decent jobs: “I would definitely consider moving to Paris for the right opportunity.”

A Swedish M&A banker who’s lived in London said he’d rather live in Paris or Zurich than London: “Paris is a cool city to live in.” – The implication being that London is not.

“The Brexit vote is a betrayal” 

Some London-based Europeans expressed annoyance at the fact that they stand to be ‘rejected’ and forced to apply for a visa to stay here despite paying years of income tax in the UK.

“If the UK were to leave the EU, I would consider moving,” says one German finance communications professional. “I’ve been a loyal taxpayer in the UK for a very long time, and the prospect of having to arrange a green card or similar to stay here is making me mad….. I’d probably go to Frankfurt. ”

“The British are lower calibre than the Europeans and London would struggle without us” 

Another German finance communications professional in London said the Britons in the City tend to be less competent than their counterparts from the EU. “If you’re English, it’s all about which private school you attended and where you went to university,” he says. “In Germany, that’s a lot less important and most people have at least a higher degree.”

The Europeans in the City are often a lot more international than the Britons, he added. They’re the ones working in a foreign language and foreign culture and the mere fact of their presence indicates their higher calibre: “You have to be more flexible, more motivated and better educated to succeed abroad than at home.”

“If the UK leaves the EU, living in London could become even more expensive” 

Irrespective of the value of the pound, one senior trader and student with a German husband, said she foresees life in the City becoming more onerous if the UK is outside the EU: “Firstly we would have to move my husband to a partner visa, which would be a hassle. Secondly, a lot of our friends have kids and they have EU au pairs. If bringing EU au pairs into the UK became more difficult then it would certainly have a lot of financial consequences for families.”

“London’s not what it used to be” 

An Italian fixed income salesman said he’d move: “I like living in London but I wouldn’t mind at all living in Paris/Frankfurt –  or even better, Milan. In London salaries are decreasing compared to 5-6 years ago while house prices have surged a lot. I feel like London is not as appealing as it was in the past.”

“London has linguistic advantages”

“English is the language on the job and in the street in London,” said one senior investment banking auditor from Spain. “You don’t get that in – say, Paris.”

“London is more dynamic and international”

“As a non-German/French speaker I only want to live in London, I love it there!,” says one investment banking associate, currently in Germany.

“What I particularly liked about London is the international vibe and networking opportunities,” says Jerome Troiano, a former analyst at BarCap who now helps students into finance careers at French business school EDHEC.

“There’s no other place like London,” says another former French M&A banker turned entrepreneur. “The people, the experience, are unmatchable. I’ve tried Paris (a year and a half) in 2004 when it was much safer than now…and it’s a very difficult place for a non-French to operate. Frankfurt is a dead city past 6pm.”

But Berlin is best

Lastly, one European banking analyst who now lives in Berlin, says City people are missing a trick if they don’t try the German capital. “I bought a flat in Berlin for €46k. I’ve got a friend who’s paying £540 a month to live in an 8-bedroom house in Golders Green…”

Follow @MadameButcher

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In consulting parlance, they’re known as the MBB firms: McKinsey & Co, Bain & Co and the Boston Consulting Group. Historically, they dominated the consulting landscape and were seen as the most prestigious and interesting places to work.

Not any more. Our 2016 Ideal Employer Rankings which surveyed over 6,500 consulting professionals globally suggests a new hierarchy has emerged. Bain & Co and Boston Consulting Group are on there, but they’ve been supplanted in the top three slots by the rapidly growing consulting arms of the Big Four accounting firms. 

McKinsey & Co. is still the most popular consulting firm in the world to work for according to our survey. But now it’s followed by PwC, Deloitte, EY and KPMG.

Ideal Employer Professional Services Global Top 10

Boston Consulting Group and Bain & Co rank sixth and seventh respectively, ahead of Accenture and Grant Thornton.

What makes McKinsey & Co. such a good place to work? 

Why is McKinsey & Co. preferred to the rest? Our survey suggests the people who want to work for McKinsey value the firm for its high pay, its opportunities for promotion, the opportunities to travel it affords, its industry leadership, and the challenging and interesting work that takes place within its walls.

In an interview last year, Brian Rolfes, McKinsey’s global head of recruitment, said the firm makes an effort to empower its employees so they can work in the way they want. At the start of each project, Rolfes said McKinsey’s teams get together and discuss what they’re looking for from that engagement and their working styles. “This might including things like working out in the morning or leaving for a class every Tuesday,” said Rolfe. “As the project progresses, team barometers measure how the team is doing against these goals…is everyone getting the support they need? How is the workload? Are they achieving what they expect in terms of gaining skills and expertise, networking and having a full life?”

While McKinsey & Co. came out top on a global basis – and top regionally in the UK and Asia, Deloitte’s consulting arm seized the top spot in the US.

Ideal Employer Professional Services US Top 5

Deloitte is well known for its consulting strength among the Big Four accounting firms. Stevan Rolls, a senior HR professional at Deloitte, said this consulting prowess makes Deloitte more entrepreneurial than its rivals: ““Audit has historically been an annuity business, where you keep the same clients year after year. However, in consulting you start each year with a clean slate and need to go out and find the business and start again.”

Among the respondents to our survey who cited Deloitte as an ideal employer globally, 74% thought the firm offers strong opportunities for promotion and 82% thought it had a strength in offering challenging and interesting work.

By comparison, PWC was most highly rated for its solid training and development, EY for its challenging and interesting work, and KPMG for its opportunities for promotion.

View the complete 2016 Ideal Employer Rankings

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Faced with weekly reports on the gigantic earnings of some people in the investment banking industry, it can be easy to assume that anyone with a seat in the hallowed halls of wholesale finance is doing very well for themselves indeed. That, however, is a fallacy. And a new compensation study reveals just how large a fallacy it is.

Salary benchmarking firm Emolument compared the pay data of 9,351 employees working in ‘front office’ and ‘back office’ banking jobs in the City of London. The results, reported in the Tally, show that while the front office people who interact with clients and bring in revenues are doing very well for themselves, back office staff who provide the infrastructure necessary for the front office to function, are not. On average, front office staff with a Bachelor of Art degree earn nearly £100k ($139k) a year, while their back office counterparts earn £49k ($68k). Front office staff with a Bachelor of Science degree earn around £105k, while back office staff earn £50k. And front office staff from Oxford or Cambridge Universities earn an average of around £120k, while back office Oxbridge staff earn an average of around £65k.

This matters. It matters because most of the people employed in banks are working in the back office. Take Deutsche Bank, which last year added 2,700 people to its back office headcount, whilst cutting 243 people from the front office. Deutsche now has nearly three back office employees for every front office banker – compared to a ratio of just 2:1 only three years ago.  Moreover, infrastructure roles like risk, IT and compliance are preponderating, forcing banks to cut jobs in the front office and to find ways of paying all their new support staff less (like shifting them to ‘low cost locations.’) In the same way that most ‘bankers’ are not really bankers at all therefore, most people who work in banking are not well paid – and those who are, are under increasing pressure to justify their wages.

Separately, some people are still making obscene amounts of money. They are the male hedge fund moguls aged 60+. Forbes has a list of the 25 highest paid hedge fund managers in the world here. The top four all earned more than $1bn last year. 85 year-old George Soros earned a mere $300m and is, in any case, taken, but Dealbreaker helpfully points out that newly-divorced Ken Griffin will get to keep the entirety of the $1.7bn he earned in 2015.

Meanwhile:

Barclays cut its investment banking bonus pool by up to 12%. (Bloomberg) 

HSBC is having a push in IBD again. It just hired Matthew Westerman, a chairman of investment banking from Goldman Sachs, to become co-head of a new global banking unit. (Financial Times) 

Credit Suisse hired Stephen King from Morgan Stanley for algorithmic trading in Asia. (Global Capital) 

Peter R. Orszag, a former cabinet official in the Obama administration turned investment banker, has joined Lazard as a senior deal maker, the company  (NY Times) 

Centerview Partners hired a senior banker from Goldman Sachs. (NY Times)

All change at Panmure Gordon. (Financial News)

US high yield underwriting has had the slowest start to the year since 2009. (Bloomberg) 

Mizuho: now hiring bond traders. (Bloomberg) 

Records show just one Goldman employee, a financial adviser in the wealth management division, has donated to Mr. Trump — $534.58, to be precise. (NY Times)  

Standard Chartered might not be able to claw back those bonuses after all. (Reuters)

Facebook’s foolish interview question. (Sky)

The words of Warren Buffett: “It’s important that neither ego nor avarice motivate him to reach for pay matching his most lavishly-compensated peers, even if his achievements far exceed theirs.” (Bloomberg)

I surrender to my paunch. (AdequateMan)

Follow @MadameButcher

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This year’s bonus season on Wall Street has been more about keeping juniors happy than focusing on senior rainmakers. Bonuses are either flat or down by up to 10%, while salaries have increased to make it a wash year-on-year.

It’s not enough to have bankers doing somersaults of joy, but nor is it likely to have bankers crying into their beer. But what’s going on at the top of the tree? Managing directors in investment banking have become an increasingly maligned breed. Banks are promoting fewer than ever, and ‘juniorisation’ of the industry is ensuring that expensive senior staff are being shown the door.

Managing expectations for compensation

If getting to managing director is tougher than ever, it’s good to know what rainmakers and heavy-hitters bring in once they reach the top.

Recruitment firm Options Group estimates that base salaries for managing directors at bulge-bracket banks in the U.S. typically fall in the $400k-$600k range.

Looking at bulge-brackets and boutiques alike, but focusing specifically at managing directors in M&A, recruitment firm Selby Jennings estimated a more modest salary baseline of $350k, while acknowledging that many earn much more.

Looking at MD’s bonuses, large investment banks have a slight advantage in terms of raw figures – with most IBD managing directors in M&A earning a bonus somewhere in the range of $700k-$2m. That compares to a bonus range of $650k-$1.9m for M&A MDs at boutique investment banks.

“MDs’ bonuses are so tied to the revenue they drive individually, as well as the performance of their group and the bank as a whole,” said Mike Brothers, managing consultant in the investment banking practice at Michael Page. “Overall, their compensation is more heavily weighted on the bonus side, so more highly variable.”

However, the major caveat is that boutiques generally pay out their bonuses in cash, whereas many large banks defer significant portions for three-to-five years and require some of the bonus to be in company stock.

“There’s a big deferral factor [at bulge-bracket banks],” Brothers said. “Anything over six figures, a certain amount gets deferred three-to-five years, whereas elite boutiques and privately owned banks are paying all cash and they’re paying more in many cases.

“They’re very competitive with some of the firms that have gone public, which give MDs the option to take company stock or a deferred bonus,” he said.

For example, Deutsche Bank has deferred all bonuses for senior-level bankers for five years, in many cases with 20% of the total vesting after the first year.

“More senior executives, including MDs, have their bonuses deferred over a longer period of time,” Hayes said. “There is restructuring going on and they don’t want to lose top players, which is quite different than in previous years.”

MDs, depending how well their particular group head is doing, typically get a bonus between 70% and 150% of their base salary.

“At the top end, you’d have a hell of a lot more deferred than you would at the low end,” Hayes said. “Goldman, J.P. Morgan and Morgan Stanley are more at the top of that range, whereas DB, Barclays and Credit Suisse would be toward the lower end of that range.”

IBD managing directors weigh a bigger base salary vs. higher upside

At some of the smaller investment banking shops, a senior originator in M&A advisory, the equivalent of an MD, might earn a lower base salary of between $100k and $150k, but they get a percentage of the fee for any transactions they bring in and close – often a 40% success fee.

“Some boutiques run on an “eat what you kill” model, where the top M&A execs can make a hell of a lot more money than at a bulge-bracket IBD,” Hayes said. “That’s an entrepreneurial career progression where they can move forward a lot quicker at a boutique if they’re closing a lot of details.

“When you bring in business and close a transition, you’d get a percentage of every deal throughout the year as soon as they close, so those success fees attracts a lot of people to these boutiques, versus just waiting for your discretionary bonus,” he said.
Follow @danbutchrwrites

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If you work in accounting in financial services and have ambitions to earn as much money as possible, head to New York. Following that, go to Asia. London, it seems, is  behind the pack.

Outside of the executive suite – namely chief financial officers and audit chiefs and the like – New York offers the best salaries to accountants with up to ten years of post-qualification experience. Financial controllers and product controllers in investment banking are the top of the pile – with top salaries of $370k and $270k respectively.

Accountants working in financial services jobs in Singapore and Hong Kong also bring in hefty salaries compared to their counterparts in Europe, according to analysis of hundreds of accounting job titles in the 2016 Robert Walters Salary Survey.

In London, no single role in accounting stands out as paying especially well compared to other parts of the world. However, what the City does offer is a broader range of high-paying jobs. The three jobs selected below are the highest paying, but London offers more accounting jobs that pay over six figures than any other financial centre. Only a select band of jobs pay a similar amount in Singapore and Hong Kong

Regulatory accountants, management accountants, product control and internal audit are among the most high-paying accounting jobs, spurred by ongoing demand and a shortage of experienced candidates.

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Bad things have been happening to the bonus pool at Barclays’ investment bank. If reports are correct, it will be lower than ever for 2015 – at £900m ($1.3bn), down from £2.7bn in 2010, a decline of 67% in five years.

Nor is there much cheer from a bonus-per-head-perspective. If Barclays has indeed cut its investment banking headcount by 1,200 people, to 19,300, the implication is that bonuses per head in the investment bank will be £48k this year – their lowest ever.

It’s not all bad though. Barclays’ investment bankers received substantial salary rises back in 2009. They also receive giant ‘role-related allowances’ – Tom King (ex-CEO of the investment bank) got £642k last year. 

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Which popular qualification is most likely to get you a job in financial services now? And more pointedly – which one will get you a job that pays well?

We looked at the number of candidates with a selection of accounting and other qualifications who’ve uploaded CVs to our global database over the past three months. And we compared this to the number of jobs requiring those qualifications on the jobs section of the site.

Conclusion: You might want to study the ACA accounting qualification run by the UK’s ICAEW. Globally, there are ‘just’ four candidates with an ACA chasing each accounting job right now….

Unfortunately, however, the ACA doesn’t really play in New York – or much in Asia – most of the ACA jobs are (unsurprisingly) focused in London.

If you want to work internationally, it still helps to do a CFA or an MBA, although our analysis suggests demand for each qualification varies substantially across top global finance cities, as follows…

And the same applies to the MBA…

Meanwhile, based upon the average pay for jobs requiring each qualification in London, the CFA looks the most lucrative. This may be deceptive however: jobs advertised for MBAs are likely to be entry-level, whereas those demanding other qualifications are also likely to require experience.

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If you want to be the one person who secures a strategy consulting role of the 100 people who apply, you need to know how to get through multiple case study interviews. Consultants and investment banks tend to attract similar types of candidates, but it’s this interview style that really proves a stumbling block for most people.

I’ve worked at a big three strategy company for the last three years, and now interview graduates coming on to our training programme. Here’s a few insider tips to get you ahead…

It’s all about practice

No one has an innate talent for to solve case studies; it’s a learned skill like everything else. Once you’re in a strategy consulting role, firms will invest significant resources in training new hires to tackle real life scenarios according to their own style and philosophy. In the meantime, you’re on your own.

At interview, candidates are expected to show an elementary understanding of how to solve case studies and demonstrate significant potential to become ‘expert’ problem solvers with practice. They want to see that you are able to construct logical and efficient approaches to tackle varied scenarios.

This means you have to tackle the materials that these firms put online, and those of their competitors, before you step into an interview. All the best candidates practice, and it’s this practice that gives them the confidence to tackle new problems during the interview process.

Still, the best practice you will get is actually at the interviews. Explicitly or through nudges and steers, you will receive feedback and guidance during each interview you have. If you seem to be receiving hints, you probably are. Graciously accept them and don’t be afraid to change course based upon them – or argue why your approach is better. Give your interviewer confidence in your ability to learn by demonstrating to them that you understand feedback well.

Use the frameworks as a starting point

You should study all the analysis frameworks needed to tackle case study problems. These need to be in your back pocket at an interview.

As simple examples, you should know to break cost problems into variable and fixed cost parts, or revenue problems into price and volume parts. Then dive into more problem-specific approaches, using things like the 4Ps of marketing (product, place price, promotion), for instance.

Interviewers will expect you to know a handful of these ‘frameworks’ or business logics. Consultants use them day-to-day. They give structure to your thought process and help you to quickly come up with a solid set of mutually exclusive but contextually exhaustive (MECE) options to solve a problem.

Stand-out by doing two things with your frameworks, however.

First, don’t labour through what your frameworks are or why you’re using them. They should structure your answer, not be your answer. Clients do not care about how a framework works – they will just care about what it means for them. Treat your interviewer as though they’re a client.

Second, think ‘outside of the box’ that your framework sets up for you. Moulding the known to solve the unknown is how top tier consulting differentiates itself. So acknowledge where your framework is relevant and where its assumptions are less relevant for your scenario too.

If you can, then go on to suggest adjustments to it given this. As an example, in a heavily regulated industry, the primary stakeholder could be a Government rather than any ‘customers’, which may change the way you would operate and promote your goods. Show deep understanding and intuition by adapting well to the specific problem.

Don’t make the interview into something it’s not

Consulting interviews are a test of potential ability, not maths. Interviews do involve maths, however, and lots of candidates (I’d say up to half) fail in part because of concerns over their ability to handle data. Many candidates bring this upon themselves, trying to impress interviewers with unnecessarily complicated approaches to problems.

For detailed calculations consultants use Excel. In discussions we stick to round numbers and simplified calculations. Take the initiative to do the same in your interviews. Don’t actively avoid maths, but do actively simplify it. Often you get to choose the numbers, so be smart and do so strategically.

Know the personality of your firm

Each of McKinsey, Bain and BCG have distinct personalities that they look for. If you can, speak to an employee or two to scope this out. Very broadly, McKinsey is the most ‘white-collar’, BCG is the most academic and Bain is the most down-to-earth.

You should adapt your interview style to project yourself as a perfect ‘fit’ for each culture. Competition between the rivals is fierce, and if you project yourself as a great consultant, but perhaps better suited to a rival, the chances are that you will be rejected. Courting a candidate likely to opt for a rival is an expensive game that firms are reluctant to play. Make it known why you are specifically keen in that firm over its competitors.

Whatever you do, seem assured

As a consultant you will quickly be put in front of clients. Partners (typically the final round interviewers) therefore want to be confident that you’ll be a ‘safe pair of hands’ for their brand. This will be tested in particular if you’re applying straight from university. They want to hire candidates that possess the gravitas to get clients to buy-in to difficult concepts, or de-stress challenging situations.

Always act professionally and project self assurance in your ability to manage each situation, even when being asked difficult questions. They are purposefully testing your resilience. If you can demonstrate an ability to remain composed and persuasive under pressure, partners are sure to be impressed.

These are the guidelines I have to make it through the consulting interview, but remember there’s no secret recipe. Consultants value diversity in their new recruits, so show your personality throughout and have some fun…

Find out which consulting firm came 1st in the 2016 eFinancialCareers Ideal Employer Professional Services Rankings

The author is currently working for a large management consultant in the City of London. James Smith is a pseudonym. 

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Working in a large financial services organisation often necessitates being part of a small fiefdom, where playing office politics is as important for your promotion prospects as any performance metric. What about if you work at a boutique?

Many people that come from larger firms naively think that the smaller the firm, the less politics will exist. This is generally untrue, according to Jeanne Branthover, managing partner and the head of the global financial services practice at Boyden, an executive search firm.

Smaller firms often recruit people they know, so there are cliques of teams that have worked together successfully for years in other firms. There are lift-outs that come from other firms to increase revenue quickly with their own culture and click.

“In a smaller environment, politics is harder to hide, it is also harder to hide from,” Branthover said. “Figuring out the politics of the firm and who are the main players quickly is important and how to work with them successfully is key.”

Here is some advice for getting to know the firm’s hierarchy and playing the game of office politics well so that you position yourself for success.

1. Make sure you understand the office culture and fit in

It’s important to understand that office politics are really closely correlated to office culture.

“Senior people set the tone, rhythm and processes, as well as the culture of the business, and either you fit into that or you don’t,” said Jocelyn Greenky, the co-founder and CEO of Sider Road Media, a strategic consultancy. “People at the top value employees who share their own outlook, likes and dislikes, and they want to know that they fit in with them.

It’s not just about the big boss, you need to get the lay of the land.

Understand how the system works. You should be able to answer these three questions: “Who makes which decisions?”, “What matters to them?” and “Who influences them?” Figuring out the answers to those will help you navigate office politics more successfully.

“You want to understand the politics of what’s going on and how things get done, who has power to do what in a small bank or boutique, but don’t be political in terms of playing people off of each other, using your powers for evil, not good,” says May Busch, executive coach, speaker and author and the former COO of Morgan Stanley Europe.

2. Know when to rock the boat and when to shut your trap

Sometimes senior executives value subordinates who speak their mind in meetings and offer a fresh perspective, and there are plenty of cases when that’s is appropriate and beneficial. However, there are other cases when the top brass have already made up their minds and are looking to build consensus, rather than have a brainstorming session about other potential ways to go.

“Don’t make 50 suggestions for how something should change within the first three months after you’ve been hired,” Greenky said. “Early on, your job is to listen and absorb how things work at the company.”

3. Find a good mentor and nurture that relationship

If you’re not producing revenue, then playing politics effectively becomes more challenging. That’s when strong intra-office relationships become all the more important.

Get to know your boss and other decision-makers at the firm. Do you know their kids’ names? Their hobbies and interests? What their last vacation was? Get to know your boss personally and make sure you’re doing all the work as he or she expects.

And if a senior executive asks you to donate to charity, sponsor a 5k race or buy a few boxes of Girl Scout cookies, do it. You pretty much have to participate.

“It’s important to align yourself with your boss, [but it’s equally important to] get a mentor who’s not in your direct line of reporting, a senior person in a different department or role,” Greensky said. “Aside from your boss, your mentor is the first person to champion you for that new role or promotion.

4. Be like George Washington

“Don’t let people down,” Busch said. “Those organizations are much leaner, so there’s less room for someone to not carry their weight.

“Always do what you say you’re going to do,” she said.

And if you do chop down the cherry tree? Come clean.

“Don’t lie,” Greensky said. “If you do, you’ll get caught.”

5. Don’t engage in office politics whenever possible

Unless you’re actively drawn into the fray, often it’s best to remain on the sidelines of petty battles and competitive one-upmanship among colleagues.

Typically it’s far more effective to climb the ladder the old-fashioned way: taking the tough assignments and being willing to work longer and harder than your colleagues.

Figure out how to be a rainmaker – at small firms, you “eat what you kill” and will ultimately have to be great at bringing in business, not just executing on the business that others bring in, Busch said.

“Don’t play politics; do your work,” said Carol Hartman, managing partner of the financial services practice, North America, at DHR International. “Become an expert, become really good at what you do.

“Quality, substance and content will outweigh the political game,” she said. “What you sacrifice when you play politics is your integrity – if you’re asked to do so, flee, because you can always get another job, but you can’t get your integrity back.”

While sometimes engaging in politics is unavoidable, Busch agrees with that sentiment.

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So, you want to work for McKinsey & Co.? You’re not the only one. The management consulting firm ranked top among professional services firms globally in our 2016 Ideal Employer Rankings, and came top in every jurisdiction – except the U.S., where it ranked second behind Deloitte.

What makes McKinsey such a desirable employer? As we noted in our professional services analysis, it might have something to do with pay. – Among those who want to work there, McKinsey is highly rated for its compensation, even though a recent study by UK pay bench-marking firm Emolument suggested that it pays less than rivals like Bain & Co and Boston Consulting Group.  McKinsey also ranked highly for travel, promotional opportunities, interesting work and industry leadership.

We asked Kristel Adler, an engagement manager at McKinsey’s Atlanta office and ex-associate on Citi’s trading floor with an MBA from MIT and a bachelors degree from Princeton, whether these perceptions are true. In terms of travel, at least, the answer seems to be yes.

“I’ve been staffed in San Francisco for the last few months on a good project with a great team,” says Adler. The flight from Atlanta to San Francisco is five hours, but Adler says this isn’t an issue: “The flight may be long, but San Francisco is never a bad place to land.”

You don’t have to travel at McKinsey though. In an interview last year, Brian Rolfes, a McKinsey partner and global head of recruiting, said the “default location” for McKinsey consultants is their home office. Each consultant is assigned a “professional development manager” who helps thresh out what’s important to them. – If working close to home is a priority, the firm will try and arrange this: “Our scale makes it so we can staff people according to what fits them best, helps them grow and aligns with their priorities,” said Rolfes.

Adler says McKinsey has several different programs to help “mitigate the pressures of work.” Some of them, like “Take Time”, allow consultants to take an extra five to 10 weeks off each year. Consultants have used the initiative to learn Chinese, practice music, go travelling and gain a commercial pilot’s licence.

Adler’s McKinsey is a genial and collegial place to be. “It really is ok to randomly email that expert partner in Germany for a 15 minute conversation about a topic your new team is about to start working on,” she says. “Never underestimate the utility of quickly jotting ideas down on a piece of paper and sharing them with a teammate. You’d be amazed at how quickly you’ll be able to figure out a way forward together.”

While some consultants use an MBA to move into banking, Adler went the other way – joining McKinsey from the banking sector after finishing her MBA at MIT.  Consulting appealed because of, “The opportunity to see a variety of industries, roles, and functions,” says Adler. McKinsey & Co contains a lot of, “talented and motivated people,” she adds – although, “each office really does have its own personality and version of the McKinsey culture.”

More than anything else, Adler says McKinsey offers an unusual breadth of experience: “There are almost certainly folks at McKinsey who do work in the areas that interest you. They can help you create a home within the firm.”

View the complete 2016 Ideal Employer Rankings

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There are advantages and disadvantages to working in the investment bank at the Royal Bank of Scotland. On the plus side, the hours aren’t said to be too bad and the salaries are said to be quite reasonable when you’re only starting out. Less positively, there’s the persistent threat of eye-watering redundancies, the suggestion that director-level investment banking staff are some of the worst paid in the City, and the ignominy of working for the British government.

None of this is the worst thing about working for RBS, however. The worst thing about working for RBS is… the guilt.

If you work for Barclays, or Credit Suisse, or Citigroup, or Morgan Stanley, and you confess your identity as a ‘banker,’ eyebrows may well be raised, but nothing more. When you work for RBS’s investment bank, however, you are expected to do penance for the sins of your forebears, even if you joined after the sins were committed and share none of their culpability.

Such is the situation that RBS CEO Ross McEwan finds himself in. Sky News reports that McEwan is giving away half his £1m allowance to a charitable trust in an attempt to exonerate himself in the eyes of the British public. In light of RBS’s eighth annual consecutive loss, McEwan reportedly wants to make it clear that he acknowledges there’s “still more work to do.”

Not everyone at RBS is financially self-deprecating, however. As we reported earlier this month, the head of macro sales and origination at the bank is in the process of building a “dream property” on his private island in the Thames. 

Separately, bankers in Europe have a possible reason to put their party frocks on. Bloomberg reports that the European Union is “reassessing” its cap on bonuses at 200% of salaries. Full festal dress may be premature though – the European Banking Authority has said the bonus cap “should not be subject to any exemption” and is unlikely to budge.

Meanwhile:

Small brokerage firms in London may not have to adhere to the EU bonus rules after all. (Financial Times) 

Canaccord is making the entirety of its London fixed income team redundant. (Financial News)

Conflicts of interest: Russia is issuing $3 bn of foreign bonds. There are sanctions but if you are the Eastern Europe sovereign-financing banker at a U.S. bank, how can you miss this deal?  (Bloomberg) 

Bank of America is making some communications people redundant. (Charlotte Observer) 

Veteran energy banker is stepping down at Bank of America to “pursue interests outside banking.” (Financial News) 

Veteran British banker on Brexit: “‘You have to remember that they will always want to bring Britain down because our economy is stronger and more successful than theirs. Of course we should get out.” (Spectator)  

Barclays KYC analyst accused of torturing cat. (Dealbreaker)

DJ Judge Jules studied at the LSE and is now a lawyer. (Financial Times) 

When middle class professions stop being middle class:  He has cut his staff to eight from 25 and cut salaries to everyone left by more than 20%, including himself. “It’s just a blood bath.” (NY Times)

The Carlyle Group’s three founders each collected roughly $100 million in dividends and other compensation in 2015. (Financial News)

Follow @MadameButcher

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Royal Bank of Scotland’s pay policy in its investment bank is a confusing beast. On the one hand, it doesn’t want to hire rainmakers or millionaires. On the other, there are plenty of them there already.

Similarly, it’s cracking down on bonuses – around half of its employees will receive £2k and another 21% will get £5k – and yet on a pay per head basis, RBS’s investment bankers are getting more than they did in 2010.

Discounting its executives, RBS is spending £118.1m on people who earn more than €1m in its investment bank – more than it’s spending on other division. 121 people across the bank earned more than seven figures last year – 10 fewer than last year. The bank doesn’t break out these employees by division.

Anyone earning more seven figures plus at RBS will be largely reliant on their salary. RBS has voted for capping bonuses for its material risk takers – senior employees at the bank who’s actions could impact its risk profile – at 100% of salary. This significant – regulators in Europe have capped bonuses at 200% of salary for senior employees and the vast majority of European banks to report so far have opted to stretch the limit as far as it will go. If RBS wants to compete, it’ll either have to hike salaries or try to recruit talent by paying below market rate.

RBS is, however, at pains to point out that it’s cutting the bonus pool. The chart below makes this clear – its investment bankers shared £937m in 2010, a figure which was a massive 92% lower at £71m last year.

There’s an element of dissimulation here as well though.  RBS had 18,700 investment banking employees in 2010. This year, it has just 1,200 people. Although the bonus pool as a whole as plummeted, bonuses per head have not. In 2010, the average bonus per head was £50k in RBS’s investment bank. Last year, it was £59k.

The problem with RBS’s investment banking headcount, though, is consistency of reporting. RBS appears to have starting showing only front office headcount in its more recent reports and historical figures tend to fluctuate.

In 2013, for example, it said it had 10,300 people in investment banking. Today, the 2013 figure is reported as 2,100 employees.

It may be, therefore, that there are plenty of investment bankers grumbling over bonuses of £5k or less. But it seems more likely that RBS is less parsimonious than it likes to make out.

“It is important that RBS does not become too disconnected from industry norms,” Sandy Crombie, chairman of the remuneration committee, said in the bank’s annual report. “The committee recognizes the need to maintain a commercial approach to pay and reward the hard work by those employees who are helping to turn around RBS.”

RBS spent £348m on its staff in investment banking in 2015 – a reduction from £446m in 2014. However, on a per head basis, this is a £290k ($405.9k) average. Goldman Sachs staff received an average of $344k last year.

Now, we’re not about to suggest RBS pays more than Goldman Sachs. Reports suggest that 16,000-18,000 people were still employed in RBS’s investment bank last year – hence the announcement to cut 14,000 positions in 2015.

What is clear is that RBS has been making deep cuts. In 2014, it had 3,700 front office bankers. 2,500 people have been eliminated over the past 12 months.

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Less than six months ago, I spent my days in a sun-filled office with floor-to-ceiling windows and hipster-friendly exposed brick in the heart of San Francisco’s infamous SoMa district. These days, I’m in a not-so-luxurious office in London’s Bermondsey. As I write this, rain is pouring outside and it’s freezing.

I launched my own fintech start-up in London last year. With so many places battling to be the fintech ‘capital’ and San Francisco in a leading position, this is why I chose to base myself in the UK.

1. Getting the idea off the ground

Great products take time to develop and mature. It’s really hard (impossible) to write a plan for taking a new product to market. There are so many unknowns that it renders any kind of planning redundant. Start-ups work because they can iterate quickly and try lots of variations in order to hone in on the optimal formula. There is only one way to start and it involves packing in the day job and committing yourself completely to what you’re doing.

There’s an element of chicken-and-egg about it: you’ll never develop an idea to the point that you’re happy packing in your day job – but you can only achieve this if you’re working full-time. London has a unique programme called Entrepreneur First (EF) that gives potential founders the precious “slack on the line” (financially speaking) in order to commit to building ideas and turning them into companies.

Unlike their much-lauded Silicon Valley counterpart, Y Combinator, EF takes candidates’ “pre-idea”, creating a melting pot of technically-minded people all wanting to build new stuff. Without EF I think many great companies have remained unexplored of their respective founders, as they while away the hours in big corporate office buildings.

2. Healthy scepticism

My American friends will definitely mention my scepticism within minutes of talking about me. I don’t I boast about, and it’s a common perception of Anglo-American transplants, but some scepticism is good in fintech.

There are always at least 100 reasons a particular idea won’t work: “Who is going to pay to stay with a stranger?”, “Why not just use Internet Relay Chat (IRC)?”, or even “Why do we need another search engine?”.

The Valley has a relentless optimism and appetite for new concepts, no matter how leftfield (Uber for dogs anyone?). The upshot is a willingness to do things that don’t scale> and the resulting “unicorns”: Airbnb, Slack and even old timers like Google (to name a few).

Ideas take time to form into viable businesses, so it’s important to allow them time to develop. There’s also a glaring negative effect of too much optimism, particularly in a technology monoculture like San Francisco. I’m talking about companies built by great minds that solve insignificant problems. I’m talking about the 100th on-demand cookie delivery company, or the 1000th “niche” dating platform. If your environment doesn’t expose you to meaningful problems, it’s very difficult to develop meaningful solutions.

The diversity of London and its status as the UK’s cultural and economic epicentre provide a fertile environment for the development of companies looking to effect real social impact.

4. London is young and hungry

One of the oft-cited differences between Europe and the US is a lack of mafias. I’m not talking about the Corleone’s, but Musks, Thiels, Levchins, Moskovitzs, Andreessens, Horowitzs, and the like.

Successful companies breed successful companies. The PayPal Mafia alone is responsible for subsequent successes including Tesla Motors, LinkedIn, Matterport, Palantir Technologies, SpaceX, YouTube, Yelp, and Yammer.

The argument is that Europe’s younger start-up scene is yet to see successes of the same calibre and therefore hadn’t benefitted from its own crop of well-financed, experienced and committed serial founders. That said, if Thiel founded Palantir in 2004, six years after co-founding PayPal, can we expect similar follow-ups from TransferWise founders Kristo Käärmann and Taavet Hinrikus next year? What about Skype and Spotify?

5. The UK’s tax breaks

SEIS stands for Seed Enterprise Investment Scheme. Put simply, SEIS allows early-stage investors to minimise risk by claiming income tax relief of 50% on investments up to £100,000 per tax year. If an investment makes a return, investors are exempt from Capital Gains Tax on their profits. Likewise if things don’t go well, the investor may offset their loss against their income tax.

6. The foreign talent available in the UK

So far I’ve glossed over the sizeable topic of immigration, but it has played a key role in my decision to build a company in the UK and can’t be overlooked. I was one of the lucky few “winners” of the infamous H1-B visa lottery, which allowed me to work in San Francisco. On 13 April the USCIS announced completion of the H1-B cap lottery selection processes, receiving a reported 233,000 applications for the 65,000 possible visas (excluding the 20,000 internal ‘master’s cap’).

Each year this problem gets worse, as those who missed out in previous years reapply. While organisations likeFWD.us, founded by Zuckerberg, Gates, Hoffman et al. are leading the charge for reform, immigration still remains a hot topic in The Valley, and for all the wrong reasons. The UK has an opportunity to get it right. An open letter [4] signed by over 200 members of The Coalition for a Digital Economy (Coadec) and delivered to David Cameron in October warns of the adverse effects further restrictions upon skilled immigration could bring.

Fundamentally, right now London is reaping the benefits of ‘late mover advantage’. There’s a huge surge in both the number and quality of fintech firms out there, and this has created a buzz. It’s just a shame about the weather.

Freddy Kelly is co-founder and CEO of Credit Kudos, an alternative data platform for the credit industry. After completing a B.Sc. in Computer Science at the University of Manchester, Freddy moved to San Francisco to join the engineering team at Bitnami (YC W13). Prior to founding Credit Kudos, He was the first engineer at A16z-backed TXN, developing their transaction analytics platform.

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Once upon a time, RBS’s rates trading business was a force to be reckoned with.

Not any more.

In its annual results, announced today, RBS revealed that its rates trading revenues have fallen to a five year low of £688m ($959m), down from £1.9bn at their recent peak in 2012.

This is worth noticing for two reasons. Firstly, RBS CEO Ross McEwan indicated as recently as December that RBS’s rates business was important to him – although today’s numbers suggest otherwise. And secondly, 2015 was a good year for most banks in rates. Deutsche Bank said it doubled its rates revenues in 2015; HSBC achieved an increase of 15%. 

In fact, where RBS’s rates business once dwarfed HSBC’s, as the chart below suggests, the opposite now applies. Granted, there’s an exchange rate effect in here (HSBC declares in $ and RBS’s revenues have been translated into $ at current rates), but the direction of travel at RBS is clear. If you’re a rates trader in a British bank, HSBC looks like the place to be.

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Even as some investment banks cut staff, the competition for junior bankers is raging on Wall Street. Both bulge-brackets and boutiques alike have bolstered associate compensation to compete with the buy-side – and each other.

Looking at investment banking associates in mergers and acquisitions (M&A), their base salaries are more or less the same across large banks and boutiques. The bigger players have an edge in stub associate bonuses, but the top-performing first-year associates at boutiques have a slight edge over their big-bank M&A counterparts. From there, the gap widens at the top end of the pay scale, with the best paid associates at boutique investment banks earning significantly larger bonuses from year two through four.

“Across the board, people are wanting to leave large investment banks and move to a boutique, because there is more consistent compensation, especially at middle-market firms,” says Oliver Hayes, the head of corporate and investment banking, Americas, at Selby Jennings, a recruitment firm.


At boutiques such as Evercore, Greenhill, Moelis & Co., Piper Jaffray, Willman Blair, Jeffries and Perella Weinberg Partners, there is a lot more growth potential, Hayes says.

“Once you reach a certain level at a large investment bank, they’re not going to just hand out an elite title,” he says. “Big banks are very top heavy and very prestigious, so it’s difficult to move up.

“You can progress a lot faster at boutiques based on the amount of work you put in and the amount of revenue you bring in.”

Chain reaction in associate pay rises 

Last year, the largest investment banks in the U.S. increased base salaries for analysts and associates, and while there was a lag, eventually the most competitive boutiques in the middle market followed suit to match the newly established pay scale: $125k, $150k, $175k then $200k. This assumes four years at associate level.

However, for associates who stay past year one, many boutiques are trying to retain their best talent by sweetening the bonus for top performers beyond what they could earn at the biggest IBD.

“Certainly performance will always be a big factor in the bonus, but candidates will definitely lean towards being more interested in the smaller platforms, because they pay all cash,” said Mike Brothers, managing consultant in the investment banking practice at Michael Page.

“Elite boutiques and privately owned banks are paying all cash and they’re paying more in many cases – their compensation is very competitive,” he says. “So far this year, bonus numbers are less across the board, but at a higher salary, so the all-in compensation numbers are essentially similar, within the same range, to what they were last year.”
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When academics looked at the attitudes of expat bankers recently, they unearthed some fairly ugly attitudes among Western bankers working in Singapore to their Asian colleagues. The expats complained that the Singaporeans were ‘dependent, inflexible and un-creative.’ One complained to him that his Asian managers were, “fixated on what gets drummed into them three, four times every day by the newspaper, by the government”, and said they weren’t able to think for themselves as a result.

It’s not just Singaporeans. One mid-ranking quant at a top bank in New York City who asked to remain anonymous, said his firm receives thousands of applications from elite Chinese students: “They’re very good and hardworking –  when there are a billion people in the country that want what you have, you have to work incredibly hard to achieve anything, but they often have very poor communication skills beyond their bad English. And they’re not very creative; they have a hard time seeing the wood for the trees.”

As we reported last year, most banks are filling their analyst classes with high achieving Chinese and Asian students – and not just in Hong Kong and Singapore. Anecdotally, however, Asian hires are more likely to fill middle and back office roles than front office positions, making it harder to get promoted. “These kids are primed for MO risk and accounting roles, not talking to hedge fund clients,” said the quant.

Figures from our own database seem to bear this out. At managing director level, 55% of the individuals who’ve recently uploaded CVs to our database are native English speakers – even though native English speakers only account for 41% of all the CVs uploaded in the past three months. For native Chinese and Mandarin speakers, this situation is reversed: Chinese nationals only account for 8% of MDs, despite accounting for 11% of the total.

Is this evidence of discrimination? Or is it just that Chinese speakers are still working their way through the ranks? Let us know your opinion in the comments box below.

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BlackRock, including its iShares exchange-traded fund business, is the largest asset management firm in the world based on assets under management. It is also the most sought-after landing spot in terms of which fund shops asset management professionals most want to join.

Our 2016 Ideal Employer Rankings, which surveyed more than 6,500 financial services professionals globally, shows which employers people in the industry want to work for. The global asset manager top 10 list features seven U.S. firms, two Asian firms and two European firms tied for 10^th place.

Rank		Company
(*) Global Rank View all Asset Management jobs Back to the top
1 (5)		BlackRock
2 (26)		Fidelity
3 (29)		GIC
4 (45)		Wellington Management Company
5 (50)		Prudential
6 (N/A)		Temasek
7 (N/A)		Pimco
8 (N/A)		Capital Group
9 (N/A)		Franklin Templeton
= 10 (N/A)		Allianz
= 10 (N/A)		Axa

Asset management giants

After BlackRock, Fidelity Investments is the second most popular asset management firm in the world to work for, according to our survey. Fidelity has a vast bricks-and-mortar presence across the U.S., a wide range of mutual funds and other business lines such as retirement services, discount brokerage services and wealth management.

Those two behemoths are followed by Singapore-based GIC, a private company-cum-sovereign wealth fund owned by Singapore’s government, and Wellington Management Co., best known for sub-advising investment strategies distributed by other firms such as the Vanguard Group and Hartford Funds.

Rounding out the global top five is Prudential Financial, an American Fortune 500 company with sizeable insurance and investment management subsidiaries, among other lines of business.

What makes BlackRock such a good place to work?

Our survey suggests the people who want to work for BlackRock value the firm for its high pay, the financial performance of the firm, the opportunities it affords to work with key industry players, the fact that it is perceived to be a leader in the industry, and the challenging and interesting work that its executives take on.

78% of respondents who wanted to work for BlackRock believe that it offers a competitve salary. This figure was up with the top two companies in our overall rankings – Goldman Sachs and J.P. Morgan – and 82% perceive it as a leader in the industry. This was the second highest score in the top ten, behind only Google with 84%.

BlackRock president Rob Kapito recently gave a bullish speech about job prospects over the course of this year. BlackRock now has 13,000-plus employees – an increase of approximately 800 people on the previous year, but average compensation ticked down from $313.8k in 2014 to $308k last year.

BlackRock funds pulled in $30.98bn of inflows in 2015, although Fidelity attracted even more – $47.53bn – last year, according to Lipper. Los Angeles-based Capital Group, which finished seventh among asset managers globally and offers mutual funds via its American Funds subsidiary, achieved $24.25bn of inflows in 2015, says Lipper.

BlackRock also performed well in the global top 10 Ideal Employer ranking and the U.S. top 10 list that include all types of financial services firms, otherwise largely dominated by the biggest investment banks.

View the complete 2016 eFinancialCareers Ideal Employer Rankings

Follow @danbutchrwrites

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Blackrock, Aberdeen and J.P. Morgan: hiring more, and paying less

Asset management firms are hiring! Unfortunately, they're also paying less.

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Photo caption: Andreas Wass/iStock/Thinkstock

The last time that investment banks were making significant cuts to their trading teams, one hedge fund was waiting to take up the slack – Bluecrest Capital Management. Three years on, and the hedge fund is cutting the very traders it hired.

So far this year, nine traders and portfolio managers at Bluecrest have left.

Josh Farber, who was head of index trading at Deutsche Bank and joined Bluecrest in January 2015, has left. So has Amit Tanna, a portfolio manager who joined from J.P. Morgan in 2011, Daniel Escobar, a former Deutsche trader who joined Bluecrest from Arrowgrass Capital, former Barclays trader Liam Rowley and partner Jihan Bowes-Little – who is also a rap artist called Metis – is off to J.P. Morgan in Los Angeles.

Meanwhile, former SAC Capital partner Mauro Pizzi has also departed and Aaron Davies, who joined Bluecrest from CIBC Markets in 2011, has joined rival hedge fund Millennium Capital Partners.

This could mean that Bluecrest has lost its appetite to hire former investment banking traders after three years of expansion. In December it announced that it would return all third-party capital to investors as it felt the pressure on fees, poor performance and rising costs.

The hedge fund is also known for its staff churn and notorious for intolerance of underperformance for even a short time. Investment banking traders who make the move to a hedge fund often struggle to adjust.

Despite this, it’s still hired five money managers so far in 2016, but these have largely been at a junior level. The exception is Panayiotis Yiasoumi, co-head of European government bonds and global rates and currencies at Bank of America Merrill Lynch, who joined Bluecrest in January.

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Bank of America has succumbed. Despite saying last year that it was happy with the size of its fixed income currencies and commodities business and was getting ready to seize market share, it’s seemingly had a change of heart. The Financial Times reports that it’s planning to make cuts from its fixed income business and that these will be over and above the 5% of traders it usually lets go at this time of year.

The UK’s Financial Conduct Authority (FCA) Register suggests that some of these departures have happened already. The FCA Register simply shows people who’ve left the bank in London – without giving the reason for their exit, or clarifying whether they’ve moved to a branch overseas, but many of those who’ve left Bank of America Merrill Lynch (BAML) in the past month have been traders or structurers in the bank’s fixed income division.

February’s exits include: Charles Baumberg, a credit derivatives trader who’d been with BAML for five years; Matthias Arndt, a senior financials trader who joined from Santander in September 2014; Gianfranco Maglieri, a vice president in EMEA structuring who joined in 2008; Yau Chung Ng, a non-Japanese Asia currency trader who joined from Goldman Sachs in 2013; Florent Morizot, a CDS trader who joined from UBS in 2008; and Christian Schels, a European government bond trader who joined the bank in 2011.

Bank of America declined to comment on the exits. Colleagues of Baumberg and Morizot confirmed that they’d departed. Others on the list didn’t answer their phones when called.

While BAML appears to be bleeding senior fixed income traders, it’s adding juniors. The FCA Register shows various juniors turning up in February, including Maria Kosyuchenko, a former junior fixed income structurer from BNP Paribas, Dylan Himy, a former junior credit structurer at SocGen, Jianding Zhu, a trainee quantitative analyst in electronic FICC trading, Florian Poissonnier, a trainee junior credit trader,  Daniel Santha, a trainee FX options trader, and Patrick Meade, an analyst in credit sales who joined from insurance broker Aon.

Data from recruitment firm Michelangelo suggested recently that 70% of those leaving fixed income jobs in London are at director-level and above. London-based credit headhunters last year said senior people who lose their jobs now may struggle to get re-hired.  “Banks now have no interest in hiring the 30 and 40 somethings who can remember the seven figure pay days of the past – even if those people do say they’ll accept less, they’re always going to be bitter and twisted about it,” said one headhunter at the time.

Follow @MadameButcher

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