eFinancialCareersEnglish (UK) – eFinancialCareers

Changes are being made to Moore Capital’s European operation to mark the start of 2018.

Hassim Osman Dhoda, a former senior macro trader at Moore Capital in London quit at the end of last year and has formed a new macro fund – Soloda Investment Advisors, which was registered with Companies House on December 28th 2017. For the moment, Dhoda is Soloda’s only employee.

Registrations with Companies House in London also suggest that Moore Europe Capital Management has “terminated” various “members.” These include finance director Garth Gasgoigne, global head of trading Maurizio Alfano, and portfolio managers Angelie Ashwin Moledina and Luis Valderrama.

Typically, hedge fund members are synonymous with partners. However, the terminated members are still employed by Moore in London according to the Financial Conduct Authority (FCA) Register. The changes are understood to be immaterial. A spokesperson for Moore declined to comment.

Following the ‘terminations’, Companies House shows that Moore Capital Europe still has three individual members (partners): Louis Bacon himself, Panagiotis Vlachopoulos ( a portfolio manager who joined from J.P. Morgan in 2015), and Joeri Jacobs (who joined from MSCI in 2010).

Dhoda had been with Moore Europe Capital Management as a senior macro portfolio manager for almost a decade. He previously worked for Tudor Investment, Goldman Sachs and Lehman Brothers.

Moledina joined Moore Capital in 2014, after 18 years at Morgan Stanley. One of the few senior female traders in the industry, she was named as the sole head of Morgan Stanley’s European liquid flow rates business just a year before leaving the firm.

Valderrama left J.P. Morgan in 2013, where he served as a senior portfolio manager and managing director, to join Moore Capital,

Gasgoigne, according to his LinkedIn profile, has been with the company for 17 years, the longest among the five. Interestingly, Alfano, who joined Moore Europe Capital in 2010, has had two stints at the firm. He previously worked for Moore Capital for 10 years, from 1992 till 2002. He left the firm to join Maven Capital Management as a partner, and eventually went on to become managing director at Barclays Capital, where he spent five years before rejoining Moore as global head of trading in 2010.

The legal alterations come after Moore cut heads at its London business. In July last year, the $13.4bn hedge fund cut as many as 30 jobs London and New York, although eight months previously its billionaire founder, Louis Moore Bacon, was upbeat about the firm’s outlook.

Moore Capital is one among many hedge funds that have reduced their fees and workforces after client outflows. According to a December 2016 Wall Street Journal report, the firm cut the management fee on its $7.5bn macro managers funds to 2.5% from 3%.

Image credit: LeonidKo, Getty

Long working hours may be the largest stressor for bankers, but getting a small bonus can also affect your mental health, especially if you live in an expensive city like New York.

Here’s how a small bonus can affect your well-being.

Counterfactual comparisons

As a result of comparing their own bonus to what they think others are receiving, Wall Street professionals will feel disappointed and then angry, according to Richard Peterson, a psychiatrist and the CEO of consultancy MarketPsych. “If management doesn’t take steps to keep their morale up, the employee’s performance will suffer and they will start searching for greener pastures.”

Failure to communicate

Getting a disappointing bonus can be tied to a miscommunication regarding performance expectations. “If the employee doesn’t know what the breakdown of the performance evaluation is, then it can feel like the employer is applying favoritism,” says Maya Rose Hormadaly, a career coach and the founder of JLegacies. “This can trigger a sense of incompetence and even a sibling rivalry-like phenomenon with co-workers.”

Bonus size > liking what you do

“It’s all about, ‘Did I get what I thought I was entitled to as a bonus compared to the guy down the hall?’” says Anne Ziff, an assistant clinical professor at Mount Sinai Medical Center. “They are perhaps placing a lot more weight on the bonus reward than on the pleasures and the challenges and the excitement of the work itself, and if that’s where you are and who you are, consider finding another field.”

Alpha dog

“When an employee has become accustomed to a certain lifestyle, there is an internal and external expectation of them to maintain or surpass that lifestyle,” Hormadaly says. “There is an immense amount of pressure to live at those standards regardless of changing circumstances; it serves as validation for their social status.

“A change in that status can put their reputation at risk; it insinuates that they have been rejected from the game,” she says. “In a fast-paced and ego-driven environment such as finance, rejection can be interpreted as failure. And failure at a workplace that occupies your life for 20 hours of your day can feel like an all-encompassing disappointment.”

Tying self-worth to bonus size

“So long as the employee’s self-worth is based on external validation from the workplace, they will be at the mercy of the ebbs and flows of the business and the people who are in power,” Hormadaly says. “Tell yourself, ‘I am not my bonus; I am many other things.’

“A small bonus may be devastating on a personal level, but it does not equate to your career identity,” she says.

Prioritizing work and earnings over family

“The spouse and the children [of a high-producing finance professional] usually carp about the hours – ‘Where are you? Why aren’t you coming home tonight?’” Ziff says. “And when they do come home it’s phone calls, nose in the computer or checking emails on your phone at the dinner table, which either leads to divorce or being miserable and you grit your teeth and keep going for the sake of the children.

“In this situation, you are not an asset to the family except for your paycheck – even emotionally rigid, narrow people do not find that flattering, and they shouldn’t,” she says. “Single people have an easier time with the long hours except that it’s really hard to date.”

Right-size your expectations

Some bankers need a big bonus every year to keep up that lavish lifestyle. Some feel entitled to a big bonus no matter what the reality of their own and their firm’s situation is. “I once had a portfolio manager client stressed that his yearly performance would lead to a low bonus, and his stress about it was itself impairing his performance,” Peterson says. “I asked how much money he felt he needed to be happy, and he responded ‘$150 million.’

“The PM was unrealistic and would have been stressed regardless of his bonus – he was unlikely to earn $150 million anytime soon,” he says. “So the solution in coaching was to first help him get grounded, in part by cutting his expenses, so he could make better decisions.”
Follow @danbutchrwrites

Have a confidential story, tip or comment you’d like to share? Contact: dbutcher@efinancialcareers.com
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by actual human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t).

Photo credit: hjalmeida/GettyImages
““

If you’re applying for banking jobs which you’re qualified for and you’re getting nowhere, you can blame your CV. Your CV is supposed to be your shop front and your door-opener, but if it’s deterring “customers” and keeping you on the outside then something’s wrong. It’s possible that your CV is filled with things that are working against you. If so, you should delete them – fast.

If your CV contains any of the following, it needs a purge:

1. Anything negative

You don’t need to give the reasons you were made redundant or why you left your last job. If you are still bitter about it, this can come across in the tone of your CV. Bitterness and negativity is not a good look when you’re applying for a new role in financial services.

2. Anything irrelevant

The fact that you were a lifeguard during the summer term 20 years ago is not something a banking recruiter will care about now, so leave it out. However, if you’re chair of a local investment committee (very relevant in buy side), have raised thousands for charity, or are seasoned champion-level swimmer (shows competitive streak and drive), then leave this in – these kinds of things demonstrates personality, commitment and drive.

3. Politics and religion

We live in politically fraught times. Just like a good dinner party, sharing your political or religious views on your CV is a big no-no. Don’t leave the door open for discrimination.

4. References

There’s no need for these. If a prospective employer wants to approach one of your former bosses for a reference, let them ask for it. Even writing ‘references on request’ at the bottom of your CV is a waste of valuable space.

5. Unnecessary words

‘Successfully’ and other words ending in ‘ly’ should be avoided in any financial services CV. If you increased income, slashed costs, or improved processes, of course you did it ‘successfully.’ There is no need to state the obvious. If you’re struggling for space, a good rule of thumb is to read back through your CV, find all the words ending in ‘ly’ and remove at least 50% of them.

6. Jargon and acronyms that are specific to your current company

No-one will understand company specific jargon, and no-one will care. The human brain skips over things that it can’t read or doesn’t understand, so using words are that unintelligible will just help your CV on its way to the rejection pile.

7. Salary information

Unless it is specifically asked for, there’s no need to mention how much you’re paid on your CV. If you’re paid too much or too little, you could be immediately ear-marked as too expensive or not worthy. Leave salary discussions for the interview.

Victoria McLean is the founder and CEO of City CV, a London-based CV writing service. She was previously a recruiter at Goldman Sachs and the equities division of Bank of America Merrill Lynch.

Follow @MadameButcher
Contact: sbutcher@efinancialcareers.com

““

It’s 2018, and maybe you have itchy feet. You want to quit banking and go into consulting, or fintech, or private equity, or do something completely different.

Are you sure this is such a good idea though? A forgotten report issued last year from Bernstein research might make you think again, and stick with banking for a few more years at least.

1. In your early 20s you can earn three times more in investment banking than the average job

You might fancy becoming an accountant or a broadcaster or a civil servant instead of going into banking. If so, you’ll still earn a lot less than if you leave university and achieve a front office banking job. Admittedly, it shouldn’t be about the money, but the discrepancy is probably big enough to make you stop and think: Bernstein says entry-level banking jobs pay three times the average entry level pay for other sectors in the UK.

Bernstein analyst and associate

2. You probably shouldn’t step off your investment banking career before you’re AT LEAST 34 years-old

Bernstein’s most exciting chart (below) suggests that if you can stick it out beyond the mid-VP level, it will be worth it.

By the age of 30 you should, cumulatively, have earned $1m in front office banking. Thereafter, cumulative pay increases exponentially. By the age of 34, you should (cumulatively again) have earned $2m. If you can stick it out until the age of 42, Bernstein says you’ll have earned nearly $6m over your banking career. Do you really want to quit aged 27 for a small and ultimately unsuccessful tech firm? I

Bernstein cumulative

**3. People elsewhere in ‘banking’ don’t make this money**

Don’t assume that just because you get a ‘banking job’ you’ll be paid this sort of money though.

As the charts below show, hardly anyone in finance works in front office investment banking (IB) (ie. in sales, trading, M&A or capital markets), and those who don’t aren’t paid much more than people doing something entirely different. Most people who work in banks are working in the retail or commercial banking sectors. Even within investment banks there at least twice as many people working in support roles in the back and middle office as there are in the highly paid front office jobs. These jobs don’t pay nearly as much.

Banking vs median

Bernsteing banking

Follow @MadameButcher
Contact: sbutcher@efinancialcareers.com

Photo credit: Commuters by Rob Watling is licensed under CC BY 2.0.

““

Deutsche Bank has made its first big hire of the year by appointing Krisan Haria – a former senior trader at KCG Holdings with expertise in data science, machine learning and artificial intelligence – as a synthetic strat, based in London.

Haria comes with 15 years of experience and joins the firm at a time when John Cryan, Deutsche Bank’s chief executive, has promised normal bonuses and pay increases in 2018, the first time he’s done this since taking charge two and a half years ago. Last year, Cryan cancelled performance-related bonuses for senior staff.

At KCG Holdings, Haria was responsible for running the client business side of trading. He also worked on high-frequency trading models, looking to better them and testing out new-builds on them. He left KCG in September 2017, and was on gardening leave for four months, according to his LinkedIn profile.

His gardening leave coincided with the period when KCG laid off at least 60 people after it closed its London proprietary trading business in July following its acquisition by high-frequency trading firm Virtu Financial. This caused many people to leave the firm – voluntarily or otherwise.

Proficient in Python, Linux and SQL, Haria is a cryptocurrency, mining and ICO (initial coin offering) expert. His earlier stints include working as a research analyst at Lloyds of London, a quantitative strategist and ETF trader at UniCredit Bank, and a head trader at Headlands Trading. Haria has a Ph.D. in Financial Mathematics from Imperial College London.

According to industry experts, artificial intelligence, machine learning, digital, mobile, cloud, and cybersecurity are emerging areas where banks will be hiring in leadership roles as they build internal technology teams.

Image credit: Getty

'published_date' : '2018-1-4', 'tag' : 'N/A', 'longevity' : 'News', 'content_origin' : 'Original Content' }

Success in the Financial Industry Regulatory Authority’s General Securities Representative Exam, more commonly known as Series 7, is fundamental to anyone wishing to work in the investment industry in the United States. Before you can sell securities, you need to pass the test. Fail, and you could lose your job – the pressure is on.

The good news is that – unlike the CFA exams where only 46% of candidates make the grade – around 65% of those taking the Series 7 pass. But there’s clearly still room to falter.

We spoke to Brian Marks, managing director of New York-based FINRA Licensing Exam preparation firm, Knopman Marks Financial Training, on what it takes to make it through the Series 7 exams.

1. Put the time in

If the CFA requires 300 hours of study for every level, the recommended prep time for the Series 7 exam – assuming you’re new to the industry – is 80-100 hours. This should mean not only consuming the relevant textbooks, but undertaking at least 1,000 practice questions and taking live exams so you can gain an understanding of the pressure you’ll be under on the day.

2. Think concepts, not questions

You will skip questions during any practice exams, but don’t panic and don’t assume that individual questions will crop up anyway. The key, says Marks, is to learn concepts rather than rely on your memory: “People try brute force to memorize formulas rather than understanding the concepts. If your memory fails on the exam, there is no backup,” he says.

The exam covers a wide swath of material, and it’s important to be familiar with concepts such as limited partnerships, annuities, mutual funds, exchange-traded funds (ETFs) and collateralized debt obligations (CDOs). “Investment products and terminology add up to a significant number of questions on the test.”

3. Don’t spend time on the more technical subjects

In the Series 7, a lot of candidates are guilty of spending way too much time on the options and corporate bonds sectors. “These two topics account for about 20% of the exam,” says Marks.“The old story about the Series 7 was that options and municipal bonds used to make up close to 50% of the test – that was your parent’s Series 7, but that’s not the case anymore. There’s more variety and more emphasis on clients and constructing portfolios for them. There’s a trend towards testing practical knowledge to ensure that people are well equipped to meet clients’ investment needs.”

4. Know the bell curve rule

There are two facts to consider when you’re pondering how much time to spend on each question. Firstly, there are 260 questions in the Series 7 exams but only 250 count. The remaining 10 are experimental questions used by FINRA to help improve the test in the future. So, don’t freak out if you see a question on an unfamiliar topic, this can put you off other questions. Secondly, there’s a bell curve approach to the exam – the first and last 25 questions are the easiest, so don’t panic if it suddenly gets more difficult.

5. Train for what you’re getting yourself into

The Series 7 exam is six hours long and consists of 260 questions. It’s a beast. There’s a reason you need to immerse yourself into practice exams rather than simply bite-sized study chunks – you need to train like an athlete to get your mind and body used to this marathon period of time.

6. Make sure your study material is up-to-date

This sounds like a small thing, but out-of-date study material means that you’ve pretty much missed the boat. This is particularly the case as regulators change the rules ever more swiftly. The study material you use must be less than a year old. Marks gives the example of the JOBS Act, passed by Congress years ago, but which has amendments under Regulation A that came into effect on June 19, 2015. FINRA will expect candidates to be up to speed.

“Keep an eye out for crowd-funding questions, which may come up. FINRA will also heavily weight questions on topics that have been the subject of abuses by industry personnel. Examples include variable annuity sales to senior citizens and sales of structured products to less sophisticated investors,” he adds.

Finra constantly updates the Series 7 content outline. A premium topic is making suitable investment recommendations. “There’s a major trend toward the suitability of investments on the examination,” says Marks. “It’s not so much about rote memorization as it is knowing how particular clients would want to construct a portfolio and knowing what types of products would be appropriate for them.

“For example, zero coupon bonds might be appropriate for someone looking to save for their children’s college tuition, money market funds are good for a client seeking liquidity, while structured products such as equity-linked notes, sophisticated products with leverage, are likely appropriate only for institutional investors with a detailed understanding of how they work,” he adds.

7. Go above and beyond

You need 72% to pass the Series 7 exams, but confidence is key. Realistically, you need to be hitting 80% in the practice exams to go into the day knowing you can pass. The bigger the margin for error, the better.

Handy hint: The hardest Series 7 questions, with expert answers

Marks provided these three questions as examples of what you’re likely to encounter on the Series 7 exam.

1. Variable annuities have investment features similar to mutual funds. Which of the following is not a characteristic of a variable annuity?

a. Tax-free distributions once retirement age is reached

b. Payout options that can deliver income over an investor’s life

c. Death benefits

d. Tax-deferred treatment of earnings

Answer: A. Variable annuities generally offer tax treatment similar to a corporate retirement plan, with after-tax contributions, tax-deferred growth and pre-retirement distributions that are taxed as ordinary income.

2. In January, an investor opens an options position by purchasing 3 ABC March 30 calls and by selling 3 ABC March 40 calls. This position is a:

a. Debit spread

b. Credit Spread

c. Long Straddle

d. Short Straddle

Answer: A. An investor who buys and sells the same class of option (e.g. calls) on the same security is establishing a spread. In a debit spread, the customer pays a net premium. This position is a debit because the 30 call will have more intrinsic value, and therefore carry the greater premium.

3. Your client Steven, a New Jersey resident, recently inherited $750,000 from his uncle who passed away. Steven is 42 years old, married with two children ages 15 and 11, and is a partner in a dental practice. He earns $325,000 with benefits. His wife Marie is a radiologist in a medical practice, earning $175,000. They can comfortably handle their mortgage, car payments, two annual vacations and a life insurance premium. You are re-assessing their portfolio, given their windfall. How would you suggest they proceed?

a. 45% Money Funds, 35% State of New Jersey Bond Fund, 20% Index Fund

b. 65% Options, 20% REIT, 15% CMO

c. 40% AA Corp Bonds, 40% NJ Turnpike Bonds, 20% Sector Fund

d. 40% Zero Coupon Bond, 10% Options, 50% Large Cap Equity Fund

Answer: D. Their immediate cash needs can be funded through their salaries. They have cash that can be invested for growth, and enough disposable cash to speculate with options, albeit modestly. Additionally, the zero coupon bonds are a good way for them to save for their children’s college education.
Follow @danbutchrwrites

Photo credit: LuckyBusiness/iStock/Thinkstock

With the turn of the calendar to 2018, many of us contemplate our short- and medium-term career goals. Financial services professionals often ask us how they can parlay their skills from a career in investment banking, PE or investing into a position as a PE-backed chief financial officer.

Above all, PE companies look for CFO candidates whose backgrounds match their investment theses. However, while many skills translate from Wall Street to Main Street, there are certain caveats that investment banking and PE professionals should consider if they want to ensure that this is a viable, alternative career path.

Boosting gains and avoiding losses

First, it’s important to understand that portfolio company financial management requires skills and expertise in two main areas: prevention of loss and acquisition of gain. Many Wall Street-trained financial professionals are experts at the acquisition of gain, using their foundational skills in strategy, deal-making, financial planning and analysis (FP&A), communication and relationship-building to achieve growth.

But what about the prevention of loss? If you are an investment banking or PE professional aspiring to be a CFO, it is important to complement your FP&A, Treasury, capital-markets and deal-making skills with a solid foundation in accounting, controls, information systems and operations.

In fact, when we see Wall Street-trained CFOs fail at PE-backed middle-market companies, it is largely related to their inability to appreciate the nuances of back-office operations, and in particular, the challenges associated with back-office integrations and financial systems development.

Some PE firms with aggressive growth strategies pair a CFO with an investment banking background with a strong CPA or controller who understands accounting on a granular level and has a background in systems and operations.

Nevertheless, these firms rely upon the CFO’s ability to go deep into the numbers and provide executive oversight on all aspects of the back-office. If the CFO doesn’t have a sufficient foundation in accounting, finance and operations, then they will have difficulty meeting the demands of the PE owner. The bottom line: If you are gunning for a PE-backed CFO position, make sure to brush up on your accounting skills.

Bring your A-game

In addition, it’s critical to understand the three-dimensional aspects of an “A-player” CFO.

The first is growth – or the “sail.” The second encompasses processes, controls, systems and reporting – or the “rudder.” The third is leading and managing people – or the “team.” It is especially important for those early in their careers to develop expertise in these three areas.

If your desire is to ultimately focus on growth and M&A and you are already in investment banking, consider transitioning to an operationally focused PE fund or to a public accounting or consulting firm. Alternatively, consider starting at a public accounting firm and then moving over into transaction advisory, PE or investment banking.

In any case, the price of admission is a rigorous academic background in accounting and finance and a strong work ethic. Regardless of the path you choose, a successful CFO marries a variety of skills together and should pursue paths that give you experience across the spectrum. That’s what it takes to impress demanding PE owners making the hiring decisions.

Joy D’Amore is the director of executive search and David Haslam is the director of talent at CBIZ, which provides financial and operational consulting and recruiting to private equity-backed, entrepreneur-led and publicly traded middle-market companies and PE firms.
Follow @danbutchrwrites

Photo credit: RyanKing999/GettyImages
““

Senior private equity executive Ralf Ackermann, a former partner and head of the European opportunistic credit fund at Apollo Management, who left the firm in July last year, has finally taken up a new role at Searchlight Capital Partners.

Five months after taking a gardening leave, Ackermann has joined as a partner in the eight-year-old private investment firm’s UK office. Here, he will focus on opportunistic credit, special situations, and private equity investments.

Searchlight Capital’s UK business was founded by Oliver Haarmann, a former partner at KKR & Co., Erol Uzumeri, former head of Private Equity for the Ontario Teachers’ Pension Plan and Eric Zinterhofer, a former senior partner at Apollo Management in 2010. It has since become one of the most lucrative firms to work with. According to the Searchlight’s fillings on Companies House, the highest paid partner at the firm earned £3.3m in 2016.

Based in London, Ackermann comes with 15 years of experience. He spent 10 years at Apollo Global where he oversaw the Illiquid Opportunistic Credit business in Europe while serving as a member of the Global Illiquid Opportunistic Credit Investment Committee and the European Management Committee of the firm.

At Apollo, he focused on a wide range of restructuring and distressed investments across the TMT (technology, media, and telecom), retail, and industrial sectors, among others. He also helped establish a dedicated distressed retail investment joint venture, Alteri Investors, to focus exclusively on complex restructurings in the European retail sector.

He rose to become a partner at Apollo in December 2013 and led a team of eight analysts. In July 2017, he announced his departure on LinkedIn saying he was “now looking forward to the next chapter”.

Interestingly, Ackermann has been serving as a director in packaging and containers company Airopack since May 2016. Prior to joining Apollo, Ackermann worked at Goldman Sachs as an associate in the bank’s distressed investing desk for three years starting 2004. He began his career in investment banking in 2002 with Greenhill & Co, a boutique investment bank.

Follow @MadameButcher
Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

Photo: vernonwiley Getty
““

M&A boutique Centerview Partners should pay exceptionally well globally for last year. As Business Insider pointed out in late December, Centerview had a “monster” 2017 after working on massive deals like the $69bn CVS-Aetna merger and Disney’s $66bn buyout of 21st Century Fox’s film and TV assets. Given that Centerview only has 37 senior bankers, this should surely amount to a massive payday.

Maybe so. But newly released accounts for Centerview Partners UK LLP for the year ending March 31st 2017 suggest things weren’t necessarily that great in London nine months ago.

Both profits and revenues fell at Centerview’s UK operation in the year to March 2017. Revenues were down 11% on the previous year to £35.4m; profits fell 20% to £21.4m.

Nonetheless, Centerview hiked London headcount by nearly 30% to 35 people. At the same time, it cut average pay per head (possibly as a result of hiring additional juniors) from £334k ($417k) to £308k.

The most remunerative positions at Centerview are predictably held by the firm’s partners. In the year to March 2017, the average London partner earned £2.7m. Like the rank and file, however, the average partner received a pay cut in the year to March 2017: average partner compensation was down nearly 20% on the previous year.

Despite all the pay cuts and the falling revenues and profitability, someone at Centerview did very well last year. The firm’s highest paid partner earned a massive £7.8m, up from £6.7m the year before. If you bring in the fees at Centerview, you’ll clearly get a cut.

““

J.P. Morgan has brought on board another top technologist with a Goldman pedigree who was latterly at Deutsche Bank, Jim Adams has joined the firm as a managing director, engineering and architecture services.

Adams comes with 18 years of experience in investment banking. His stints include working at Goldman Sachs and Deutsche Bank. He will be based at J.P. Morgan’s New York office.

Adams is J.P.M’s third big tech hire in four months. The bank was late to invest in its electronic trading platform and has been playing catch-up. Last April, Daniel Pinto, chief executive of the investment bank, said that J.P. Morgan wants to achieve a top three position in all “sub-products and geographical categories” in global markets.

Adams was almost certainly hired by Michael Grimaldi, whom J. P. Morgan recruited from Deutsche Bank in September 2017 and subsequently promoted to Chief Information Officer (CIO) at its Corporate and Investment Bank. Before Deutsche, Grimaldi spent 21 years at Goldman Sachs, latterly as head of its securities and equity research technology functions. He joined DB in 2014 to lead technology for its investment bank.

Grimaldi is making a habit of hiring ex-GS technologists into J.P.M. Grimaldi’s arrival at JPM was followed by that of Karen Rossi’s, a former managing director at Goldman Sachs. Rossi, who had spent ten years at Goldman Sachs, joined as managing director in JPM’s Corporate and Investment Bank Technology division in November.

Globally, J.P. Morgan’s investment bank technology headcount is huge – around 10,000 people work in tech for J.P. Morgan’s CIB, which is approximately 25% of IT headcount across the bank.

““

Once, it was a mystery how much banks paid their top performers. – Headhunters had information as did pay benchmarking firms, but the data was always parsed through third parties. Nowadays, we know exactly how much banks pay their most valued staff in London by virtue of the British BIPRU rules on remuneration disclosure.

The BIPRU rules state that all banks operating in London, U.S. banks included, must disclose the amounts they pay their risk takers and the structure of those risk takers’ compensation. These disclosures are typically made up to a year after those payments were made. Goldman, JPMorgan, Citi, Bank of America and Morgan Stanley have all now lodged their disclosures for 2016, meaning we know exactly how much they paid their most important staff over 12 months ago. The pertinent data from each bank’s filing is shown below. Bonus figures are only for bonus awarded in 2016 and don’t include earlier bonuses which vested last year.

The key takeaways are as follows:

In response to regulatory pressure, most banks continue to increase the number of employees categorized as ‘regulated staff.’ As juniors are added to the regulated staff pool, this is helping to cut average pay.
All banks pay their material risk takers a proportion of their bonuses in deferred stock. Most of these regulated staff have therefore benefited significantly from banks’ increasing share prices over the past six months.
If you want to make really big money, you need to work for Goldman Sachs. 32 people at the firm’s London office earned more than €5m last year and 10 Goldman bankers earned equal to or more than €9m. By comparison, only 14 people earned more than €5m at J.P.M. and Citi Global Markets, only nine did at Morgan Stanley and only seven did at BAML… Average pay at Goldman Sachs is just average. Top pay at Goldman Sachs is anything but.

1. Pay at Goldman Sachs International (in 2016)

Which external pay consultant does Goldman use? Semler Brossy Consulting Group LLC

Criteria used to determine pay at Goldman’s investment bank? At the business area and individual level, Goldman looks at pre-tax income, lost business, revenue and backlog, client team and activity, relationship lending history, ‘principalling’, key transactions, as well as franchise accretion. At the firm-wide level, it takes into consideration ROE, diluted earnings per share, book value per share, net earnings, net revenues, spending on compensation, the proportion of revenues that are spent on compensation, and non-compensation spending.

Allowances to regulated staff? Yes. Goldman pays cash allowances to most regulated staff affected by the EU bonus cap (although some get stock allowances).

Deferral policy? Stock bonuses are deferred over three years, with amounts vesting equally on the first, second and third anniversaries of the award date. However, even after stock bonuses have vested, individuals are also required to retain 100% (after tax) of their restricted stock units for up to five years after the award date. Goldman bankers are banned from hedging against their vested shares during this period.

Number of regulated staff in the UK in 2016: 724 (compared to 512 in 2015, 529 in 2014, 121 in 2013 and 115 in 2012).

Average salary (fixed remuneration) paid to each member of UK code staff in 2016: $838k (down from $1.1m in 2015, $903k in 2014, $721k in 2013 and $749k in 2012.)

Average bonus paid to each member of UK code staff in 2016 (based on share price at the end of the year): $538k.

Average total compensation for UK code staff in 2016: $1.4m (£1m)

Total value of sign-on bonuses paid during 2016: Goldman Sachs is doing away with sign-on payments. It only made four in 2016 and the highest one comprised 4,000 restricted stock awards. This was down from 31,000 restricted stock units paid to one person in 2014.

Distribution of compensation among code staff at Goldman Sachs in 2016:

Goldman Sachs code staff 2016

2. Pay at J.P Morgan in the UK (in 2016)

Which external pay consultant does J.P. Morgan use? Not stated.

Criteria used to determine pay at J.P. Morgan’s investment bank? Financial results, risk and control outcomes, client/customer goals (where appropriate), people and leadership objectives.

Deferral policy? J.P. Morgan doesn’t provide information on pay structure for 2016, but in the past Managing Directors at the bank were subject to a 35% minimum deferral irrespective of their level of compensation. Restricted stock units vest over three years, but vesting is skewed towards the end – 50% vest in year two and 50% vest in year three.

Number of regulated staff in the UK: 672 in 2016. .(Up from 644 in 2015, 586 in 2014, 209 in 2013,126 in 2012.)

Average salary (fixed remuneration) paid to each member of UK code staff in 2016: $784k. (Up from $749k in 2015, $455k (£297k) in 2013 and £326k in 2012.)

Average bonus paid to each member of UK code staff in 2016 (based on share price at the end of the year): $737k

Average total compensation for UK code staff in 2016: $1.5m (£1.1m)

Distribution of compensation among code staff at J.P. Morgan in 2016:

J.P. Morgan salaries London

3. Pay at Citigroup global markets in the UK (in 2016)

Which external pay consultant does Citi use? Frederic Cook & Co.

Criteria used to determine pay at Citi? Citi’s updated its criteria for awarding bonuses to staff (you can see the new specifications on page 51 here). On an individual level, it rewards people who ‘develop people’, ‘drive value for clients,’ work as partners, champion progress, live values and deliver results.

Deferral policy? Citi has also changed its deferral policies, Most bonuses are deferred for three years (down from four), but senior managers at Citi have their bonuses deferred for a full seven years. All recipients over restricted bonuses are subject to six month transfer restrictions (ie. they can’t sell the stock) after the bonuses vest.

Number of regulated staff in the UK in 2016: 525 (up from 450 in 2015).

Average salary (fixed remuneration) paid to each member of UK code staff in 2016: £428k ($580k).

Average bonus in 2016: £446k ($605k).

Total average compensation for Citi UK code staff in 2016: £874k ($1.2m)

Distribution of compensation among code staff at Citi in 2015:

Citi salaries bonuses London

4. Pay at Bank of America across the EU (in 2016)

Which external pay consultant does BAML use? Farient Advisors LLC.

Criteria used to determine pay at BAML? BAML staff in Europe are awarded bonuses based upon their results and their behaviour. They receive a rating for each. (BAML says, “Employees receive two ratings – a Result rating (based on objective metrics such as business performance) and a Behavior rating (based on subjective metrics such as contributions to the 4 Company, leadership, conduct, teamwork, etc.). The scale for both ratings is Exceeds Expectations, Meets Expectations, and Does Not Meet Expectations.”)

Deferral policy? Longer term equity-based pay awards are deferred over three years and must be retained for a further six months after vesting.

Number of regulated staff across the EU: 612 in 2016. (Up from 455 in 2015, 389 in 2014).

Average salary (fixed remuneration) paid to each member EU regulated staff in 2016: €518k ($623k).

Average bonus for regulated staff in 2016: €498k ($599k).

Total average compensation for BAML EU-regulated staff in 2016: $1.2m.

Distribution of compensation among code staff at BAML in 2016:

Bank of America salaries and bonuses

5. Pay at Morgan Stanley International (in 2016)

Which external pay consultant does Morgan Stanley use? Not stated.

Criteria used to determine pay at Morgan Stanley? On an individual basis, Morgan Stanley looks at contribution to revenue and profitability (whilst taking risk into account), teamwork, management abilities (including the ability to attract and retain core talent), at technical skills, adherence to core franchise values and business principles and policies and at market conditions.

Deferral policy? In line with UK regulations, senior managers at Morgan Stanley have a minimum seven year deferral, with vesting starting in year three, Risk managers have a five year deferral (with vesting starting in year one) and all other regulated staff have a three year deferral.

Number of regulated staff in the UK? 431 (up from 404 in 2015, 383 in 2014, 116 in 2013).

Average salary (fixed remuneration) paid to each member of UK code staff in 2016: £496k ($673k).

Average bonus for regulated staff in 2016: £550k ($746k)

Total average compensation for Morgan Stanley UK code staff in 2015: $1.4m

Distribution of compensation among code staff at Morgan Stanley in 2016:

Morgan Stanley salaries bonuses

Follow @MadameButcher

Photo credit: dollar close UP by Shai Barzilay is licensed under CC BY 2.0.

If you’re miserable in your current job, don’t assume you’re stuck. The robots may be coming for you, or your business area may be in structural decline, but there is hope – follow these steps to land a better Wall Street job.

1. Get a feel for the market

You shouldn’t blindly quit your job if there are no opportunities available.

Kim Ann Curtin, the founder/CEO of The Wall Street Coach, has seen burnt-out Wall Street professionals find something completely out of the industry, becoming everything from advertising executives, actors and yoga instructors to consultants and entrepreneurs. Others start their own hedge fund or find another niche within financial services.

“Talk to more than a handful of people to make sure it’s what you want to do,” Curtin says. “Especially if you’re no spring chicken, there’s not a lot of time to waste, so talk to people about the downside as well as the upside.

“If you’re miserable, you think any change will be an improvement, but sometimes the devil you know is better the devil you don’t know,” she says. “Offer to take people out to lunch, coffee or drinks and ask about the hours they work, the money you’re hoping to make and the negative aspects of the role.”

Chances are you have classmates and former colleagues who are at other banks, hedge funds or private equity firms. Seek out your contacts to see if they have employee-referral programs where they would endorse you for a job in a new area, says Janet Raiffa, the ex-head of U.S. campus recruiting at Goldman Sachs and a career adviser.

“The fact that you have connections within the firm who are willing to endorse you can help mitigate HR and line-manager concerns about a change in job sector or focus,” she says. “Applicants who come through employee-referral programs are more likely to receive first-round interviews and may already be seen as a culture fit because they have internal support.”

Get involved in an association related to your job target, suggests career coach Robert Hellmann, who previously worked at J.P. Morgan and American Express. That way, people in the organization will not see you just as bulletpoints on a resume but as that great person who was so helpful in the last meeting.

“Many Chartered Financial Analysts who have gotten involved in their respective CFA societies or the CFA Institute have had an easier time making significant transitions because of the relationships they’ve built there, Hellmann says. “For example, run an association committee, such as events, marketing or budgeting.”

2. Look internally

Career coach Michele LoBianco, who previously worked at J.P. Morgan, suggests exploring other opportunities across different areas within your current company.

“If you feel comfortable, have a career conversation with your manager and ask for support and advocacy,” LoBianco says.

“Ideally companies will support employees who want to make internal moves,” she says. “It benefits the company in many ways, because if they don’t, they’ll lose these employees.”

LoBianco worked with a portfolio manager at an asset management firm who thought he wanted to leave his organization, but it turned out that he really wanted to go for his executive MBA and then work in alternative investments.

“He communicated his desires, and that’s exactly what he got – the firm paid for his MBA and he was able to manage more alternative asset classes,” she says.

3. Show results

Changing careers, even within the financial services industry, is about proving that you can get results in the new area you’re targeting. Employers typically hire based on a track record of results, not potential, says Caroline Ceniza-Levine, career coach at SixFigureStart who previously worked at Goldman Sachs and Citi. A career-changer is a risk because you’re untested, and therefore, your job as the candidate is to mitigate their risk.

4. Bypass HR

Don’t just apply and then wait for the recruiter, HR executive or hiring manager to call, Hellmann says. You need to be “perfect” to get noticed through this channel, as this is the front door that everyone tries to go through.

“If your background doesn’t line up perfectly, that might be an issue,” he says. “The initial screen is often a computer or a junior HR person – someone who doesn’t really know the job and is just looking for keywords on your resume that line up with the description.”

Get introductions to get in front of people at the firm, or even contact personnel directly via email, phone or social media. Make meeting requests mutually beneficial and include something about them and what makes you interesting, Hellmann says.

“It’s not even about interviews at this stage – just meetings with people in a position to hire you,” he says. “Then, if you’re pitching yourself the right way, and you keep in touch with these people, and you’re having enough of these meetings, the interviews will come.”
Follow @danbutchrwrites

Photo credit: Comstock Images/GettyImages
““

Professor Benedict Koh (Associate Dean of Postgraduate Finance Programmes at Singapore Management University) has a clear vision for the future of Singapore as a leading global financial centre and a magnet for financial talent.

“The skills needed to succeed in finance are rapidly changing because of technology, and Singapore is increasingly competing with other finance hubs for market share. We can’t be complacent,” says Professor Koh). “We must act now to train and retrain our workforce so that the finance sector continues to support our economy and connects us to global markets.”

Singapore Management University (SMU) was recently appointed by the Monetary Authority of Singapore (MAS) and the Ministry of Manpower – Singapore’s central bank and department of labour respectively – to spearhead a government training initiative, SkillsFuture, across all areas of financial services, including wealth management, fund management and risk management.

“We have a wide range of programmes to prepare Singaporeans for a more technology-driven environment in the design, delivery and governance of financial services,” says Professor Koh. SMU, for example, runs several short courses – from compliance to blockchain – focused on the digital economy, and it has developed finance leadership programmes for more senior professionals.

If you want even deeper insights into the future of financial services, SMU also offers three world-class Masters degrees: MSc in Wealth Management (MWM), MSc in Applied Finance (MAF), and MSc in Quantitative Finance (MQF). MWM focuses on private banking and asset management, MAF concentrates on fund management, and MQF grooms talent in risk management.

The importance of these three sectors to Singapore’s status as a dynamic financial centre was reinforced in October 2017 when MAS highlighted them as key to its Financial Services Transformation Map, a new government blueprint for future growth.

“The three SMU Masters programmes are unique because they’re specialised, meant to equip one with current and specific skills in fast-growing areas of the finance sector,” says Professor Koh. “They’re designed both for current finance professionals who want to advance their knowledge, and for those outside the sector who want to move into finance.”

Career changes

Empowering people to make career changes is a crucial aspect of SMU’s collaboration with MAS. “There have been retrenchments in some areas of finance and further disruption is on the horizon. We’re preparing for this by offering programmes that retrain you into areas where opportunities are increasing,” says Professor Koh.

Wealth management is one of these fields. “There’s a lot of money coming into Singapore thanks to the growth of private wealth in the region. But there’s not enough talent in private banking and firms are raiding each other’s teams, which isn’t sustainable.”

The SMU MSc in Wealth Management, which is Asia’s only full-time wealth management programme and is ranked third globally (2017 FT Masters in Finance Post Experience Ranking), is helping to tackle these talent shortages. “It teaches aspiring and seasoned wealth managers the full range of hard and soft skills, from financial planning, tax regimes and business trust, to networking and relationship building,” says Professor Koh.

Like the MWM, the MSc in Quantitative Finance (MQF) is 12-months, full-time, and provides participants with technical expertise that is becoming increasingly sought after by employers in Asia. Straddling finance, statistics, computer science and financial mathematics, it is a launchpad for careers in risk management and related functions such as derivative pricing and algorithmic trading.

“More risk management jobs have opened up in recent years in Asia and this trend looks set to continue,” explains Professor Koh. “The MQF at SMU allows you to comprehend the risks and complexities of the financial markets. It gives you the tools to be successful in this expanding sector.”

Building an ecosystem

The fund management industry in Singapore is also earmarked for growth by MAS. “The Financial Services Transformation Map sets out to build Singapore as a fund hub, like what we’ve already done for shipping and aviation. While we have an advantageous tax regime here to attract funds, we must do more in the face of competition from other APAC cities, such as Tokyo, Hong Kong, Shanghai and Sydney,” says Professor Koh.

Singapore is now aiming to create a broader “ecosystem”, he adds. “The larger fund houses want everything based in one country. Singapore is well-established in equity and bonds, so MAS is now trying to create a critical mass in private equity and alternative investments like commodities.”

It’s also vital that Singapore has a strong enough talent pool to support the fund management firms recruiting locally, says Professor Koh. The SMU MSc in Applied Finance (MAF), which is offered in both 12-month full-time and 18-month part-time formats, is designed to help Singapore stay competitive in the sector and to provide aspiring and experienced professionals with cutting-edge skills.

Fintech future

The MAF, MQF and MWM are regularly updated to meet the career needs of finance professionals. From 2018, SMU is adding a fintech elective option (co-taught by staff from SMU’s Lee Kong Chian School of Business and School of Information Systems) for all three programmes. As part of Skills Future, the course is also open to members of the public at Government-subsidised rates.

“Technology will make some finance jobs redundant, especially in the back-office. We’re already seeing this with payments systems being outsourced and blockchain being used to automate trade finance documentation,” says Professor Koh. “On the other hand, to take advantage of fintech developments, financial institutions need to hire more people who are conversant in both finance and technology.”

The SMU fintech module will help with one of the main objectives of the Financial Services Transformation Map: retraining people to work in fintech. “There’s a huge skill shortage in fintech in Singapore, so boosting your knowledge in this area will give you an advantage in the job market,” says Professor Koh.

The course is aimed at people who want to launch their own company and those who want to move into a technology role at a bank. And it covers the technical essentials (including big data, cyber security, coding and blockchain) as well as the challenges of running a profitable fintech business.

Unique teaching

All modules within the three SMU postgraduate finance programmes are taught by senior SMU academic faculty, many of whom boast industry experience. “This allows us to deal with a wide variety of real-life problems that the textbooks don’t cover. And we can provide practical advice on how to handle these issues,” says Professor Koh, who used to work for J.P. Morgan Chase.

SMU also invites current finance industry practitioners – from banks and hedge funds, for example – into the classroom. “They’re domain experts who can tell you exactly what’s going on in the financial markets now. They bring state-of-the-art techniques and industry best practices into the classroom.”

Professor Koh describes the teaching style at SMU as “a discussion rather than a lecture”. “We encourage students to exchange different viewpoints with each other and the professor. You have to think on your feet, defend your ideas and accept criticism, just like you do at work.”

SMU curriculums are carefully designed to provide participants with comprehensive knowledge of their specialist areas: wealth management, fund management or risk management. “For example, we frequently discuss case studies of real companies in Asia and worldwide, so you see how the theory applies on-the-job,” says Professor Koh.

Providing this kind of career-focused training is an important goal of SMU to help Singapore develop the talent needed to consolidate its position as a leading global financial centre in Asia, he adds. “Our programmes will provide the necessary solid analytical tools, knowledge and perspectives you need to accelerate your career and be part of the transformation of financial services in Singapore.”

It’s 2018 and you’re thinking of quitting your job in finance. Other lives beckon: becoming a professional squash player, playing politics, writing a novel… However, two recent cases of banking escapism gone wrong may incline you to think again.

The first concerns Gary Cohn, the former COO of Goldman Sachs. Not so long ago, Cohn was tipped to replace Lloyd Blankfein as Goldman’s CEO. That was before he left GS opportunistically to pursue a political career as chief economic advisor to Donald Trump. Now that he’s not in banking, Gary is no longer a Master of the Universe, but a mere marionette in thrall to a greater power. The Hill reports that Trump has taken to publicly humiliating Cohn. “Now, if he [Gary] leaves, I’m going to say: ‘I’m very happy that he left.’ OK? All right?” Trump reportedly said at a recent press conference, while everyone laughed. “Come here, Gary,” Trump added. A diminished Cohn dutifully came upon command.

The second concerns Trevor Murray, the former UBS strategist who left his job (unintentionally) aged 41. As we previously reported, Murray has been having a very hard time since losing his job as a UBS CMBS strategist five years ago: he’s now working at a grocery store and earning $9 an hour. Murray’s story does, however, have a happy ending. The Financial Times reports that Murray won his case claiming that UBS dismissed him for blowing the whistle over pressure to write upbeat reports and that he is now due $900k in back pay and damages (plus interest).

Separately, Credit Suisse’s decision to vacate one of its London offices in Canary Wharf seems like bad news in a year when Brexit’s birds will come home to roost. However, it’s worth noting that the bank’s decision to cull London staff was made well before the Brexit referendum. Like Goldman Sachs’ decision to expand in Warsaw, Credit Suisse’s motivation for moving out of London is more to do with cost than constitutional issues.

Meanwhile:

“There are two main points of consensus: London will remain important and that there will not be a ‘new London’ post Brexit.” (Financial Times)

A median worker salary in Britain is about $38,493. In contrast, the average pay of a senior banker in 2016 was $1.06 million. (Reuters)

Brevan Howard’s macro fund had its worst ever year last year. (Bloomberg)

Crispin Odey’s long short fund fell 20% last year. (Bloomberg)

Someone at Robey Warshaw earned £37.3m last year. (Financial Times)

Stamford Harbor, Steve Cohen’s new hedge fund, wants 50 compliance officers for a “command team” to monitor its traders in real time. (Business Insider)

Deutsche Bank still says bonuses will be fine for 2017. (Financial Times)

2018 is the year Goldman will get a crytpocurrency trading desk. (Bloomberg)

Psychotic narcissists drink gin and tonic. (NY Daily News)

““

We’re one week into the new year, and Goldman Sachs has already made three big hires.

The firm has brought on board Matthew S. Rothman, former head of global quantitative equity research at Credit Suisse, Louise Singlehurst, a former managing director at Morgan Stanley, and Kevin J. O’Reilly, another ex-Morgan Stanley managing director and former advisory director at The Madava Group. All have joined as managing directors.

Goldman Sachs has been sharpening its focus on lateral hiring at senior levels since last year. During a presentation in September 2017, co-COO Harvey Schwartz said the bank had doubled its lateral hiring in the year to date.

Rothman, who comes with more than 17 years of experience, has joined Goldman’s New York office. In one and half years he spent at Credit Suisse from August 2016, he led a global team of analysts to help big investors make stock picks based on huge volumes of data and developed tools for running quantitative strategies for the company. An expert in quantitative equity research, his appointment at Goldman Sachs comes at a time when the firm is expanding its equities algorithmic trading business.

This is Rothman’s second stint at Goldman. He had started his career there as an associate in 2001. An ex-managing director at Lehman Brothers and Barclays Capital, he joined Acadian Asset Management as a director in 2011 before leaving for CS.

Goldman Sachs is also one among many investment firms that are looking to rope in top equity research analysts who can pull-in revenues under the new regulatory framework MiFD II. The new model, which came into effect last week, is likely to increase cost and erode profits. This makes Singlehurst’s appointment significant for Goldman. Based out of London, she has 17 years experience. Before joining Goldman Sachs, she was at Morgan Stanley, which she had joined in 2001. She served various equity research roles at the firm before becoming a managing director in January 2014. She headed European Luxury Goods and Brands equity research team covering stocks including LVMH, Kering, Richemont, Burberry, and Adidas.

Meanwhile, O’Reilly, who has 21 years of experience, is based out of Goldman’s New York office. Before joining The Madava Group in January 2017, he was a managing director at Morgan Stanley, where worked 12 years. While at Morgan Stanely, he headed investor sales, commodities sales, commodity lending and wealth management among other things. Some of his earlier stints include working as a vice president at Bank of America, Credit Suisse, and Deutsche Bank.

““

It’s happening again: Deutsche Bank is increasing salaries.

Senior vice presidents in M&A at Deutsche Bank in London say their salaries have been lifted from £155k to £170k ($203k to $230k) to bring them into line with salaries at U.S. investment banks in the City. VPs elsewhere in Deutsche’s investment banking division (IBD) say they’re waiting to hear whether they’ll receive a similar percentage increase at the end of this month.

Deutsche Bank declined to comment on its compensation, but the apparent increases follow comments from John Cryan last month in which he promised that Deutsche’s bonuses will be back to normal in 2017 and said the bank will, “raise salaries in some areas”.

The latest rises follow significant rises in VP pay at Deutsche in London in March 2016, when some VPs at the German bank saw their salaries go from £100k to £140k. This followed big increases for associates in 2015. Even so, as late as last February, there were complaints that VPs in Deutsche’s debt capital markets (DCM) team hadn’t had the pay rise and were receiving salaries significantly below the market. – An injury that was then compounded by Deutsche’s decision to pay no performance bonuses for 2016.

Unlike many U.S. banks, Deutsche doesn’t pay its London staff “role-related allowances” to top up their fixed pay under the European Union bonus cap. This makes salaries all the more important.

Deutsche’s decision to increase pay for experienced VPs suggests the bank is keen to retain its senior mid-ranking staff, possibly to the detriment of some of its more established (and more expensive) managing directors (MDs). As we’ve observed before, the bank can ill-afford to pay generous bonuses for 2017 after profits at the investment bank fell 25% year-on-year in the first nine months compared to 2016. The latest salary hikes may foreshadow a decision to focus available rewards on VPs.

““

People who don’t work in finance think bankers are all inordinately rich. This isn’t necessarily the case – especially at the start.

When I started out in banking in 1999 I was on a $40k salary. I’m not quite sure how I survived on that in NY City, but I did. I certainly wasn’t living the “banking life.” I was subsisting: staying late and having dinner at work on weekdays to save money. Sometimes I’d have dinner at work on weekends too – for the same reason.

I know people live on less, but it’s not easy. After tax, $40k doesn’t go far in NYC. My entire paycheck was spent almost before it hit my bank account.

Fortunately, though, there was also a bonus. Back then, I used my bonuses to pay down my college loans. My salary was for living (frugally); my bonuses were for reducing my debts. Within a few years, those bonuses meant I paid my college debts off in full.

As time went on, my salary rose. From $40k, it went to $100k and then to $150k. Given my past frugal habits, you might’ve thought I’d be able to save money from this higher salary, but I didn’t. I started spending more. In fact, I started spending my whole salary and even using a proportion of my bonus to cover my monthly expenses.

Sadly, this is a pretty common theme in finance. When you work in banking, your salary and your bonus often go up linearly, but your expenses and your cost of living go up exponentially (especially when you have children).

It’s called the burn rate – the rate at which you burn through your money. When I was in banking, my burn rate was $175k+. That’s low: even when I was spending “big” I was still pretty frugal. I have friends whose burn rates are $350k+: they need to earn $650k just to stay flat. Very few banks will pay you a $650k salary, so once you hit that level you’re almost certainly using your bonus too.

How does this happen? Tom Wolfe gives a steer in Bonfire of the Vanities. His banker protagonist, Sherman McCoy recalls where he spent last year’s paycheck, and it goes like this:

“I’m already going broke on a million dollars a year! The appalling figures came popping up into his brain. Last year his income had been $980,000. But he had to pay out $21,000 a month for the $1.8 million loan he had taken out to buy the apartment. What was $21,000 a month to someone making a million a year? That was the way he had thought of it at the time-and in fact, it was merely a crushing, grinding burden-that was all! It came to $252,000 a year, none of it deductible, because it was a personal loan, not a mortgage. (The cooperative boards in Good Park Avenue Buildings like his didn’t allow you to take out a mortgage on your apartment.) So, considering the taxes, it required $420,000 in income to pay the $252,000. Of the $560,000 remaining of his income last year, $44,400 was required for the apartment’s monthly maintenance fees; $116,000 for the house on Old Drover’s Mooring Lane in Southampton ($84,000 for mortgage payment and interest, $18,000 for heat, utilities, insurance and repairs, $6,000 for lawn and hedge cutting, $8,000 for taxes.[…more expenses I don’t feel like typing out…] The tab for furniture and clothes had come to about $65,000; and there was little hope of reducing that, since Judy was, after all, a decorator and had to keep things up to par. The servants…came to $62,000 a year…the abysmal truth was that he had spent more than $980,000 last year. Well, obviously he could cut down here and there-but not nearly enough-if the worst happened!

Sherman was on the hedonic treadmill. I’ve written about it here before: it’s very easy to get on and very difficult to get off. When you’re on it, you find yourself not just wanting but needing certain things. Things you think you can’t do without. A better house, a better car, summer in the Hamptons or the south of France, nights out, new clothes, a second home.

I see it all the time. It’s not your fault: it’s the human condition. Humans quickly adapt to circumstances and then want more. We look around and see our friends doing something and it becomes normal.

What you need to remember though, is that just because you can afford to buy something this doesn’t mean you should. Banking is not a stable career choice: people often get downsized and you could easily find yourself with expenses you can’t sustain and debts you can’t pay off.

For some, the awakening happens too late. When they are in their forties, with little saved up.

I spoke to a friend who’s 58 recently, he had lost a lot when Lehman went down, and then had to pay for his kids’ weddings. There he was, theoretically just a few years from retirement but needing a job that pays $500k because he had no savings.

Stop spending your bonus. Start saving your salary. Get off the treadmill, before you get thrown off.

The author is a former Goldman Sachs managing director and blogger at the site What I Learned on Wall Street (WilowWallStreet.com). What I Learnt on Wall Street is an education focused business founded a group of Wall Street veterans from the best firms determined to help the next generation. They just launched: Smart Cuts to the Top, a live course delivered on Jan 24th.

““

A banking to the buy side to fintech career path – or just banking to fintech – is becoming as common as the tried-and-true banking-to-the-buy-side move.

Take Vikas Srivastava, the chief revenue officer of Integral, a fintech firm providing cloud-based workflow management and FX trading software to banks, broker-dealers and asset managers based in Palo Alto, California. After six years as the head of currency risk management at Barclays Global Investors (later acquired by BlackRock), Srivastava became a managing director at Citigroup, where he worked for close to 10 years. At the time, the bank was Integral’s biggest client.

“When I first got to know the firm in 1997, Integral was one of the first firms that could deliver a cloud-based system to price complex derivatives – the origin of the firm is foreign exchange technology, building the foundations of what is today called electronic FX,” Srivastava says. “At the time, there was no such thing as EFX.”

In the summer of 2007, Srivastava decided to leave banking to start his own technology-based hedge fund that implemented high-frequency trading, Cogence Capital. It goes without saying that his timing couldn’t have been worse. Despite persevering for three-plus years, in 2010 Cogence closed its doors and Srivastava joined Integral, a firm he’d worked with for around 13 years.

“I had a huge amount of fun with Cogence Capital, but the business didn’t scale as much as it needed to,” Srivastava says. “Looking at what I might do next, given that I’d known the people at the company for a very long time, it was a natural move.

“I wanted the chance to build new products, open up new client segments and take advantage of regulatory changes,” he says. “The idea of working at a Silicon Valley company that builds market-leading fintech products, I found that to be extremely exciting.”

Who Integral will hire in 2018

Ever since Srivastava joined, Integral has been bringing on people from banks and the buy side, as well as computer engineers and other technologists, and that will continue in the coming year.

“We are always in the market for talent, and the skill sets we prioritize depend on which group we are hiring for,” Srivastava says. “We are always looking for top engineers, and it’s beneficial but not necessary for them to have some domain experience.

“We value experience with the technology that we use here, candidates who are familiar with the latest and greatest in low-latency trading, what it takes from a hardware and software point of view to make that happen,” he says. “We do look for people who can be technical account managers, who have business experience and technical knowledge, so they can fill the gap between the field and the genius developers.

“We have brought in some really smart people from the domain, people with experience in FX, trading, especially e-trading, salespeople with actual experience at banks, business development or e-commerce, innovators who can imagine and conceive of new products that address gaps in the market, from conception to delivery, and the capacity to bring it to our clients.”
Follow @danbutchrwrites

(d.location)?'http':'https';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p

+'://platform.twitter.com/widgets.js';fjs.parentNode.insertBefore(js,fjs);}}(document, 'script',

'twitter-wjs');

Photo credit: Bill_Dally/GettyImages
““

If you’re looking for a job on Wall Street this year, you could always try Canadian bank TD Securities: it’s adding staff in an effort to gain market share.

TD’s latest hire is Spencer Haimes, a veteran debt capital markets banker with a 23-year career on Wall Street. Haimes joined TD as a managing director in December 2017. He previously spent four and a half years at Credit Suisse and nearly 15 years at UBS.

Haimes’ arrival follows a report in the Toronto Globe and Mail last September claiming that TD had added 300 people in New York in the previous three years, bringing the bank’s headcount in the city to nearly 900. The growth appears to be focused on capital markets and follows TD’s move into Deutsche’s former office in the city.

Haimes isn’t TD’s only recent senior hire. In September it recruited Ross Levitsky, Deutsche’s former head of TMT corporate banking coverage.

Haimes’ exit from Credit Suisse comes curiously close to bonus time. It follows the Swiss bank’s November 2017 investor day, in which the bank said it had been rehiring MDs into its investment bank, but reiterated its intention of cutting costs.

Credit Suisse ranked in ninth place for U.S. marketed debt capital markets deals last year according to Dealogic. This was up from 10th in 2016.

““

Deutsche Bank isn’t the first bank to draft in Goldman Sachs veterans to turn it around and it won’t be the last. – Bank of America did a good job of channeling ex-Goldman staff in its hour of need and still has many in positions of power (most notably Tom Montag as COO). But while Bank of America hired in plenty of ex-Goldman staff to its markets business under Montag, it’s never actually been run by someone from Goldman Sachs (John Thain was ejected three weeks after the Merrill Lynch merger). Deutsche may yet have this pleasure by the end of 2018.

So suggests German newspaper Handelsblatt. Following Friday’s admission that Deutsche is expected to make a small loss for 2017 and that sales and trading revenues at the German bank fell 22% in the fourth quarter of 2017, compared to a year earlier, Handlelsblatt says pressure on Deutsche CEO John Cryan is increasing. It doesn’t help that Cerberus Capital, the distressed private equity fund with a 3% stake in Deutsche, is said to be pressing for results. Cryan desperately needs performance at Deutsche Bank to pick up in the first quarter.

And if it doesn’t? Handelsblatt points out that ex-Goldmanite Marcus Schenck is waiting in the wings. As we observed last year, Schenck has already amassed a cluster of ex-Goldman Sachs bankers to reinvigorate DB’s trading business – including, most recently, Peter Selman, Goldman’s ex-head of global equities. With Schenck in charge of the entire bank, Deutsche’s transmutation into a sort of Germanic version of Goldman Sachs would be complete.

Of course, it might not happen. Cryan could stay. And if Cryan goes, Schenck may not replace him – Handelsblatt notes that Christian Sewing, head of Deutsche’s private bank, is also in the running to become CEO. Sewing is a Deutsche Bank lifer with a background in operational risk and audit. If Sewing takes over, Deutsche will be less like Goldman Sachs under Lloyd Blankfein and more like Barclays under ex-retail banking boss Antony Jenkins. 2018 will be crucial to its future.

Separately, if you have neck pain you are not alone. In an article about the medical facilities at Goldman Sachs and elsewhere, the Wall Street Journal quotes a doctor dispensing to Goldman bankers who’s observed a condition he calls, “investment-banker neck.” This is, “an arthritis that can afflict people in their late 40s, particularly ones peering at lots of monitors,” and sounds pretty painful. If you work for Goldman, you will at least get assistance with your neck cramp, alongside various other ailments. – The bank boasts a dermatologist, a gynecologist, an orthopedist and other physicians on-site in New York City. Goldman bankers won’t have to queue to see a doctor if they get Australian flu.

Meanwhile:

Deutsche Bank shares fell to a two month low as markets digested its loss. (The Street)

Shares in Barclays, led by the more obviously banker-friendly Jes Staley, have performed even worse than shares in Deutsche Bank over the past year. (Financial Times)

Cerberus won’t be pushing for Deutsche Bank to merge with Commerzbank. (Reuters)

UBS is ahead of its plan to double Chinese headcount over five years and could have 1,200 staff in China by the end of this year. (Straits Times)

The rabbit in Barclays’ hat? A possible merger of its international corporate and investment bank with Standard Chartered, which will be under discussion around the turn of the year. (Financial News)

Deutsche has reserved several hundred places at international schools in Frankfurt. (Financial News)

RBS trader fined £250k ($339k) for manipulating LIBOR. (Reuters)

Brexit advice to banks from Nigel Farage, (Reuters)

““

Related articles:

Counterfactual comparisons

Failure to communicate

Bonus size > liking what you do

Alpha dog

Tying self-worth to bonus size

Prioritizing work and earnings over family

Right-size your expectations

Related articles:

1. Anything negative

2. Anything irrelevant

3. Politics and religion

4. References

5. Unnecessary words

6. Jargon and acronyms that are specific to your current company

7. Salary information

Related articles:

1. In your early 20s you can earn three times more in investment banking than the average job

2. You probably shouldn’t step off your investment banking career before you’re AT LEAST 34 years-old

3. People elsewhere in ‘banking’ don’t make this money

Related articles:

1. Put the time in

2. Think concepts, not questions

3. Don’t spend time on the more technical subjects

4. Know the bell curve rule

5. Train for what you’re getting yourself into

6. Make sure your study material is up-to-date

7. Go above and beyond

Handy hint: The hardest Series 7 questions, with expert answers

Related articles:

Boosting gains and avoiding losses

Bring your A-game

Related articles:

Related articles:

Related articles:

Related articles:

Related articles:

1. Get a feel for the market

2. Look internally

3. Show results

4. Bypass HR

Related articles:

Career changes

Building an ecosystem

Fintech future

Unique teaching

Meanwhile:

Related articles:

Related articles:

Related articles:

Related articles:

Who Integral will hire in 2018

Related articles:

Related articles:

Meanwhile:

Related articles:

**3. People elsewhere in ‘banking’ don’t make this money**