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When you sit down for your Christmas meal next week, spare a thought for the sales team of investment banks across the City and Wall Street. Turkey dinners are great, but what if the meal on Christmas Day was your tenth in the last few weeks?

For sales teams, the build up to Christmas is a battle for survival. Planning starts in early autumn; you don’t want to miss out on availability at the best restaurants or private rooms, or – worse still – the shame of clients being booked up to be wined and dined by a competitor.

The first to go are your Thursday evenings. Then Friday lunchtimes, mid-week evenings and then – finally – team dinners mean that you’re booked up every single day. From drinks with colleagues and last minute client lunches to the full-on client dinners with dusted-off senior managers included, the battle just to keep going begins.

One week to go before Christmas and you’re at the limit, with gout just one more forkful away and your liver quickly becoming permanently pickled. So, the last thing you really want on Christmas Day is another turkey or mince pie.

I spent 15 years in the City and have seen most things. Every year, you could pretty much guarantee that at least one client would drink too much and start a fight with another one. Salesmen had to be the mediator, and also try to avoid getting smacked in the head when trying to calm the situation down.

Early in my career we took clients to a festive Somerset House, compete with ice rink, and two clients thought this would be a good place to square up to each other and settle their differences. Needless to say, they weren’t invited back. This is the challenge – alcohol is necessary at these events, but it can potentially be a career limiter. In sales, you have to drink to keep clients happy, but never become the source of an embarrassing anecdote.

However, times have changed since the financial crisis hit. A leaner more conscientious banking industry is emerging and sales may actually be breathing a sigh of relief as a result. Entertainment budgets have been slashed at the banks, and how much the recipient counterparties are allowed to accept are under extreme scrutiny.

Gone are the days of those boozy lunches infamous to the UK’s gilt market and those extravagant all-nighters, let alone those crazy hedonistic, dodgem wielding, all you can eat and drink, banking parties.

The norm was previously trying to grab a mid-morning sleep to recover. You even have time to hit the gym to keep the flab at bay now. Times have changed.

Some things have changed the same though: there’s still too much eating and drinking, even if the extent of the over-indulgence is less than previously.

You also need to be aware that clients have the same dilemma – it’s not like they want to have back to back dinners with sales that keep them away from their families all December. Now, healthier meet ups – a game of five a side football or a jog (really) – are more common. If you think that’s too Scrooge, you could always have a mince pie with your client coffee.

If you’re good at your job, clients will appreciate a healthier gesture. And for sales teams across the City, livers can be pickled in the company of friends and family instead.

Simon James has worked in fixed income sales roles in the City of London for 16 years at Barclays and Credit Agricole. He left finance earlier this year and is now the founder of Run the Wild, which offers long-distance running holidays.

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So, 2017 it is then. As we pass from the coming winter solstice (December 21st) to the next summer solstice (June 21st 2017), banks in London are going to undergo a celestial transformation.

We all knew there were dark forces at work beneath the twinkling of the bells and the chinking of the glasses, but it’s taken the likes of Nomura, Mizuho and Daiwa to make it clear that this can’t go on. In 2017, contingency planning becomes reality.

In banking terms, it’s called “optionality”. Optionality is simply a bankery way of saying you’re keeping all your options open. Optionality is what banks had for a long time with their Asian equities businesses, before deciding to close them down. It’s also the approach they’ve been taking to their London operations since the Brexit referendum: keeping their options open, waiting to see how things settle before choosing a definite course of action. However, there becomes a point when inactivity becomes more costly than activity, and the Japanese seem to think that point will arrive next June.

The Financial Times reports that Japanese banks have informed the British government that they will start moving jobs out of London in June 2017 if the UK has not made progress in its negotiations with Brussels and replaced the current passporting system with something similar. In combination they employ more than 5,000 people.

Theresa May’s conspicuous snubbing at this week’s Brussel’s summit doesn’t bode well for the Japanese stipulation. Nor does the fact that, as Politico pointed out yesterday, other EU countries are more interested in Theresa May’s trousers than the UK’s Brexit agonies. In the EU Brexit has been lumped together with the other troubling issues of day, like instability, terrorism, refugees and populism. There’s simply not the commitment required to negotiate with the UK and formulate the kind of bespoke plan the UK requires.

Brexit, in a single shot. This morning at the EU summit. pic.twitter.com/1WlKeekRQy

— Daniel Sandford (@BBCDanielS) December 15, 2016

This is a problem for banks, who’ve been hanging on for a continuation of passporting, or some kind of “equivalence plus”. The first would require the UK to capitulate on immigration quotas unless EU partners are willing to negotiate Norway-style access to the single market in return for a fee. The second would require EU partners to engage strongly with the UK and for the two parties to negotiate an arrangement whereby EU finance regulations can’t be altered overnight in a way that would damage the City. Both will require considerable input from negotiating partners in the EU. Unfortunately, other members of the EU are going to be busy with other things next year.

The chart below, from banking analysts at J.P. Morgan, shows just how many other issues EU leaders will have to deal with next year – and their potential outcomes. Add in President Trump, and Brexit couldn’t be happening at a worst time.

JPMorgan political risk You could argue that the Japanese banks are a special case. As we’ve consistently pointed out, banks like Nomura aren’t profitable in Europe: they can’t support one large European office in London, let alone a London hub and an EU hub. For them, it’s therefore all or nothing.

However, it would be deeply wrong to assume that other more profitable U.S. banks aren’t watching costs too. We’re in the age of banking efficiencies and nowhere can afford to rack up costs unnecessarily. Why would any bank want two large European hubs (one in the EU and one without) when one could do?

Add to this the fact that it takes years to shift banking operations from one country to another (HSBC said it took three years simply to move a thousand people from London to Birmingham), and the Japanese won’t be the only banks starting to make hard decisions about the future of their London operations next year. Christmas 2016 is still buzzing in the City of London. Christmas 2017 might be a lot more subdued.

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Photo credit: Meeting the Grinch by Loren Javier is licensed under CC BY 2.0.

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If you’re a person of culture who likes the finer things in life (poetry, philosophy, classical music, the dramatic arts), banking might not be for you. If it is, you might want to work at Morgan Stanley. There, however you might also find yourself outnumbered by ‘jocks’ who like sport.

So says our analysis of the public profiles of employees at nine major banks, and what they do in their spare time.

As the chart below shows, the very vast majority of people in banking like neither the finer things in life nor sport – or at least are not saying so on their publicly visible CVs. This might be because banking is a famously all-consuming career and downtime is limited. At most banks, fewer than 2% of employees claim an interest in the cultural activities listed above, and fewer than 4% claim an interest in sport or football. The exception being Deutsche Bank, where a full 5.2% of staff can be ascribed jock status.

Notably, though, it’s only at Goldman Sachs where the minute proportion of jocks are outnumbered by the minute proportion of people with an interest in ‘cultural activities.’ Strangely, and contrary to national stereotype, there’s not much in the way of high culture going down at the French banks.

Is this significant? Probably not, but it’s worth bearing in mind if you happen to be a structured credit trader who writes poetry on the side.

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It’s been a year to endure rather than enjoy in Hong Kong banking. While private banks continued to hire and Shenzhen-Hong Kong Stock Connect provided a glimmer of year-end optimism, 2016 wasn’t the best of times for those searching for work.

We look back on some of the key trends affecting banking careers in Hong Kong over the past 12 months.

1. Closures and cut backs at global banks

Equities sales and trading jobs at global banks were in the firing line in early 2016. Barclays, Deutsche Bank, BNP Paribas, CLSA, Nomura, CIMB and Jefferies all trimmed their teams in Hong Kong as they struggled for profitability following the Chinese stock market rout and falling local trading volumes. In the second half – as it became clear that investment banking revenues weren’t meeting expectations – Goldman Sachs and BAML starting axing underperforming directors and MDs. Earlier this month, Credit Suisse had to slash its profit projections in Asian investment banking, while last week UBS reportedly cut up to 20 bankers in Hong Kong and Singapore.

2. A tipping point for Chinese banks

As redundancies hit global banks, their Chinese rivals have been better able to attract bankers in Hong Kong. CITIC Securities and China Securities were the top two firms for Asian investment banking revenues for the first nine months of 2016, according to Dealogic. And the former is hiring for its M&A and ECM teams in Hong Kong in a bid to become a full-service investment bank there. “This year marked a shift in power towards Chinese IBs in Hong Kong,” says Adam Jeffes, associate director of financial services at recruiters Morgan McKinley. “They pay less in base than their international peers, and this translates into more competitive pricing for IPOs and bond issuance. Their deeper relationships with wealthy individuals and company owners in China gives them an edge in deal sourcing.”

3. Juniorisation really took off

With their senior front-office ranks depleted, global investment banks in Hong Kong continued to ‘juniorise’ teams by handing extra work to associates and VPs. “In 2016, banks had stricter budget controls in place and emphasised internal promotions and retention of existing staff,” says Jack Leung, senior manager at recruiters Hays. “Many banks expanded the roles of current employees in an attempt to upskill them and potentially save money by not making replacement hires.”

4. More moves from IB to wealth

While Credit Suisse’s investment bank struggles for profitability in Asia, its private bank has been hiring in Hong Kong and remains on track to meet regional revenue targets. “I’ve seen more large banks, particularly UBS and Credit Suisse, move investment bankers into their private banking arms to originate deals,” says Jeffes. “The deal size for these transactions is likely to be comparatively small – perhaps lower than they would have considered taking on a few years back. But it’s still a source of competitive advantage over Chinese banks.”

5. The tech talent shortage became clearly visible

In 2016 the government stepped up its efforts to promote Hong Kong as a fintech hub, but several experts pointed out to us that the city doesn’t have enough technologists to meet demand from both banks and start-ups. “Tech has become more important to banks in Hong Kong and more fintech start-ups are launching here, but we don’t have enough technologists in the city so we suddenly find ourselves in trouble,” Arthur Wong, head of IT at China Construction Bank (Asia), told us at a conference in November. “Young people in Hong Kong have always gravitated towards jobs where they can make fast money – medicine, law, trading – and traditionally technology hasn’t been on this list.”

6. Getting a job became more laborious

Landing a job interview, or even an initial chat with a recruiter, was hard enough in Hong Kong this year – but you then faced an abnormally lengthy hiring process. In a downbeat labour market banks could afford to be fussy about who they took on. “Recruitment procedures and the time it took to make an offer to candidates were double what they were in 2015,” says Leung.

7. Candidates became more cautious

As the year wore on, recruiters say candidates – from the back office to the front – retreated into their shells. “People looking for jobs became increasingly cautious in 2016 and less proactive with their searches,” says Maggie Li, associate director of banking and financial services at recruitment agency Randstad. “I expect this trend to continue due to fewer job options available and news of retrenchments leading to increased concerns about job security.”

8. Attitudes to contracting shifted

Large banks in Hong Kong have been upping their use of contractors in tech and operations over the past three years – but they’ve traditionally struggled to attract talent. “In 2016, however, candidates have become more flexible and open to accepting contract roles,” says Matthew Dorrell, director of banking and finance at recruiters The Edge Partnership. “Banks have faced increased job-approval and headcount pressures and have also made sure that contract roles are more appealing to candidates by offering slightly higher salaries and medical benefits.”

9. Compliance people burnt themselves out of banking

Across Asia there are 53 financial regulatory change every day on average, according to Thomson Reuters. As we reported last month, Hong Kong’s legions of compliance officers are now working longer hours and increasingly suffering from burnout. But where are they going if they want to transfer their skills into a less stressful environment? Insurance became a more viable option this year as more compliance jobs opened up in that sector. “There was a rise in demand for compliance roles in insurance throughout 2016 because of new regulations being developed by the Independent Insurance Authority in Hong Kong,” says Adam Johnston, managing director of recruiters Robert Half in Hong Kong.

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Image credit: cosmin4000, Getty

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Thanks to the maze of intermediaries between wealth-creating citizens and the assets they collectively own, corporations have never been more divorced from their duty to serve their owners. Building on ideas from their recent book, What They Do With Your Money, David Pitt-Watson and Stephen Davis explain what has happened.

The simplest reason we call our system ‘capitalist’ is because those who own the capital decide who will run the companies in which they invest, in order to be sure that their wealth is protected. But here is a perspective that is often overlooked. The ultimate owners of company capital are millions of people around the world saving for pension and other contingencies. We typically, and rationally, delegate the job of overseeing companies in our portfolios to financial institutions that manage our money. So big fund managers such as Blackrock or Axa or Nippon Life, for example, will vote in our name on the board members of the companies in which they hold shares on our behalf.

But can we be confident that such agents are configured to put our interests first? Will they act as the best possible stewards of our capital? Observers, long focused on how companies act, are now turning the spotlight to how such investing agents behave. And what it reveals is hardly comforting.

For one, agents may have tenuous accountability to their ultimate capital providers. If we lose trust in board members of our pension fund, for instance, we may have no recourse available to us to oust them. Worse, financial agents often provide scant information on everything from their own governance, to the way they exercise rights on our behalf at portfolio companies, to precisely how much in fees they subtract from our nest eggs each year. That makes it nearly impossible for any consumer-investor to get a reading on whether an agent is truly acting free of conflicts, and is properly active in advancing our interests.

The challenge is magnified because, in the space of a generation, we have seen a massive proliferation in the number of financial intermediaries operating between us, the savers, and the companies in which we invest. That further attenuates accountability between corporate boards and ultimate owners. Moreover, funds have embraced portfolio strategies compelling them to invest in thousands of companies, but without ramping up a parallel capacity to truly oversee each of them. It is not uncommon for a big mutual fund, for instance, to employ just one or two individuals to manage voting shares in our name at 10,000 plus portfolio companies worldwide. The truth is that the investor discipline of acting as a “capitalist”—that is, overseeing the companies we own—is the most under-resourced corner of the capital market. Combine that with another trend—the shift to investing through derivatives, which can separate the economic interest in a company from its owners—and we face a double assault on the pillars of market capitalism. We are creating “ownerless corporations” with no-one responsible for overseeing their activities. And we are tolerating too many unaccountable financial agents, who separate us from our capital.

Reasons to be cheerful

There is, however, some cause for optimism. The root cause of dysfunction is not chronic fraud or dishonesty. It is market architecture that has fallen obsolete. Pragmatic fixes are at hand to re-animate the ability of owners to exercise ownership.

For starters, grassroots capital providers have new groups to champion their interests at financial bodies. ShareAction, the London-based NGO, has gained traction advocating accountability and transparency among investment agents in the UK. It is launching a related initiative—the European Responsible Investment Network—for continental Europe. Moreover, technology and social media could prove a force multiplier in advancing such efforts.

Take the example of Buycott, a free app launched in 2013, which aims to help consumers align their values with their purchasing. The first question it asks is: “Have you ever wondered whether the money you spend ends up funding causes you oppose?” You can scan a product at a store to see if the company that produced it is involved in any ethical campaign you support. Now, let’s imagine a smartphone tool that asks a parallel question: “Have you ever wondered whether the money you save ends up funding causes you oppose?” It could compare pension or defined contribution savings plans, providing you with a picture of how accountable each is, how fees compare, and how well or poorly they align with what you believe. That’s a gap waiting to be filled.

Tech approaches hold other promises. Today, those with a defined contribution pension plan can easily summon online pages filled with latest data on holdings, transactions, and stock prices. But what’s conspicuously missing are real-time updates on how the funds you own have voted in your name at portfolio companies on key issues such as CEO pay, or engaged in your name with boards on climate change. Funds now have access to technology that would make this straightforward.

Another emerging technology could help retail investors vote shares directly at companies they own. In the US, individual investors account for 27 percent of the average company’s shareholders, but they are deterred from voting by the complexity of the system. While institutions vote 90 percent of their shares, individuals vote just 29 percent of theirs. But “Advance Voting Instructions” (AVI) allow investors to vote automatically, with or against the management, or with a well-known third party such as the giant pension fund CalPERS, or with the recommendations of a proxy-voting agency. While widespread AVI is not yet available, it is being examined in the US by the Securities and Exchange Commission (SEC) and the American Business Conference, a trade group of mid-sized companies.

Empowering citizen investors

Alongside 21st century technology, tested solutions such as disclosure and best practice principles can also play a powerful role in reframing markets.

Most nations around the world now have a national corporate governance code in place for publicly traded companies. Studies show that these codes have succeeded in making corporate executives answerable to boards, and that executives behave better when they know directors are watching them.

Institutional investors are also in the midst of an accountability evolution of their own. Proliferating stewardship codes spell out how financial agents should behave as owners of public companies and, in particular, how they should monitor corporate boards.

But who is watching the institutional investors on behalf of the ultimate providers of capital, the citizen investors? So far, we have no equivalent authoritative guidance addressing that critical piece of the investment chain. And as long as we savers have little voice, the system quite rationally has no structural motivation to pay attention to us. At the end of the day, rebooting capitalism is our job.

In our book*, we propose approaches designed to empower savers. Reforms could include, first, encouraging retirement plans to disclose the equivalent of a nutrition statement, so that consumers can learn in plain language whether their agents are configured to act in their best interests. Second, fund management companies should disclose exactly how much money they deduct from client accounts.
Third, 800 years after Magna Carta asserted the accountability of government to its citizens, we suggest a Magna Carta that asserts the accountability of financial institutions to their investors. A charter would lay out what citizen investors should expect of their financial institutions, including the principle that agents act as good owners on our behalf, are open and transparent, and that fiduciaries, or asset managers, are accountable and responsive to those who supply them capital.

Taken together, these steps would enable citizen investors to restore a healthy market focus on sustainable, long-term value. The capital market cannot any longer afford investment institutions to be absent without leave.

Want to accelerate your career in finance? Discover how our Masters in Finance and portfolio of finance short courses could make a difference to your career and your organisation. Find out why.

“Why capitalism needs a reboot” was originally published on the London Business School site and was written by David Pitt-Watson and Stephen Davis.

Raucous banking Christmas parties may be consigned to the past, but this doesn’t mean it’s not possible to create your own Wall Street legend if you try hard enough.

Right now, there’s quest to find out the identity of a young trader who partied a little too hard on Thursday during his work Christmas party. By 7pm, he was completely hammered, according to Business Insider, and had managed to throw up on the founder of his company by 8.15pm. It didn’t end there.

The party started at sleek Manhattan venue Club 21, but by morning, he had woken up in the Bronx with no phone, no wallet and no recollection of how he got there. At this point, you might maybe think of going home to tidy up a little – shower, change your clothes…

Instead, he somehow retrieved his phone and called his office at 9.15am to see if he should come in. He did so in a suit now covered in holes. And gets sent home.

This anecdote might pale in comparison to, say, the 2004 Goldman Sachs Christmas party, which allegedly involved a fight between a banker dressed as a chav and a banker dressed as a Dalmatian. But, it’s captured the imagination of Wall Street and many have been trawling their Bloomberg terminals trying to uncover his identity.

Initially, he was thought to work at Weeden & Co, but this has since been denied. The mystery continues.

Separately, Deutsche Bank has been toying with ways to cut back on bonus payments for a while. At one point there was talk of paying staff with toxic assets from its non-core unit after being slapped with the massive $14bn U.S. Department of Justice fine for mis-selling mortgages. Instead, it seems it’s going for a straightforward cuts. Senior staff at Deutsche Bank are likely to receive “retention cheques” instead of any sort of bonus, according to the Sunday Times, while juniors will still get a bonus, but a decidedly more diminutive one.

This is hardly a big shock in truth, as Deutsche Bank was always set to slash bonuses after a difficult year. But CEO John Cryan has never been a fan of bonuses anyway, and early this year pointed to a “new compensation framework” that would see lower bonuses and “higher fixed pay from 2016 onwards”.

Meanwhile:

EU Brexit negotiators will get to the UK to agree to a ‘divorce’, which will ensure banks move people to the Eurozone (Financial Times)

20% of UK hedge fund employees come from the EU. Not surprisingly, it’s top of the list of demands (Financial Times)

Lloyd Blankfein is the real winner from Goldman’s management shake-up (WSJ)

The average partner pay at KPMG is £582k ($727k) – a 7% drop on last year as it redirects funds to hiring for technology expertise (The Times)

UBS is cutting about 20 jobs – largely in the mid-ranks – in Asia as it scales back (like most international banks) in the region (Straits Times)

How bonuses influence active managers’ investment style (Financial Times)

HSBC has promoted Paul-Henry Bacher, who it hired from Credit Suisse, to global head of fixed income e-trading (Financial News)

Deutsche Bank is paying $37m – about half that of Barclays and Credit Suisse – for misleading clients over its dark pools (Bloomberg)

The EU stands to lose from a hard Brexit – financial services will become more expensive (Financial Times)

Citigroup is investing in a fintech firm which aims to stop flash crashes in the FX market (Bloomberg)

Never mind capital, banks aren’t making enough money (Bloomberg)

Some foreign investment banks are paying just 6% tax in the UK, as opposed to the 20% corporate tax rate (Reuters)

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Photo: Getty Images

If you want a quick way of getting a bigger title, it pays to move from a top bulge bracket investment bank to a smaller player in the City. So it is with Vaheesan Sinnathamby, an executive director at Goldman Sachs, who has just joined Haitong Securities.

Sinnathamby worked in fixed income credit sales at Goldman Sachs until May this year, but has just joined Haitong Securities as a managing director in emerging markets sales. He joined Goldman Sachs in 2007, straight from City University London, where he studied engineering.

As we’ve mentioned previously, trading a bulge bracket bank for a smaller, aspirational player is a good way to secure an senior title that is proving elusive at a larger firm.

Chinese investment bank Haitong has certainly given the impression that it has aspirations to be a bigger player in London. Last year it said that it planned to hire “hundreds” of bankers across Europe and the Americas and double the size of Banco Espírito Santo de Investimento, which it acquired in 2014. However, its UK hiring spree where it went from 50 FCA-registered employees in May 2015 to 77 people in March this year has proven short-lived. It now has 59 front office employees in London, according to the FCA register.

But Goldman Sachs’ sales teams – particularly in FICC – have been slimmed down throughout 2016. Goldman said in March that it was cutting 10% of its 2,500 fixed income currencies and commodities sales and trading staff in March. As we said at the time, a number of managing directors and partners were forced out of the door, but headhunters suggested that at least 40 London-based jobs were set to go.

And while Haitong may be open to picking up talent from larger banks, it’s also been cutting elsewhere. Around 50% of its equity research division were let go in May.

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Photo: Getty Images

It’s nearly Christmas and probably not the time of the year you want to be thinking about looking for a new job. But, if you want to launch your search in the New Year, it’s worth noting that a number of tiny UK-based hedge funds have just launched. Here’s our pick of the firms to gain approval by the Financial Conduct Authority (FCA) in November, which is tracked by corporate finance boutique IMAS.

1. Engadine Partners

Engadine Partners, is a new hedge fund set up by the former deputy chief investment officer at Egerton Capital, Marcello Sallusti. It’s been slowly building its team in the run-up to authorisation last month. Jonathan Rodgers, a former Goldman Sachs research analyst who latterly worked for Egerton as an analyst and portfolio manager, has signed up as a partner. Engadine has even managed to persuade traders to move across to the UK from Spain – Filipe Correia da Silva, the former head of equities for Iberia at Cheuvreux, who was most recently country head for Spain and Portugal at MainFirst Bank in Madrid, also joined as a partner.

2. Exor Investments

A new UK arm of the Italian investment company, Exor Investments has hired some senior hedge fund portfolio managers. Dariusz Kieszkowski, who was latterly a partner at Eton Park Capital Management, has joined as a partner. Victor Bundhoo, who was formerly COO at Farema Capital, is head of operations, and Matteo Scolari – another Eton Park portfolio manager – has also joined the team as managing director.

3. Incipit Capital

A new quant futures hedge fund launched by former BNP Paribas derivatives traders, Incipit was given the regulatory thumbs up in November and so far has just the two founding partners as employees. Alessandro Gavazzeni, a former interest rates options trader at BNP Paribas, is one co-founder, along with Stefano Galluccio, the former head of exotic interest-rate and hybrid derivatives trading at the French bank.

4. Sempera Partners

Another small hedge fund set up by former senior traders in investment banks, Sempera Partners also has just two employees. One, Alex Tesei, is a former managing director and prop trader at J.P. Morgan, while the other, Daniele Baldi, was previously at UBS for 15 years until late last year.

5. Systematica Investments

This is the quant spinout of Bluecrest Capital Management that has been running for over a year now, but has just received regulatory approval. Assets under management have risen to around $10.2bn since it became an independent entity. In London, it now has eight employees registered with the FCA – largely former Bluecrest employees.

6. Valeur Capital

Valeur Capital, a more traditional asset-manager with multi-asset investment approach, has been hiring from large investment banks as it builds up its London operation. Alessandro Noceti, a former director at Credit Suisse joined in 2016 as did Davide Natale, who was in an FX sales job at Goldman Sachs, while Andrea Macchi, a former VP at Deutsche Bank, joined the group at the end of 2015. Andrea Sirtori and Marco Mattachini moved across from other Valeur offices.

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When Rehan Islam was asked about his interests during a graduate interview with Goldman Sachs, he told them straight up – he likes to rap. Rather than a raised eyebrow and a quick note on his CV, the interviewer issued a challenge – show me what you can do. It worked.

“I mentioned that I rap in my first trading interview and they asked me to perform. They liked it,” he says. “You may think everyone going into the City fits in a certain box, but for a banker all graduate CVs start to blend into one, and they want to see something different.”

Islam joined Goldman Sachs as an analyst in structured finance trading in 2010, and moved to a similar role at Societe Generale in 2013. But in September he quit SocGen and left banking. Now, he’s not only started his own fintech company, but has also released a new rap album focused on his time on the trading floor. Islam has swapped baggy leisurewear and ostentatious jewellery for a straight grey suit and a Canary Wharf backdrop. And the album – Fire In The Belly – is an introspective look at his time during the City.

“It might seem esoteric to rap about trading and Wall Street, but it sits within the tradition of the genre,” he says. “Rapping about your reality, your emotions within that reality and being introspective is what’s important. That reality can be the trading floor of an investment bank or the Queensbridge projects in New York.”

At times, Islam is rapping about the excitement of working on a trading floor:

I see plenty men that look wealthy and plenty that look with envy
and plenty that made a milly by their late twenties
High fives, cheers, boisterous sounds
Traders banging phones and kicking over tables it’s loud

At other points in the album, he seems to regret his decision to go into finance:

There’s a kind of emptiness rotting my brain
And deep down in my belly I don’t feel any flames
But do I have the right to complain
I just followed the path that was placed in my way

Despite this, Islam says he’s not taking a “stance” on investment banking.

“I’m just exploring how I felt and how that evolved,” he says. “I used to sit behind Bloomberg screens thinking of rhymes as a way to unwind. I’m interested in the idea of using rap to explore emotions and drama in professional environments the way TV shows and movies have done. Hopefully, that’s positive for the City.”

Islam grew up in Saudi Arabia, where he says U.S. rap is very popular, but moved to the UK to attend London School of Economics (LSE) in 2005. He studied a BSc in Economics, before taking a Masters in Management and Economics there and graduating in 2009. In other words, he’s the type of student that banks look to hire. Studying at LSE, you are quickly surrounded by banks’ graduate recruiters, he says, and people make a decision to move into financial services without really thinking about their reasons why.

“You’re always competing for the next round in a tournament,” he says. “You need to get the best grades to get into the best university, to get a top banking job and then the best title, which in trading these days means being very specialised. Add to this the bleak outlook for trading jobs and the proposition isn’t as attractive. The mindsets of the artist and the entrepreneur are more attuned to learning new things, solving problems and creativity.”

Islam’s reflection on life in the City should resonate with a lot of young analysts, he says.

“On one level, the music might appeal to the analyst on their commute to work wondering why they are working in investment banking. But I think it’s universal – we all chase goals, we all have to pay the bills and our work is an important factor in our emotional well-being. I’m reflecting on the ups and downs that come with it,” he says.

Now, Islam has a few ventures running – a social media marketing agency, a peer-to-peer lender – but he’s also using rap for career advice. He’s starting a series of talks which he says are “TED talks crossed with rap”, where he performs the songs and expands on some career lessons belying the music. Right now, the target is university finance societies, but he hopes to get some City firms on board too.

Rap career advice touring investment banks? Surely this is a far cry away from the impoverished roots of the genre. But Islam disagrees.

“Rap has matured. You should be able to do well at school and university and be a professional and still relate your experiences to the music you listen to,” he says. “Rap is poetry and art to me. I like the idea of playing a role – however small – in expanding its frontiers, in terms of which context it can be applied to.”

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Contact: pclarke@efinancialcareers.com

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Fintech firms are in a battle with larger financial services companies for technology talent with an understanding of the financial services industry. These three technology companies in the U.S. are hiring next year – here’s why.

Avoka

Don Bergal is the chief marketing officer of Avoka, a fintech firm that provides software-as-a-service (SaaS) for everything from account opening, loan and credit card applications or applying for a government license or service.

“Our customers selling to large institutional and business customers, and they are looking for us to handle back-office processing and their customers’ digital experience,” Bergal said.

Bergal says that the majority of the jobs that Avoka is currently recruiting and hiring for widely are technical positions – software engineers, architects and consultants who want to work with financial customers on fintech projects. Software skills are more important than financial services knowledge.

Avoka has been hiring aggressively. In the past year, it has grown from about 80 employees to about 140 worldwide.

“We’re bringing people in as fast as we can, and not just sales and marketing folks, but also customer implementation and support, as well as technical positions,” Bergal said. “We grew 70% in five or six months, and next year we will add another 50 positions worldwide, technical roles for the most part, plus customer support and business-development positions.”

Avoka’s headquarters is in Sydney, while its largest office is Broomfield, Colorado, a suburb of Denver. It also has a London office.

The technical positions at Avoka include software and web development, including coders fluent in Java, HTML5 and application architecture. The firm also needs to add more personnel to strengthen its customer-facing presence in building applications for big enterprises.

Redtail Technology

Redtail Technology, a Web-based customer relationship management system for financial advisers, added 10 employees in 2016, with the customer-service department experiencing the largest amount of growth in headcount. The firm also added to its sales, training and development teams this year, driven by an increase in demand for integration with third-party software, customer assistance and training on new customers using the firm’s products for the first time.

Redtail plans to add 15 more employees in 2017.

“We are targeting growth in all departments, with customer service experiencing the largest growth,” said David Mehlhorn, director of sales at Redtail. “We have seen a significant change in the training and adoption roles, not only within Redtail but within the fintech industry as a whole.

“There is a significant push by broker-dealers and [other financial] institutions to begin mandating or at least strongly pushing advisors toward the adoption of technology,” he said. “For Redtail and the CRM space, we are seeing broker-dealers and [wealth management] institutions take a great interest in how their advisers and [registered] reps utilize the technology.

Orion Advisor Services

Orion Advisor Services, a wealth management technology and service provider, added 56 new people in 2016 and is on target to end the year having increased net headcount by 64. The largest areas of increase with staff were accounting and IT personnel.

Eric Clarke, CEO of Orion, anticipates a total of 29 net new hires for 2017. Again, the majority of the hires will be in accounting and IT roles. The firm hires for roles at its offices in Seattle, New York and Omaha.

“The area where it is the most difficult to hire is in relation to IT developers,” Clarke said. “We see opportunities in fintech focused on trying to help advisors comply with the new DOL regulations and to have technology that is on par with robo-advisers.”
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There are over 40,000 people every year who take the Financial Industry Regulatory Authority’s Series 7 examination, with only two-thirds passing. The others need to tell their new boss that they won’t legally be able to trade securities – likely not a fun conversation to have.

The key to passing the Series 7, and all tests really, is preparation. But just putting in the hours may not be enough. You’ve got to prepare strategically. Below are seven things about the Series 7, or the General Securities Representative Exam, that you may not be aware of, courtesy of Brian Marks, managing director at Knopman Financial Training, a New York-based FINRA licensing exam preparation firm.

Keep them in mind as you put in all the work and before you walk in that building.

Gain as much insight as possible from each practice question.

Many candidates believe that the best way to prepare for the exam is by completing as many questions as possible. However, they do not spend enough time reviewing the items they get wrong or those they do not fully comprehend. Just because you get a question right, does not mean you fully grasp the concept. Instead, every question should be used as an opportunity to dive deeper into the topic to ensure that the concept is fully understood. Not only should candidates know why the right answer is correct, but also why the other three answer choices are incorrect. Going back into the textbook after each question is a great way to add additional value.

Don’t skip the book.

Many registered reps advise only completing tons of practice questions and not reading the book. In fact, a large percentage of candidates who pursue this strategy do not pass. Do all the work and you will increase your chance of passing the exam on the first try.

The test emphasizes understanding products with less focus on rote memorization.

Over the past few years, suitability, meaning the appropriateness of recommendations, has taken center stage on the exam. Expect to receive many scenario-based questions asking what might be the most appropriate investment strategy for a customer given their financial and non-financial needs. To do well with these types of questions, it is important to have a strong understanding of the different types of securities products as well as the benefits and risks associated with each. Also, keep in mind that the answer choices to these questions will not always 100% align with the test-takers personal viewpoint, but that it is all about picking the best answer of the options provided.

Certain topics get all the attention, but it’s not always the path to a passing score.

The big two on the exam, according to most reps who have taken the exam, are municipal bonds and options. But these topics only account for about 25% of the exam and that percentage has declined in recent years. Don’t forget about topics such as investment companies, retirement plans, annuities and direct participation programs. Each of these topics could likely account for 10-15 questions.

There are multiple ways to a passing score on the examination.

The exam is approximately 30% math (e.g. options, margin and convertible bonds). Some candidates feel strong in the math and will plan to score well there, allowing for a slightly weaker performance on the regulations. Other candidates “fear” the math – that’s okay too. Candidates who are stronger on the qualitative concepts and regulations and count on many of those questions on the exam.

The exam environment is highly regulated.

When going into the exam, the testing center will provide you with a basic 4-function calculator, an erasable marker and an erasable note pad. You cannot bring any of your own materials to the exam. If you want to simulate test conditions, go to an office supply store and purchase these items. This will help make you more comfortable on exam day.

Keep abreast of rule changes.

The FINRA Content Outline specifically notes that candidates are responsible for staying abreast of all rule changes. So, if a new rule goes into effect just prior to your exam, that topic is fair game. Be sure to follow-up with your training provider prior to the exam for any recent rules changes.
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Are you planning to move jobs in Asian banking in 2017 or wondering how to advance your career at your current firm?

We’ve spoken to several senior finance professionals in Hong Kong and Singapore this year who’ve offered their top tips for getting ahead in your career.

Become a sensitive banker

As Asian revenues fall in investment banking and margins tighten in wealth management, front-office staff have had to deal with more disgruntled clients. Jullie Kan, vice chairman of South East Asia private banking at Credit Suisse, says she wants to develop “sensitive” relationship managers who are able to deliver bad news to clients. “We want our bankers to be equipped to have this kind of conversation, in a tough market environment and not just when it’s a bull run. We want them to experience upheaval situations where they understand that it takes a lot more sensitivity when handling a client’s emotions.”

Get a “game changer”

Most banks dish out mentors to their staff. If you get one, work hard on the relationship as it could benefit you beyond your current firm. “In any banking career two or three people will be your game changers”, says Pascal Lambert, Societe Generale’s head of Southeast Asia and group country head for Singapore. “You may have benefited from their mentorship and they may offer advice which could create opportunities for you to consider.” One of Lambert’s “big career breaks” came when he followed a former colleague and mentor to Bear Stearns in 1993. “I became their first Hong Kong employee and I set up the derivatives team for them there. It was new and exciting.”

Milk your tough times

Is your bank a stressful place to work right now? Perhaps it’s offshoring staff away from Singapore and Hong Kong? You may be able to use this to your advantage. Michael Dargan, Standard Chartered’s Singapore-based CIO of corporate and institutional banking, says he has no regrets about the tough times he faced helping Merrill Lynch with the Asian aspects of its merger with Bank of America. “While it was the hardest experience of my career, it was among the best because it prepared me well for any challenges I faced later.”

Have a “tech bias” even if you’re not a techie

Banking professionals must “be agile and embrace ambiguity”, says James Mendes, head of Asia Pacific recruitment at Citi. “Being agile means having the ability to deal with the rapid pace of technological change in banking. You don’t know what your role will be in five years.” You must also have a “tech bias” in your thinking, he adds. “For example, think about robotics process automation and the digital requirements of the customer. There’s a misconception that technology will end banking jobs. It won’t – it will shift jobs to other parts of the organisation, let people get on with what they’re good at, and create new opportunities for learning and development.”

Career changes take a lot of networking

Finding your dream banking job is difficult in the current employment market in Asia, but if you can get yourself into a large bank, you can eventually work your way into the career change you want. Singapore-based Sean Kang, who now works for consultancy McLagan as a director in wealth management, initially joined Credit Suisse in a business development role. “It wasn’t product structuring, it wasn’t my ideal role. But once you have your foot in the door you must then build up internal networks and a good personal reputation at the bank – so that’s what I did,” says Kang, who later moved into the firm’s structured solutions unit.

You will never know it all

“Earlier on, when I moved jobs within the firm, one of the biggest challenges was learning to work with my in-built desire to try to ‘know everything’ before changing jobs,” says Sophia Leung, Asia Pacific CIO at J.P. Morgan. “Over time I realised that this was unrealistic and that as a manager, building a strong team around me – with diverse and specialised skills and knowledge – is vital to both the team’s success and my own.”

Look beyond the glamour of a front-office role

Vincent Choo, head of risk at OCBC, was once given a choice of two roles at a previous bank: a senior sales job, or head of Hong Kong market risk. “I chose risk because I thought it would offer better career longevity and because I wanted to remain on the other side of the fence but still be connected with the markets.”

Convert to a specialist tech role

Work in a mundane tech support role? Your bank may be willing to train you up to do something more exciting. China Construction Bank (Asia), for example, is converting generalist IT staff into specialist jobs. “We’re transitioning IT infrastructure guys, for example, into AML and security roles,” says Arthur Wong, head of information technology. “We usually target younger people for retraining – those who we think are more outgoing and open to change.”

Be honest as a new manager

“On the first morning in charge I wanted to run back into my office and close the door,” says Russell Graham, a former head of service and solution delivery at Standard Chartered, of his initial experiences managing a big team. “So I formed a cross-mentoring society with the other manager and I was honest with my staff – I said ‘I’m new to this, so be open with me and say when you think I’m wrong’.”

Be more light-hearted

Adding an appropriate touch of humour in the office “can help you get through difficult situations with a smile”, says former Deutsche and UBS banker Benjamin Quinlan, now a Hong Kong finance sector consultant and part-time comedian. “It’s not about making a mockery of your work, it’s about enjoying your work more.” Quinlan says his stand-up act has improved his professional skills. “The more shows you do, the better you get at reading the audience. This is an important skill when you’re making a presentation as a banker or delivering a difficult message as a consultant.”

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If you’re a salesman dealing with smaller, low touch clients, you should be feeling scared. Investment banks are increasingly less tolerant of client relationships that aren’t helping bring in big profits. They are, in effect, telling clients lower down the totem pole to start spending more or take their business elsewhere, thank you very much.

Deutsche Bank has scaled back coverage of approximately 3,400 clients. Morgan Stanley, HSBC and Citigroup have separated their clients into tiers based on their profitability, instructing staff to spend more time on big-spending asset managers and less time working with the less-profitable ones, according to Quartz. Citi has a group elite hedge-fund clients known as the “Focus Five.”

The latest move in the banking industry’s trend of winnowing down customer lists to the ones that produce significant profits? Barclays, which is about to tell 7,000-plus clients to trade more with the firm or find another bank to do their trading, according to Bloomberg. That is in addition to the 17,000-plus bank clients that it has culled since 2014 in response to tougher capital rules that make dealing with smaller firms less profitable.

Barclays wants at least a 10% return on capital from every client – those that fall under that threshold will be given the option to do more business with the bank or leave in a “managed transition.”

Many banks have talked about focusing on top-paying customers, ramping up the competition for those target firms, many of them asset managers. If every financial institution whittles their prized customers down, there will a lot of overlap among those preferred bank clients, and the problem of stiff competition will get worse the more customers bank cut. That lead to increasing importance for the senior sales staff with rock-solid relationships with big-spenders, but is not so good for everyone else.

Separately, Mark Nordlicht, a founder and chief investment officer of the New York hedge fund Platinum Partners, David Levy, co-chief investment officer, and five others were arrested and charged with perpetrating a billion-dollar fraud.

Senior Platinum staff allegedly used new investor money to pay older investors. They are also accused of overvaluing the assets that Platinum invested in and misrepresenting the performance of certain funds, inflating the value of some significantly.

In 2012, after an explosion on a platform in the Gulf of Mexico operated by Black Elk, an oil and gas company controlled by Platinum, resulting in the deaths of three workers, various other injuries and an oil spill, the firm was unable to pay all of its investors back, so executives allegedly decided to pay some ahead of others.

At its peak, Platinum managed nearly $2bn and its flagship fund consistently reported double-digit returns for investors, according to the New York Times.

Meanwhile:

There’s a new, huge DoJ fine: Credit Suisse has been told cough up $7bn (£5.7bn) to settle charges toxic mortgages, but the final number is likely to be closer to $5bn (£4bn). (Reuters)

Deutsche Bank is expected to settle with the DoJ by the end of the year, and the number will be much smaller than $14bn (Reuters)

Trump has tapped billionaire owner of the Florida Panthers hockey team and founder of the high-speed trading firm Virtu Financial, Vincent Viola, as secretary of the Army. (Business Insider)

Viola and Gary Cohn know each other from their days at the New York Mercantile Exchange. (Financial News)

Meet the two men with Dodd-Frank’s fate in their hands (WSJ)

Trump’s sketchy plans could go badly wrong (Bloomberg)

Wells Fargo is charging into a ETFs next year (Bloomberg)

Spire Europe has appointed Simon Dove the head of liquidity management responsible for securing liquidity provision agreements with investment banks. (Financial News)

If UK banks aren’t given a staggered departure from the EU, they could sue (Reuters)

Fed chairwoman Janet Yellen told graduates, “economists are not certain about many things, but we are quite certain that a college diploma or an advanced degree is a key to economic success.” (New York Times)

Why adults want to do ‘children’s’ jobs (Financial Times)
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If you’re a seasoned rainmaker with a host of close client relationships gathered over decades in the industry, quitting a bulge bracket investment bank seems like a logical thing to do. The likes of Robey Warshaw and Hannam & Partners have shown that it’s possible to make waves in the advisory space with a small team.

But what if you were were an executive director? Could you make the leap to start your own corporate finance advisory firm as a mid-ranking investment banker?

Antoine Noblot, a former equity capital markets investment banker at Goldman Sachs, has done just that. He has just started Klimt Advisory, a consultancy firm focused on corporate finance, capital markets and financing, corporate governance and investor relations.

Noblot joined Goldman Sachs in 2010 as an associate in ECM, from J.P. Morgan where he held the same position, but was promoted to executive director in 2012. He started his investment banking career in equity research at Deutsche Bank in 2002, but moved across to an M&A role at Rothschild in 2003.

Starting your own firm during a relatively tough period for investment banking advisory is a bold move, but Noblot’s public profile says he is currently “retained full-time on a confidential mandate”.

What’s more, ECM is undoubtedly an uncomfortable place to work right now, particularly in EMEA. New figures from Dealogic suggest that EMEA ECM volume dropped 38% to $174bn in 2016 after an already difficult 2015. The UK was the biggest market in Europe, but deals were still down by 34% to $40.8bn. Goldman Sachs finished second in the league tables in EMEA, with an 8.4% market share. J.P. Morgan was top with 10.4% of the total.

Noblot’s move is in-keeping with the trend of investment bankers leaving bulge bracket firms to start their own operations. Peter Bell, the former head of UK M&A at BAML, started corporate finance boutique Cardean Bell last month, while Peter Bacchus, who was joint head of investment banking and global head of metals and mining at Jefferies, is also in the process of gaining regulatory approval for a new company called Bacchus Capital Advisors.

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Frankfurt might be winning the major battle for UK-based investment banks as they contemplate which functions to move after Brexit, but Dublin is still a player. The Irish capital has already secured asset managers, potentially Lloyds of London and the prime services division of Credit Suisse. Expect at least some other investment banks to choose it as a base if they’re forced out of the City.

But, banks are not simply moving people to these locations – they’re cutting jobs in London and opening vacancies in Dublin. This presents a problem – pay. Dublin is more expensive than London for expats and offers nothing like the salaries you’d get in the City. For the trading jobs that are available in Dublin, most employers have either relied on the local workforce or Irish expats willing to take a significant haircut on their London salary for a move back home. If there’s a sudden influx of jobs, traders are likely to have to relocate and settle for a smaller package.

New figures from recruiters Brightwater suggest that front office jobs in Ireland simply do not compete with London wages. A senior trader working in Dublin earns €90-140k (£75.6-117.7k), but starting salaries for those lower down the tree come in at €45k (£37.8k). Salaries for portfolio managers in London come in at £130k, according to PwC figures – usually with a 100% bonus – while portfolio managers in Dublin earn €95k (£80k) at the upper end. Senior portfolio managers can earn €145k (£122k), however.

At the moment, banks are not talking about shifting equity research roles out of London, but should they decide to do so salaries are decidedly less competitive in Dublin. Junior equity researchers can start on €30k (£25k), suggest the figures.

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Should you be one of the tiny proportion of junior investment bankers who makes it through to a private equity interview, it’s easy to assume that it’ll be the same old fit and motivational questions asked. After all, private equity firms actively hunt down the best analysts in investment banking and interviews are more about ensuring you can fit into smaller investment team than questioning your technical skills.

It’s true that private equity firms focus a lot on the ‘beer test’ of ensuring you’re going to fit in with the organisation. They also spend a lot of time testing financial modelling skills during the interview process. But there are also the questions that will throw you. Here are the more difficult questions asked at Blackstone, KKR, Bain Capital and Goldman Sachs Principal Investments, based on interviewees on Glassdoor:

When you have two companies that are similar but with different valuation multiples, describe what could be the cause of that. (Blackstone)

Which bond is more valuable, the one with only one payment at maturity or the one with periodic payment along the time till maturity? (Blackstone)

If you had questions that no one had answers to, how would you handle it? (KKR)

If your investment increased 20% and you now have $60 how much did you start with? (Blackstone)

If our firm wanted to sell one of our business units, how would you go about valuing that segment? (Blackstone)

Would you rather win the lottery today and get $1m lump sum now or earn $2,000 every month for the rest of your life? (KKR)

How do we make money? (Blackstone)

When flipping a coin infinitely, is the pattern HHT or HTH more likely to appear? What is the probability that one appears before the other? (Blackstone)

What does our business do? (Goldman Sachs Principal Investments)

You operate a trucking company that ships supplies between Las Vegas and Los Angles. How would you think about growing revenues? (Bain Capital)

How would you decide on the expansion strategy for a food catering company subsidiary in France, considering the competitive environment (Bain Capital)

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Exchange traded funds (ETFs) have grown to new heights in 2016. Assets under management in ETFs have swelled to $3.445 trillion this year and they now account for nearly a half of all stocks traded in the U.S. Not surprisingly, expertise in this area is highly sought-after and senior staff are moving even now.

Brendan McCarthy, a managing director in Goldman Sachs’ equities sales team, has just moved across to BlackRock. There he’s a managing director in its iShares division focused on sales.

McCarthy worked for Goldman Sachs since 2001, as a vice president in its equities sales team in New York. He worked in Tokyo for three years until May 2009 when he switched across to a role in Hong Kong to manage its pan-Asia equities sales team there.

McCarthy moved back to New York in 2013 to join its US portfolio sales team. This focuses on portfolio products like ETFs and synthetic equity products. He left the investment bank in May and joined BlackRock earlier this month in its iShares capital markets team.

The battle for assets in the ETFs space has been heating up this year, with US banks’ asset management arms increasingly getting in on the act. Goldman Sachs has been successfully luring assets and J.P. Morgan has responded by aggressively building its ETFs business. BlackRock, meanwhile, has just lowered fees on some its ETFs by up to 20 basis points as part of the price wars around the products.

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Would you work for a clearing house? Options Clearing Corp. (OCC), the largest equity derivatives clearing house in the world (with 14 U.S. equity options exchanges and 115 clearing member firms) is hiring. It added 56 positions this year, largely in technology but is about to start recruiting for data analytics, application development and business process management.

“Experience in regulated and process-driven environments is very helpful as individuals who come from these environments are able to understand the nuances of not only the technical work but the need for documentation and control,” said Tracy Raben, senior vice president and chief human resources officer at OCC.

There are a good number of former traders working at the clearing house. But while prior experience in the financial services industry is nice to have, it’s not a must-have to get hired by OCC.

“We have physicists, people from banking, insurance and a number of other industries,” she said. “Traders with experience in financial markets who have sought a different career path have been successful here as well.”

Raben expects OCC to remain at about the same total headcount as in 2016, with a continued focus on information technology, audit and risk management roles when the firm does make hires.

“Application developers, systems analysts and risk management professionals will be our top priorities,” Raben said. “Based on what we are seeing in the financial services industry, cybersecurity professionals, data scientists, data analysts and business process analysts will be in demand. We are seeing candidate salary expectations in these areas increasing, which is a sign of high demand,” she said.

Raben looks to add personnel to support its 14 owner and partner exchanges, which include the NYSE, Nasdaq and the Chicago Board Options Exchange, as well as the 115 clearing member firms that transact the equity options contracts that OCC clears.
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It was generally a year of redundancies and tepid recruitment in the Singapore finance sector. But there were still banks and job functions that provided the labour market with a few bright spots.

We review some of the big trends affecting banking careers in Singapore in 2016.

1. The big guns took over private banking hiring

Although wealth management remained the most buoyant part of the Singapore finance sector in 2016, the hiring was concentrated in the hands of a few. DBS and Bank of Singapore grew their RM ranks by buying the Asian wealth units of ANZ and Barclays respectively, but it wasn’t all about acquisitions. Credit Suisse was the most rampant recruiter – taking on 100 new RMs across Asia in the year to end-September. Julius Baer and Standard Chartered also tapped talent keen to leave rival private banks that are struggling to eke out profits in Asia.

2. Compliance costs took their toll

Compliance problems suddenly got very localised for banks in 2016. The Monetary Authority of Singapore shuttered the local offices of BSI and Falcon Private Bank, and fined DBS and UBS in a clampdown on alleged money-laundering by Malaysia’s scandal-hit 1MDB fund. As we reported in October, private bankers are spending more of their time dealing with regulatory issues. And banks haven’t been able to slow down their compliance hiring either – good if you work in the function, not so good if you don’t. “Bonuses this year will reflect lower profit margins due to continued investment into compliance,” says Anita Sim, regional head of front-office for LMA Recruitment.

3. Senior investment bankers struggled

Investment banks in Singapore continued to cull directors and MDs as Southeast Asian IB revenue suffered its lowest first-nine-month level since 2005. Goldman Sachs trimmed senior Singapore bankers in September as part of a regional restructuring, while in November Standard Chartered axed about 15 corporate finance MDs. Earlier this month, Credit Suisse had to slash its profit projections in Asian investment banking and UBS reportedly cut up to 20 bankers in Asia. In Hong Kong, however, redundant bankers could at least consider joining Chinese banks like CITIC. In Singapore, experienced bankers found themselves short of alternatives. “Senior roles are particularly limited at the moment, so it will be more difficult than usual to land an equivalent role at a similar bank in these muted market conditions,” Angela Kuek, director of search firm Meyer Consulting Group in Singapore, told us last month.

4. Landing a job took longer

Getting a job interview, or even an initial chat with a recruiter, was hard enough in Singapore this year – but you then faced an abnormally lengthy hiring process. In a downbeat labour market banks could afford to be fussy about who they took on. “Banks have become much more cautious in terms of hiring, which means longer hiring timelines and more rounds of interviews, and also have increasingly stringent requirements with respect to technical skills and product knowledge,” says Alena Salakhova, regional director of recruiters Hudson in Singapore.

5. More job offers just fell apart

As banks like Deutsche and Standard Chartered carried out wave after wave of restructuring in 2016, recruiters report an uptick over the last 12 months in banks pulling out of offers. “I had candidates who received a verbal offer and then during the final approval process the banks said the position no longer existed because it was filled by an internal employee or it just hadn’t been approved,” says Komal Mehta, a partner at recruitment agency KS International in Singapore.

6. But change managers were suddenly more sought after

One positive result of all that restructuring? Change managers were increasingly in demand, in 2016. “Large and complex change-delivery projects in areas like digital, data, compliance, human capital and banking strategy were being defined and rolled out,” says Yani Johan, a consultant at recruiters Astbury Marsden. “As a result, a number of banks in Singapore are recruiting change management and transformation talent. The consulting houses are also hiring more financial services strategy consultants to service them.”

7. Digital banking came of age

Demand for digital banking professionals picked up in 2016, says Ivan Tang, a former Societe Generale banker, now managing partner at recruiters Tangspac Consulting in Singapore. Global banks like UBS and Credit Suisse, for example, are developing online platforms to help relationship managers communicate better with clients. Singaporean banks, meanwhile have been “lagging behind” in digital banking implementation, says Tang. They are trying to catch up and are now hiring more technologists with HTML5 and mobile-banking experience.

8. Bankers become fintech employees

Bankers setting up their own fintech firms in Singapore is nothing new, but in 2016 more finance professionals started joining existing tech companies as employees. “There are a lot of bankers on the market who are disillusioned working in investment banking or private banking,” says Singapore-based Dominic Gamble, CEO of fintech firm Findawealthmanager and a former Credit Suisse private banker, told us earlier this year. “We particularly target associate level – they’re well trained and academically strong, yet are amongst the most disappointed with the banking sector.”

9. Contracting took off beyond tech

“There was an increase in the number of vacancies for contract or temporary roles in 2016,” says Ben Batten, country general manager of recruitment firm Volt in Singapore. “In the past these have been largely limited to technology jobs, but now we’re seeing contracts in areas like procurement, the middle office and finance.”

10. Offshoring didn’t end

Global banks began offshoring technology and operations jobs away from Singapore about four years ago – 2016 proved that the trend is far from over. Barclays, for example, moved more than 100 IT jobs to India in September following a previous round of relocations in May. The Republic may be reinventing itself as a hotbed for fintech innovation, but offshoring primarily affects lower end tech and back-office jobs. Professionals still employed in these functions are increasingly looking for alternative careers as we head into 2017. “The international banks have squeezed the last few pennies out of their operations, and staff are constantly waiting for that dreaded phone call alerting them of pending redundancy,” a recruiter in Singapore, told us previously.

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You’re a 50-year-old former trader used to earning £1m ($1.2m) a year who suddenly finds yourself ostracised from the City over the Libor rate fixing scandal. What next? How about re-releasing a 1990s house music classic?

Danny Wilkinson, was fired from a broker at ICAP after being implicated in the global Libor rate fixing scandal. He was eventually acquitted, but has been “exiled” from the industry, according to Bloomberg.

These days he dons a lab coat and 3-D glasses and tours UK festivals playing with his house music collective, Hellsinki-V. They’re on the cusp of releasing a remix of Baby D’s 1990s classic Let Me Be Your Fantasy.

“After 25 years in the City, I suddenly found myself at home thinking ‘what do I do now. I’d DJ’d at lots of acid house parties in the 80s and I always had a love of music.”

Wilkinson is one of four profiles of former brokers and trader embroiled in Libor. Brent Davies, who also worked at ICAP, has become a film extra – and has featured as a member of the rebel alliance under Colonel Akbar in Star Wars: Episode VII-The Force Awakens.

Terry Farr says he now earns a 10^th of his City salary selling plants and bulbs at a market in Essex commuter town, Brentwood. Like Wilkinson, he was acquitted but couldn’t go back: “You’re tarred with that brush,” he said.

Separately, Eric Ben-Artzi, who blew the whistle on false accounting at Deutsche Bank but turned down a $3.5m award from the SEC because of lack of action against senior executives at the bank, has given an interview to the University of Chicago Booth’s Guy Rolnik.

If you’re wondering about the consequences of doing the ‘right thing’, it’s worth noting that Ben-Artzi didn’t fully realise the impact of his actions immediately.

“What happens next? When are you going to tell me why it’s proper what we’re doing with the valuation of these trades?”, he asked the head of compliance. “He pretended not to hear me and said, ‘I don’t know what this is going to do to your career.’”

Ben-Artzi feared he’d never work on Wall Street again. He now works for Israeli fintech firm BondIT.

Meanwhile:

A stellar final quarter has just about salvaged Jefferies’ year (Bloomberg)

Get an insight into working at Citi via Snapchat glasses (Business Insider)

Ray Dalio thinks Trump’s regime will empower rich people (Bloomberg)

French bank hires M&A bankers in the UK to capitalise on Brexit (Reuters)

UBS’s enormous trading floor in Connecticut is up for grabs (WSJ)

Chris Connor, who launched hedge fund Ardmore Global Investors has shut it down and is joining Citadel (Reuters)

Deutsche Bank trader earned himself and his family Rbs255m ($4.2m) through illicit trades (Financial Times)

“The tide has definitely turned. Since the election I’ve definitely sensed a bit of a change in attitude among folks who are saying, ‘Boy, we don’t know exactly what the future’s going to hold, but it’s unlikely to be more of the same.”’ (Bloomberg)

The glory days are back: private equity firm Apax just completed its biggest fundraising since 2007 (Financial Times)

How Steve Bannon got into the White House (Business Week)

A single 25-year-old managing a 60-year-old can cause misery across an organisation (WSJ)

Being ‘busy’ is now a sign of high status in the US. 100 years ago lots of leisure time was the preserve of the wealthy (Quartz)

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Contact: pclarke@efinancialcareers.com

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1. Closures and cut backs at global banks

2. A tipping point for Chinese banks

3. Juniorisation really took off

4. More moves from IB to wealth

5. The tech talent shortage became clearly visible

6. Getting a job became more laborious

7. Candidates became more cautious

8. Attitudes to contracting shifted

9. Compliance people burnt themselves out of banking

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Gain as much insight as possible from each practice question.

Don’t skip the book.

The test emphasizes understanding products with less focus on rote memorization.

Certain topics get all the attention, but it’s not always the path to a passing score.

There are multiple ways to a passing score on the examination.

The exam environment is highly regulated.

Keep abreast of rule changes.

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Become a sensitive banker

Get a “game changer”

Milk your tough times

Have a “tech bias” even if you’re not a techie

Career changes take a lot of networking

You will never know it all

Look beyond the glamour of a front-office role

Convert to a specialist tech role

Be honest as a new manager

Be more light-hearted

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1. The big guns took over private banking hiring

2. Compliance costs took their toll

3. Senior investment bankers struggled

4. Landing a job took longer

5. More job offers just fell apart

6. But change managers were suddenly more sought after

7. Digital banking came of age

8. Bankers become fintech employees

9. Contracting took off beyond tech

10. Offshoring didn’t end

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