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Despite the surging popularity of consulting jobs, there remains one big downside for anyone choosing consulting over the financial sector – the pay. Even consultants at a Big Three firm rarely reach the dizzy heights of banking, private equity or hedge fund compensation.

Elton Kent, an Indian employee of Accenture, one of the largest U.S. consulting firms, sued the company last year, claiming that he and hundreds of workers who participated in the Global Careers Program were discriminated against. The complaint alleged that he was paid less than American employees and received fewer benefits, lamenting that he didn’t get paid paternity leave, whereas as Caucasian men allegedly did.

Accenture settled the case for $500k without admitting or denying wrongdoing, then launched “Inclusion Starts With I,” an internal program meant to raise awareness of bias in the workplace. A video appears on the company’s website with people holding signs detailing their run-ins with discrimination, including a woman whose sign says there’s a strain when conversations aren’t in her first language and a black man who decries “being labeled entitled and lacking drive,” according to Bloomberg.

Last week, a Muslim Indian man sued Accenture again, bringing allegations similar to Kent’s. Mohammed Ali alleged that he was paid a lower salary and demoted, and that he didn’t receive an annual bonus, because of his race and religion, despite exceeding annual sales targets every year except for the fiscal year 2015. Ali claims he was paid less than his counterparts and was given a $50m sales target, while his presumably non-Muslim, non-Indian colleagues had targets of $30m.

His manager, who is white and who knew Ali is a practicing Muslim, justified the elevated target by telling Ali he “wasn’t going to be like Bernie Sanders and give handouts,” according to the complaint, and also told Ali he agreed “with all of Trump’s views.” The statements were allegedly made during the first half of 2016 when then-candidate Donald Trump was calling for a Muslim immigration ban.

Ali ended the fiscal year with $40.9 million in sales. The complaint alleged that the company “shorted” him on other deals, “so as to falsely deflate Mr. Ali’s sales production for the year.” Ali claims he was demoted shortly thereafter.

In a statement, Accenture said it’s committed “to inclusion and diversity” and “that no one should be discriminated against because of their differences” but that Ali’s claims “are without merit.”

In 2016, Asians made up 34%, or 16,262 people, of the more than 47,000 employees in the company’s U.S. workforce.

Separately, there’s good news and bad news for Deutsche Bank employees. Deutsche might have reported a drop of 25% in investment banking revenues, but it’s still paying. CEO John Cryan plans to keep his promise to return to the bank’s normal compensation programs – meaning it will pay higher bonuses in 2017 after a sharp cut last year in an effort to prevent defections, according to Reuters.

A return to bigger bonuses would be a relief for bankers at Deutsche Bank where total bonus payments dropped from 2.4 billion euros ($2.79bn) in 2015 to 546 million euros ($635.5m) last year after a multi-billion-dollar legal fine for the sale of toxic debt.

Meanwhile:

A London court ruled that Stuart Scott, the former head of currency trading for EMEA at HSBC, can be extradited to the U.S. to face fraud charges, three days after his old boss was convicted of the same allegations. (Bloomberg)

As Barclays CEO Jes Staley tries to run a profitable investment bank on the cheap, shares in the British bank slumped as the bank reported its trading division struggled in the third quarter. (WSJ)

Harvey Schwartz, the president and co-COO of Goldman Sachs sold 25k shares of the firm’s stock worth $6.125m in total. (Ledger Gazette)

There’s a big reason you should think twice before jumping from financial services to a tech startup. (Bloomberg)

What is worrying billionaire hedge fund manager Ray Dalio at the moment? The bond market. (Bloomberg)

With no publicly named successor to CEO Steve Schwarzman, who is likely to lead Blackstone next? (Bloomberg)

KKR’s third-quarter results aren’t anything to write home about, but it did ink two long-term strategic investor partnerships totaling $7bn. (Bloomberg)

First regulators blocked Deutsche Börse’s merger with the London Stock Exchange Group, and now its CEO is forced to step down amid an insider trading scandal. (New York Times)

Wall Street firms also dodged a bullet as the Securities and Exchange Commission issued a relief letting banks take direct payments for research without it being considered investment advice. (WSJ)

Nordea, the Nordic region’s biggest bank, is cutting at least 6,000 jobs. (FT)

Bias, not differences in behavior, seems to explain why women aren’t advancing professionally as quickly as similarly qualified men. (Harvard Business Review)

President Trump asked a TV host his opinion about who should be the next chair of the Federal Reserve. (Business Insider)

Gary Cohn, director of the National Economic Council and Trump’s top economic advisor, is planning a White House exit as soon as tax reform is done. (Business Insider)

Millennials’ willingness to discuss once-secret topics like annual salary and paths to promotion is leading some companies to make pay policies more transparent. (WSJ)

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UBS’s investment bank has just had a very good quarter. Increased revenues across its advisory business – particularly equity capital markets (ECM), which soared by 132% on Q3 2016 – meant that overall profits increased by 67% year on year before adjustments. Are things really that rosy? Here are the key figures to know.

1. UBS’s headcount cuts are broadly over

UBS’s investment banking headcount has now barely fluctuated over the course of the past year. This is a marked change since the bank drastically shrunk its investment banking balance sheet in 2012 and cut 5,200 jobs – primarily in its investment bank. Headcount increased by 81 people in the third quarter, when it brings in new graduate hires, but employee numbers are broadly flat over the course of the past 18 months.

2. Equity capital markets is the place to be

As the chart below shows, profits at UBS’s investment bank were up 67% in the third quarter, despite revenues remaining broadly flat across the business. The big winner within UBS’s investment bank is its equity capital markets business, which increased revenues by 132% on last year. UBS said that revenues were up in both IPOs and private listings. Meanwhile, its M&A and debt capital market bankers both managed to increase revenues by 9% year on year.

3. Costs remain stubbornly high

UBS said that it had cut personal expenses by 10%, which it says is down to lower salary costs, but on a pay per head basis compensation is broadly flat so far in 2017 at CHF476k (versus CHF475k for the first nine months of last year). Despite its ongoing focus cost-cutting, UBS’s cost-revenue ratio remains high relative to its peers. It was 80.5% in the third quarter – broadly flat on 2016. The only bank with a comparable cost-income ratio within its investment bank in Q3 was Deutsche Bank, where revenues plunged by 23% – more than any other investment bank.

4. UBS’s FICC revenues fared worse than any other bank in Q3

UBS’s fixed income business is a drag on the overall investment bank. Despite the surge in ECM revenues, a 37% decline in its fixed income business – which is now called foreign exchange, rates and credit (FRC) – wiped this benefit out. Overall, UBS’s trading revenues were down 15% year on year. The CHF294m it made in FRC were less than half the CHF784m its equities traders brought in.

In response to an analyst question on whether the gradual shrinkage of its FICC business was a deliberate tactic, UBS CEO Sergio Ermotti said that “we are not masochists”. In fact, UBS’s fixed income business is now highly reliant on FX revenues, he said, and volatility within this market in Q3 was “dead”.

5. The investment bank still has a big part to play

For the past few years, UBS has made it very clear that – first and foremost – it is a wealth manager. But this doesn’t mean that the investment bank is a complete irrelevance. Like Credit Suisse, UBS still needs its investment bank for synergies – both to offer investment banking services to demanding ultra-high-net-worth individuals and to help channel business to other parts of the bank. Ermotti said that the investment bank was an important “feeder” into the wealth management business. This is particularly the case in Asia, where billionaire clients are demanding more sophisticated investment banking products. It could provide an opportunity elsewhere in the future – Ermotti said that they see “a lot of potential” to create a similar type of business, feeding investment banking clients to the asset management and wealth management business, in the U.S.

6. UBS will be making Brexit moves early next year

In theory, UBS is still on the fence when it comes to relocating its employees out of London after the Brexit vote. Reports last week suggested that it was canvassing opinions from its investment bankers on whether they wanted to move to Amsterdam, Madrid or Frankfurt. Investment bank boss Andrea Orcel said that staff preference would determine their decision to move around 1,000 staff out of London as the UK exits the European Union. Some banks are hoping that UK prime minister Theresa May manages to secure a transition deal with the EU so that they can hold back on their contingency plans. UBS is not waiting around.

“The UK is still expected to leave the EU in March 2019, subject to a possible transition period. We intend to begin implementation of contingency measures in early 2018,” it said.

However, Ermotti played down Brexit moves in a call with journalists. He said that the 1,000 job moves estimate, made by chairman Axel Weber in January, were “more and more unlikely”. The bank has received more clarity from regulators around Brexit, and UBS’s worst-case scenario may no longer happen. No decisions had been taken, he insisted, while also pointing to the fact that it has the necessary banking licenses in Frankfurt.

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The former head of equities for the Americas at BNP Paribas, who left the bank in July after more then 25 years in the financial sector, has launched a company that offers home loans to people with poor credit records in the U.S.

Chris Innes, who spent more than seven years at BNP Paribas in New York, has launched HALO (Home Access Lease Opportunity), a new firm that allows people with a history of poor credit – such as bankruptcy or foreclosure – to rent, and eventually buy, a house.

The idea is that an individual chooses a house, HALO buys it on their behalf (asking for a Purchase Option of $3.5k on each $100k of home value in case the buyer doesn’t end up purchasing the property) and then leases it back to them for 6-18 months until their credit rating improves.

This is a marked change for Innes who has worked in equities sales and trading roles in both large investment banks and buy-side firms over the course of a 25 year investment banking career.

He joined BNP Paribas as head of equity sales for the Americas in August 2010, but was later promoted to head up the equities business in the region. Before that he founded his own hedge fund, Greenock Capital Management, and also set up an equity sales, advisory and structuring firm called CJI Capital Markets.

Before switching into hedge funds in 2007, he was global head of equity derivatives and prime brokerage at Bank of America.

Innes did not respond to requests for more information on the firm.

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There are two types of juniors in banking: those who see the big picture and those who just grind it out with their noses to the screen. Guess which makes managing director (MD)? Not the second.

When I was an MD at Goldman Sachs, I saw these two types of associate all the time. You had some who were sitting there, making slide decks and scrubbing models. And you had the others who were always questioning what was happening in their sector, what their clients needed and how they could help. They wanted the context. They wanted to know where they could fit.

When they saw the big picture, they knew the battlefield. And when they knew the battlefield, they could start devising their own strategy. If you want to be a good junior banker you have to be very strategic, by building up your internal and external networks, getting in front of the right people, making sure you are focusing your time on energy on the right projects.

The most strategic associates I saw had Scenario A through D planned out with multiple contingencies. They were able to think four or five steps ahead and see how the chain of events they were kicking off would ripple through the firm. For example, they could see that a certain high revenue project is coming. Rather than leaving it to chance that they would get staffed on it, they’d hustle to make sure they were. They’d talk to the deal staffer and outline why they might be a good fit. They’d mention insights into the deal in conversations with MDs. They’d find similar deals and bring that intel back to the boss. They had the networking ecosystems that allowed them to do all this.

The best juniors also admitted their mistakes early, took feed back and learnt. They failed early, failed often and kept growing. The worst bankers were the ones that could never admit that they were imperfect. When I was at Lehman, I had an associate just like that. Full of ego, always talking about how great he was, always making mistakes cause he wasn’t willing to learn. He was smart, could see the big picture, and even be strategic, but he just couldn’t admit mistakes and learn from them. He went from working at Lehman as a VP, to being an associate at Jefferies. Backwards and downwards.

Now, strangely enough, these two qualities (big picture thinking and admitting mistakes) are also what make great entrepreneurs. This is why when young bankers tell me they want to quit banking to become an entrepreneur, I tell them it’s not necessary. You can think and act like an entrepreneur in finance. The best juniors do exactly that. And this is why they get promoted up the hierarchy while the rest slowly disappear. A great junior banker is actually the perfect entrepreneur. It’s all about the same skills and mind set.

The author is a former Goldman Sachs managing director and blogger at the site What I Learnt on Wall Street.

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Two senior traders, Tish Ghosh and Andrew Pidgeon, have just left Credit Suisse in Hong Kong to join hedge funds.

Ghosh, a Credit Suisse MD and head of equities delta one and systematic trading for Asia Pacific, moved to Millennium Capital Management earlier this month as a Hong Kong-based portfolio manager, according to his public profile.

He had been with Credit Suisse since June 2014 and previously spent three years as Asia Pacific head of equities systematic trading at Merrill Lynch. He was a Barclays VP before that, working in the firm’s Hong Kong index arbitrage and systematic trading team from 2007 to 2011.

Pidgeon, a director in delta one and derivatives trading at the Swiss bank, has left after seven years to join leading local head fund Segantii Capital Management. Pidgeon started his career in the Australian Army and got his first finance job, as an equity derivatives trader at Macquarie in Hong Kong, in 2007.

He is not the only ex-Credit Suisse employee at Segantii. The fund’s CEO, Kurt Ersoy, was at Credit Suisse for almost 17 years, latterly as an MD focused on Asia Pacific equities, derivatives and structured products.

Segantii, which won best Asian multi-strategy fund at the 2017 Eurekahedge Awards, has made several other high-profile hires since last year. In 2016, it recruited Pascal Guttieres, UBS’s former Asian head of block trading, and also took on Joseph Chang and Stephanie Chen from Davidson Kempner Capital Management and Eton Park Capital Management respectively.

Hong Kong traders have been particularly keen to move to the buy-side over the past 18 months, as several banks, including Barclays and Standard Chartered, have made redundancies.

Credit Suisse has cut about 35 roles – including trading, sales, prime brokerage and research positions – from its Asian equities business this year in response to falling revenues. Donald Lee, the co-head of cash equities for Asia Pacific, and Matt Pecot, who ran prime services in the region, both left earlier this year.

“Generally, across the market in Hong Kong, there’s a race to the bottom in terms of ‘deseniorising’ the trading workforce. Banks want younger, lower-level, cheaper people,” says Hong Kong trader-turned-headhunter Matthew Hoyle. “Terrible bonuses, which are subsequently deferred over many years, are also pushing traders away from banks.”

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Whether you were a good leaver or a bad leaver, whether you got fired or laid off or left for a better job or are in fact still employed, it never pays to talk smack about a current or former boss or employer in a job interview. It simply never makes you look good as a candidate.

You should always be positive, or at least present a difficult situation through rose-colored glasses, anytime previous positions and former bosses come up during an interview. Otherwise, interviewers will always think you were the problem – even if that isn’t the case, according to Connie Thanasoulis-Cerrachio, career coach and co-founder of SixFigureStart.

1. Rather than focusing on conflicts, quantify your accomplishments

Dwelling on conflicts with former bosses in a job interview is never a good look for the candidate.

“If an interviewer asks about previous positions, mention the accomplishments you produced for your previous employer and quantify them if possible,” Thanasoulis-Cerrachio said.

2. Talk about the fit or lack thereof rather than attacking

Don’t ever bash your former employer or the company. It is OK to say that your last job was not a fit, but leave it that, according to Hallie Crawford, the founder of HallieCrawford.com Career Coaching.

“If your interviewer probes further and really presses you, have a good way to explain the issue without making it sound like you are a problem employee,” she said.

For example, if your boss is the reason you’re leaving, you could explain that the management style was not ideal for you.

“Whatever the reason is for your leaving, even if it wasn’t voluntary on your part, keep the tone as positive as possible, focusing on the future and what’s next for you, including what’s next for you at this new job,” Crawford said.

3. Force optimism

This is one of the most basic pieces of advice career advisers give – you must always speak positively about old positions and old bosses. That’s why it’s so surprising that so many people do not abide by it.

Even jobs that ended badly will have some positives, and the important things are to talk about what you’ve learned from the experience, according to Janet Raiffa, an investment banking career coach, the former head of campus recruiting at Goldman Sachs and a former associate director in the Career Management Center at Columbia Business School.

“You can definitely talk about a job not being stimulating enough, or not allowing enough growth, but that should be coupled with how the job at hand can offer something better,” she said.

4. Spin a bad management style into a positive

If an interviewer asks about the style of your previous boss, always talk about it in a positive light.

“If your manager was a micromanager, say the truth but in a good way,” Thanasoulis-Cerrachio said.

For example: “We had a very tight working relationship. He/she liked to be kept up to date on even the minutest details and that was fine with me. After the first few months, he/she knew I was doing a great job so the confidence was high, but we continued to check in because no time was wasted when I knew I was going in the right direction.”

If your manager was a non-communicator, say the truth but in a good way, she suggests: “We agreed upon our goals up front and then because she had faith in me, I got the job done meeting minimally. That was great because we wasted zero times in meetings and everything was really efficient.”

5. Tell colorful anecdotes

To keep the response from turning negative, prepare stories about challenges you have faced and overcome, problems you’ve solved and clients you have made happy in your previous job. Some Wall Street jobs are best-suited to extroverts, and in general, recruiters and hiring managers like candidates who can spin a good (yet relatively concise) yarn.

“This will help to highlight your character and show your prospective employer why you are a good fit for the job,” Crawford said.

6. Realize that trash talk will backfire

It’s also imperative not to speak badly of a previous boss or colleague, even if the interviewer seems sympathetic or baits you with leading questions.

“While they very well may be have been terrible, you don’t want to suggest that you are a malcontent who has trouble getting along with people,” Raiffa said. “Complaining is also not a positive thing to do in an interview, and shows lack of judgment.”
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Credit Suisse is making some big hires for its flagging equity derivatives business. Following in from the hire of Michael Ebert from Bank of America Merrill Lynch to lead the division in August, it has just raided the bank again for a senior sales role.

Mike Heraty, the head of institutional equity derivatives sales and structuring for North America at BAML in New York, has just been hired in a senior role at Credit Suisse. Heraty, who was also previously head of cross-asset pension, endowment and foundation sales in the Americas at BAML – where he worked for over 11 years – joined Credit Suisse in October.

Heraty follows Michael Ebert from BAML, who was named global head of equity derivatives at Credit Suisse in August, replacing Anthony Pesco, who retired in March. Mike Stewart, Credit Suisse’s global head of equities, said in a memo at the time that Ebert’s appointment showed “equities is not only a critical part of the global markets strategy, but a critical part of the overall Credit Suisse strategy.”

Credit Suisse is due to report its third quarter results tomorrow, but said in Q2 that a 20% decline in equities revenues during the three months to June 2017 was down “lower revenues in equity derivatives, reflecting lower client activity”. Credit Suisse ranked outside the top seven investment banks for equity derivatives revenues in the first half, according to research firm Coalition.

Over the past 12 months, there have been various changes to Credit Suisse’s equity derivatives team. In February, it brought in Benoit Rauly, the former head of complex equity and hybrid trading at UBS.

In December last year, following Mike Stewart’s arrival, Credit Suisse cut some senior names within its equity derivatives business. Walter Rotondo, a long-serving Credit Suisse banker who joined in 2006 and was most recently head of European equity derivatives convertibles trading, left along with Andrea Negri, a managing director, co-head of equity sales and head of equity derivatives sales in Europe.

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The underperformance of asset managers’ actively managed strategies taken with the rise of new technologies has shaped asset management recruitment this year and will continue to do so, moving data scientists and artificial intelligence and machine learning specialists to the top of the priority list for long-only asset management and fundamental hedge fund firms, not just quantitative hedge funds.

In March, BlackRock fired more than 30 people in its active equities group, including five fundamental portfolio managers, and moved $6bn of the $201bn run by traditional stock pickers into low-cost funds with a quantitative element, according to Bloomberg. This year, its recruitment focus has reportedly been on quant researchers and candidates conversant with data analytics and with specific technological skills, including Rajesh Nagella, who last month joined BlackRock in New York as a managing director after leaving Citigroup, where he was the head of algorithm products for the U.S. and head of its Americas execution platform.

What skills are asset managers looking for now? The answer, quite simply, is data science, but this doesn’t mean investment staff are being cut across the board.

“We’re seeing a really big push for data scientists and quant researchers, and not just across the quant [hedge fund] side – they’re being added to the fundamental research teams as well,” says Reshma Ketkar, the head of the asset management recruiting practice at Glocap Search. “I’m working with a big fundamental investor that has traditionally analyzed management teams and looked through financial documents to look at traditional metrics such as cash flow and balance sheets. They are now hiring a data scientist to cull through big data for insights to supplement the fundamental investment process.”

The recruiting focus on the buy side has changed with these new technologies and functions, according to Steven Gold, a partner at recruiting firm Green Key Resources.

“We are starting to see an increase in machine learning and AI and big data analytics roles, data scientists and data analysts,” he says. “We have not seen requests for blockchain; however, that is the next thing on the horizon.”

Nearly all buy-side firms of scale are hiring in data analytics to enhance investing, marketing and operations, according to Chad Astmann, the co-head and global sector leader and asset management and alternative investments at recruiting firm Korn Ferry. Not as many have stepped into machine learning or blockchain unless it is core to their investment strategy.

“Hiring in data science and analytics has greatly increased and the profile of hiring outside of financial services has been expanded into healthcare, consumer and technology, among other industries,” he says.

Pulling talent from Silicon Valley

However, fundamental managers aren’t always competing with quant hedge funds for talent; sometimes it comes from tech firms or data providers.

“Data science is a newer role, so we’re pulling from an industry that has these roles: tech, for example, alternative data providers, not always quant funds, so we’re not pulling like from like – we’re pulling from something that is a little bit different, but requires a similar skill set,” Ketkar says. “Data scientists are providing a supplemental investment function – it’s not the same thing as an algorithmic quant trader.”

Depending on how the role is structured, sometimes a data scientist is on the investment team, but sometimes it is an operational or IT hire.

“Data scientists are not making trades – their role is to analyze big data to supplement the work of investment teams, which retain discretion over portfolio construction,” Ketkar says. “They’re tasked with providing new information that the PM doesn’t have.

“It depends on how people want to apply their skill set – what are the motivations of the candidate?” she says. “If they want to provide algorithmic trading recommendations, then they’re likely not the right person for the data-science role – they’d be better as a quant researcher.”
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I started working in banking technology 20 years ago this year. My career started around the time the internet got going, when Python was still just a snake and Cobol and Unix were commonplace. I’ve designed and implemented systems from scratch and I’ve worked across fixed income and equities. My career spans four major international banks and I have proven achievements at each. But no one will give me a permanent job.

I’m fairly sure it’s my age. Until I hit 51, I worked full time in a permanent role at senior vice president level. Since then, nothing. I’ve applied and I’ve applied, but it’s been impossible to find a permanent role at a comparable level. Permanent jobs for senior banking technologists don’t seem to exist any more.

It’s a different matter in the contract market. I can get contract work no problem at all. But I don’t want to be a contractor: I want to be invested in the business I’m working for; I want to make an impact strategically and I can’t do that when I’m not on the payroll. Contractors are also being squeezed as banks try saving money. Rates are being compressed and contractors are increasingly asked to take involuntary holidays – in my case, my contract is up at the end of November and I’m being asked to take the entirety of December off and to start again in January. The rest will be welcome. The lack of pay will not.

Of course, this is why banks are hiring me as a contractor. Because I’m not a permanent employee they don’t need to give me holiday pay. Nor do they need to give me sick pay, nor pension benefits. They benefit from my experience, with none of the cost commitment that comes from actually giving me a job. The advantages, as far as I’m concerned are all on their side.

Even so, I can’t help but feel banks are losing out. I have a huge amount to offer in terms of both passion and knowledge. Banks are overlooking my past experience and are focusing instead on young people who claim to be experts in “data” but who have no understanding of its broader context. Without people like me, these data teams have no strategic guidance. The same applies to so-called “tech firms,” which are even more locked into the cult of youth.

I’m 51. My career in technology should not be over. Unfortunately, banks’ recruiters don’t agree. There’s a lot of talk about sexism in technology, but from my perspective ageism is the bigger problem. When you have a technology team full of permanent employees aged under 28, you’re doing something badly wrong.

David Smith is the pseudonym of a senior banking technologist in London

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It’s day one of the new “salary history rule” on Wall Street. As of today, employers in New York City, can’t ask potential recruits how much they were paid in previous roles. The change is set to cause problems for anyone recruiting for banks, but chaos for anyone recruiting for hedge funds.

At issue is the unpredictability of hedge fund pay. While banks’ pay for front office “producers” typically falls within a range according to an individual’s level in the banking hierarchy and can therefore be estimated, hedge funds’ compensation for salespeople and traders varies widely and is often a percentage of the revenues an individual generates. Under the new rules, recruiters are prohibited from making any form of upfront inquiry that can be used to elicit compensation levels. – They can’t ask about pay. And most importantly, when a hedge fund is known to pay percentage deals, they can’t ask about revenues either.

In an industry, where revenues are the measure of performance, this is a disaster.

“You can’t back into someone’s compensation under these rules,” says one New York trading headhunter, speaking off the record. “This means that I can’t actually ask traders about the revenues they brought in last year, and that if I elicit this accidentally I can’t use that information without risking a fine. The whole thing is a nightmare.”

Law firm David Polk confirms the conundrum. In a note out today, it points out that the rule prevents recruiters from making any inquiries that might directly lead them to an individual’s salary. Infringements are punishable with fines of between $125k and $250k.

As we noted previously, the new rule makes it possible that recruiters will simply make incrementally low salary offers until they hit a level potential hires will accept. However, one recruiter says it could have the opposite effect: “If a bank or hedge fund mentions that it’s willing to pay between $450k and $700k and the individual doesn’t volunteer his or her previous pay level, the recruiter has an incentive simply to offer the candidate the higher level so as to bring in a bigger fee.”

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Bank of China is hiring experienced staff across the board in Hong Kong right now (click here for details of where the jobs are). But where should you study if you want a graduate role at the bank?

To find out, we looked at online profiles of current BoC employees to see how many of them attended leading universities in Hong Kong, China and globally. We then ranked the 15 most popular of these universities among the firm’s Hong Kong-based workforce (and gave each one a percentage based on the total for all 15 institutions).

The results, displayed in the table below, show that University of Hong Kong graduates make up the largest alumni group at BoC in Hong Kong (19% of those who attended one of the top-15 colleges went to HKU, according to online profiles).

The university’s Bachelor of Economics and Finance degree, a four-year double-major programme, has traditionally supplied graduates to large banks. And its newer Bachelor of Science in Quantitative Finance, a more in-depth course, is proving increasingly popular.

Four other local schools make up the top-five most popular universities, while 80% of Hong Kong staff at BoC studied in the city. This local percentage is even higher than for Hong Kong-headquartered rival Bank of East Asia (70%).

It also stands in dramatic contrast to the staff composition of global banks in Hong Kong. As we previously reported, only 20% of their workforces studied locally on average. Even at HSBC and Standard Chartered – two of the most Asia-focused foreign banks – the proportions are 28% and 25% respectively.

Mainland Chinese universities supply a surprisingly low proportion (10%) of BoC’s staff, suggesting that the bank’s workforce is dominated by local Hongkongers rather than transferees from the mainland.

Our table also indicates that investing in an expensive foreign degree may not be worth it, if you want to work for Bank of China. Only three Western universities feature in the top-15, although The University of New South Wales ranks in 6th position.

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AXA is expanding its digital team by about 30% in Singapore and is open to candidates from outside the insurance sector.

Tomasz Kurczyk, head of digital for AXA in Singapore, explains who he wants to hire and why the insurance sector is now becoming more appealing for technologists.

What’s your team working on?

“The team looks after digital commerce and partnerships, digital operations, digital services and customer engagement, CRM, and digital analytics. This year we’ve developed applied AI and machine learning to improve business processes, chatbots, and smart contracts on blockchain. In the next 12 months, our focus will be on scaling up initiatives like digitalised life and health insurance products, omni-channel customer service, and launching a proprietary digital platform.”

What jobs are you hiring for?

“We have 34 people in our team and plan to recruit 10 more, all based in Singapore. We’re hiring full-stack developers with knowledge of JavaScript technologies to help grow our proprietary platforms and support an increasing number of partnerships. We’re also looking for people in marketing automation, digital marketing and CRM. You don’t need previous insurance experience – we only have three people in the digital team who’ve worked in the sector before. But you must be proactive by suggesting new ideas and taking the initiative to fix things when there’s a problem.”

Who are your main competitors for tech talent?

“All employers in Singapore are now tapping into the same pool of expertise. The days when our main competitors for digital talent were other insurance companies are over. Now we need to compete with the likes of technology companies, start-ups and other industries such as online retailers, car sharing companies, and even government agencies.”

Why would a candidate choose an insurance firm over likes of Google?

“We’re now at the point where the hottest technologies and trends – AI, machine learning, blockchain, the internet of things, event-driven architecture – are maturing and insurance is one of the sectors where all of them need to be adopted quickly. The industry is transforming itself by really embracing technological excellence as a driver in creating value for customers.”

Is it challenging to hire technologists in Singapore?

“It’s not easy to find the right talent in Singapore, because of the intense demand. That’s why we’re collaborating closely with industry associations and education institutions to create training programmes that impart skills to prospective employees, and give them opportunities to work with industry leaders via internships and job placements. The Singapore government is also doing a good job in reskilling people who want to change their career and start working in the tech and digital space.”

Singapore wants to be an insurtech hub. Is it moving in the right direction?

“MAS, industry bodies and insurers are working together to make sure the insurance ecosystem is open to deploying new technologies by both established companies and start-ups. We’re seeing several new insurtech firms being created and existing ones expanding rapidly into other regional markets – so we’re moving in the right direction.”

You were previously at Deloitte consulting, and AXA is the first finance firm you’ve worked for. Why did you join?

“Before moving to Singapore in 2015, I was headhunted to join AXA’s Paris HQ. The main allure was the fact I could take responsibility for global initiatives and see their final impact on the business and customers. I missed this sense of fulfilment during my years of consulting work. Contrary to popular belief, insurance is not one of the most boring industries – and it serves a crucial role in society and the economy.”

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““

Isabelle Ealet probably wishes she never said it now. When asked by French magazine L’Expansion why she liked working for Goldman Sachs several years ago, Ealet said something about Goldman being a meritocracy. “What I appreciate most is the culture of results,” she told her interviewer. “At Goldman Sachs, you are judged on your performance.”

This may be so. But the commodities division, which Ealet ran until 2012 and which now falls under her purview as global co-head of securities, has been blighted by terrible performance for many quarters now, and yet Ealet herself has seemingly been spared the kind of harsh judgment you might expect from a firm which has made a habit of clearing out its under-performers.

Others don’t appear to have been so lucky. In September it was revealed that Greg Agran, the former global co-head of commodities at Goldman will be retiring next month. Various traders have left, voluntarily or not, but Ealet’s crown seems to remain untouched.

This might be because she’s been several steps removed from the commodity unit’s travails (which were allegedly down to a bad energy bet and then problems with “inventory”). It might also be because when she did run the commodity business directly between 2007 and 2012, it regularly earned revenues in excess of $3bn, and if anyone can turn things around it’s thought to be her. In this sense, Ealet is a lesson in Goldman survival.

Either way, following Ealet’s review of the commodity unit’s entire existence earlier this year, Goldman now seems to be doubling down. During his presentation in September, Goldman COO Harvey Schwartz cited commodities hedging as an opportunity for revenue growth. Accordingly, Bloomberg now suggests that Goldman has embarked upon a commodities hiring spree. It’s recruited a partner-level trader from Morgan Stanley to lead its American natural gas and power trading unit, plus a handful of other senior level traders from elsewhere.

For the moment, therefore, Ealet is being given free rein despite the poor performance of a key business in her stable. Business Insider says she’s “working closely” with Goldman’s new commodities co-heads, appointed in September. Ealet needs to hope things start improving. Otherwise that comment to L’Expansion might come back to bite.

Separately, you need to learn about quantum computing. The Financial Times says hedge funds like Renaissance Technologies, DE Shaw and Two Sigma are all looking into the use of computers which use “qubits” instead of ones and zeroes and that a new breed of “quantum quant” may be coming along next.

Meanwhile:

Deutsche Bank is looking for a Frankfurt office to house up to 1,600 people. (Bloomberg)

Deutsche Bank found the addresses of German customers stored in London don’t always say which German state the customer is in – a detail required in the German IT system. (Handelsblatt)

The Bank of England say the City of London could lose 10,000 jobs on the very first day after Brexit. (Guardian)

Softbank, the world’s largest tech fund, based in London, is hiring operational professionals. They include UBS veteran Neil Hadley, who joined as chief of staff, Catherine Lenson (also from UBS) as head of HR, and three directors from PwC. (Financial News)

Moelis & Co just hired Marco Acaia, a former banker from J.P. Morgan and Morgan Stanley. (Financial News)

Troels Oerting, Barclays’ chief information security officer, has taken a leave of absence after CEO Jes Staley was tricked by an email prankster. (Financial News)

U.S. banks are about to find it much harder to recruit Indians into tech roles. (Bloomberg)

Universities losing their best AI scientists to tech firms not banks. (Guardian)

Unattractive people are more likely to be chosen for undesirable jobs. (Quartz)

Ex-Merrill Lynch banker brings book about acorns to school children. (Richmond and Twickenham Times)

It is mathematically impossible to live forever. (Inverse)

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““

Citadel has continued its London hiring spree by bringing in a former partner at SAC Capital Advisors in the UK who has been running his own hedge fund for the past four years.

Sam Elsokari, a senior portfolio manager who decided to go it alone after Steven Cohen closed SAC’s London office following the insider trading scandal in 2013, has joined Citadel’s London hedge fund as a portfolio manager.

Elsokari, a former financials-focused equity long-short portfolio manager at SAC in London, joined Citadel as a portfolio manager in late September. Before this, he was running HSE Capital Management, a hedge fund he set up in February 2014.

Since launching his own firm, Elsokari has nurtured an impressive beard, and feels so strongly about his facial hair that he wrote a blog for The Beard Mag last year, where he said it’s “time to reclaim the beard”.

“My beard has evoked strong reactions from those I know and don’t know,” he wrote. “People are afraid of it, my wife initially hated it but now loves it. My sister still hates it saying it fits the mould. I’ve been called names in Heathrow airport, I’ve been stopped and questioned suspiciously by immigration officers in the US and in Egypt – where in both countries it’s seen as a symbol of extremism.”

He started as a European bank strategist at Lehman Brothers in 2001, before moving to UBS O’Connor in September 2005 as a portfolio manager on a long short equities financials portfolio. He joined SAC in January 2009.

Cohen shuttered SAC Capital Advisor’s London office in late-2013, following an insider trading claim that led to the firm paying $1.8bn in civil and criminal penalties. Cohen wasn’t charged with insider trading, but changed SAC’s name to Point72 Asset Management in 2014, and transformed into a family office, managing his estimated personal fortune of $11.2bn.

While many London-based former SAC employees have returned to Point72 since it launched a new UK office in January last year, some partners started their own ventures. As well as Elsokari, Tony Eccles, a partner focused on energy investment at SAC, started Ayora Capital Management in early 2014.

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““

Firstly, some praise where praise is due. When Credit Suisse used last year’s investor day to explain its intention of simultaneously cutting costs and increasing revenues in its global markets division, we were skeptical. Everyone knows the story about the gold at the end of the rainbow, but that doesn’t mean you have to go looking for it. In Credit Suisse’s case, something shiny has transpired: the Swiss bank said today that it’s on track to meet its target of cutting costs to CHF4.8bn in its global markets business next year, whilst simultaneously hiking revenues to CHF6bn. Bravo! Except…

For all its revenue rebound and cost culling, Credit Suisse’s global markets business still seems to have a headcount problem.

In the year to October 2017, global markets increased staff by 80 people to 11,670. This year follows a “major restructuring” last year and a big loss on illiquid trades, which decimated profits in the global markets unit in 2016.

In theory, things should now be bouncing back to new and headier heights. In productivity and profit per head terms, they’re not.

As the charts below show, profits per head at Credit Suisse’s global markets business are better than 2016 but remain significantly below 2015 for the first nine months of this year, and revenues per head aren’t doing that well either. The restructuring of Credit Suisse’s global markets division might be going to plan in terms of revenues and cost cutting, but it’s been pretty disastrous for the effectiveness of individual employees. The average global markets employee was a bit more productive and a lot more profitable in 2015 before the restructuring began.

The same applies to Credit Suisse’s Asia Pacific businesses as a whole. While the Asian wealth management business intended to bring in assets and disseminate revenues across the bank, Thiam added 750 people in the region between October 2015 and October 2016. In the year to October 2017, Asian headcount was then trimmed back by 90 people, but as the charts below show, profits per head in APAC have fallen and are now substantially lower than before Thiam’s hiring drive began in 2015. Revenues per head in APAC have yet to recover too.

By comparison, Credit Suisse’s investment bankers look a lot more impressive. Credit Suisse added 350 people to its banking and capital markets division in 2017, a massive increase of 12%. Nonetheless, profits per head surged and revenues per head remained stable.

If you’re looking for a job at Credit Suisse now, therefore, investment banking and capital markets looks like the division to go for. The only downside is that pay per head is being squeezed here along with elsewhere.

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““

Goldman Sachs is undergoing a retail banking revolution, so much so that CEO Lloyd Blankfein is getting in touch with consumer banking customers personally. Like any retail bank, technology is key to Goldman’s success in this area, but the bank has just lost the man in charge of tech for its U.S. retail bank.

Howard Sloan, a managing director and chief information officer of Goldman Sachs Bank USA since 2016, when the firm acquired GE Capital Bank, has gone to Bank of America Merrill Lynch. He led the integration of acquired and acquirer and the launch of Goldman’s online retail deposit platform, GS Bank, and was responsible for the technology infrastructure for deposits, lending and other asset-related lines of business, including Marcus, which offers fixed-rate personal loans.

Sloan is now an MD of wealth management back-office technology, a leader in the group that provides brokerage technology platforms and services for the Merrill Lynch Wealth Management, U.S. Trust and global markets businesses.

After co-founding a risk management fintech startup, Sloan joined Goldman in 1999 and worked his way up to MD and the global head of prime brokerage and hedge fund administration services technology, a group that provided trade processing, risk analytics, performance measurement and custodial reporting.

In 2012, Sloan moved from New York to Hong Kong to become the Goldman’s head of investment management and banking technology for Asia, a position he held for two years before moving back to Wall Street as the global head of private wealth management client and sales technology. He spearheaded the design of the bank’s www.goldman.com private wealth management site.

Goldman has been forced to adapt as banking has changed, shedding its glamorous Wall Street image as it becomes more like rival J.P. Morgan Chase, accepting the fact that U.S. retail banking has become not only more reliable profitable than investment banking. Sloan’s career trajectory at Goldman is emblematic of that evolution.
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““

£If anyone has a giant mortgage in London now, it’s the person six years or more into a career in banking. While other professions were forced to rent, vice president (VP) level bankers could still afford to buy into London’s crazily expensive housing market at the top. Many are now highly indebted as a result. Do they mind, then, that the Bank of England’s Monetary Policy Committee has voted to raise rates for the first time in over a decade? Not really.

“My mortgage is £400k, but I’m not really bothered about the rate rise,” says one VP in Deutsche Bank’s markets business, “- 25 bps doesn’t change anything. It’s only £80 a month once it kicks in and I’m on a fixed rate for two years anyway. “A credit trader at J.P. Morgan says he has a £400k mortgage and is also, “not bothered”. A VP-level technologist at J.P. Morgan is similarly sanguine. “My mortgage is £450k,” he tells us. “I’m not that apprehensive about rising rates – I don’t think they’ll go up much more given the state of the economy and the dangers of Brexit, although I’ll probably struggle if they go up more than 2%.”

The potential curse of massive mortgages and minimal housing equity mostly afflicts bankers in their late 20s and early 30s. Below this, most young bankers rent. Above this, most people in banking bought houses long enough ago to have amassed an equity cushion thanks to price rises, although some have mortgages on more than one property. “Loads of older technologists are landlords,” says the J.P. Morgan VP. “People start with a one or two bed flat in zone two or three. Then they move to a house further out. Then they buy some rental properties too.”

In theory, finance professionals should be well placed to manage themselves in the housing market. In reality, this isn’t always so. The unpredictability of bonuses means there was a historic tendency for people in finance to take out interest only mortgages. Pre-2008 many bankers levered-up as much as possible. Mortgage lenders remain hesitant to lend on the basis of total compensation (rather than salary alone), with the result that employees say J.P. Morgan runs monthly “mortgage surgeries” to help its junior employees find lenders sympathetic to their needs.

The more sensible 20-something bankers were prepared for today’s hike in rates. “I have a mortgage, but I’ve been quite prudent and over-equitized over the last couple of years,” says a VP in Deutsche’s investment banking division. “My loan to value is now below 60% and I have a fixed rate for another two years,” he adds, saying that most of his colleagues in finance have mortgages in excess of £400k and will, “clearly pay a bit more if they need to refinance today”.

While some bankers could suffer from rising rates, however, plenty won’t. A surprising number of the VP-level bankers we spoke to are renting. Although their rents may yet rise as landlords refinance, they also remain on the sidelines ready to buy if house prices fall. “It’s the middle and upper middle class people here who bought houses,” says one J.P. Morgan employee. “Most of them relied upon the bank of mum and dad for their deposits. Other people couldn’t afford it.”

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““

UOB has made its second senior structured finance hire from DBS in just the last four months.

Alvin Wong has joined as a director in structured finance within UOB’s Singapore-based global financial institutions group (GFIG).

The structured finance GFIG team is headed up by Wong’s former DBS colleague Simon Tan, who moved to UOB in July, having been second in charge of DBS’s structured debt solutions (SDS) unit for several years

Wong also worked in SDS at DBS, where he was a “senior member and key revenue generator for the team” from 2011 to 2017 and a “lead transactor of structured finance and securitisation transactions”, according to his online profile. His responsibilities included business strategy, portfolio management and product management.

Prior to that role, Wong worked as a VP in structured products and derivatives sales at DBS for three and a half years. He covered institutional clients in Singapore, Indonesia, Thailand and the Middle East between 2007 and 2009, and was then promoted to led the Indonesia structured product business.

The engineering graduated began his career with a three-year stint at DSO National Laboratories, Singapore’s largest defence research organisation, before moving into banking as a management associate at Standard Chartered.

Wong and Tan are not the only Asian structured finance specialists to have moved jobs in recent months. In April, as we reported at the time, Standard Chartered hired Soon Huat Tng from ANZ as a senior transactor covering ASEAN markets.

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““

Credit Suisse’s private bankers are managing more money in Asia, even as the firm’s headcount of relationship managers dips.

The number of RMs employed by Credit Suisse in Asia Pacific fell 9% – from 650 to 590 – year on year in the third quarter, according to its Q3 financial results. The bank’s 2015 soft target of having roughly 800 RMs in Asia by 2018 is no longer part of its strategy for the region.

Meanwhile, assets under management within APAC private banking (a unit of the firm’s regional ‘wealth management and connected’ business) went from CHF168bn to a record CHF190bn, a rise of 13.1%, over the same period. This was “driven by higher levels of divisional collaboration and broader activities with clients, with particularly robust levels of asset referrals from ultra-high-net worth entrepreneurs”.

The focus on UHNW clients, who are smaller in number than their less affluent high-net-worth counterparts, gave Credit Suisse scope to slightly reduce the number of RMs it needs, says Rahul Sen, a former Merrill Lynch private banker, now head of wealth management at search firm The Omerta Group.

Credit Suisse continues to “strategically” hire “quality” senior bankers as it aims to become the “entrepreneurs’ bank” in Asia, says a Singapore-based spokesperson.

If you are a current RM at Credit Suisse, you are probably managing more assets than you were a year ago. Average AUM per banker is now CHF322m, compared with CHF258.4m in Q3 2016 – an increase of about 25%.

This will likely see Credit Suisse place higher when 2017 RM productivity rankings (AUM divided by headcount) are published early next year. The Swiss firm took the 11th slot for 2016, behind its main rival UBS.

The per-head AUM increase bodes well for bonuses, too. Although Credit Suisse (like UBS) tends to pay lower bonus percentages than boutique firms do, healthy revenues help to compensate for the lower ratio.

Net new assets under management, a key performance indicator in private banking, are also heading in the right direction. They grew by 13% on an annualised basis in Q3, up from 10.9% a year previously.

These figures also suggest that some of the RMs recruited during Credit Suisse’s hiring spree last year – it took on 100 RMs in the year to end-June 2016 – are starting to bring in more assets and become more productive.

Total net revenues in APAC ‘wealth management and connected’ stood at CHF548m in Q3, up 14% year on year (and within that private banking revenues rose 16% to CHF400m).

By contrast, ‘markets’ – the other business within Credit Suisse’s Asia Pacific division – fared less well, with revenues dropping 22% to CHF342m. This was mainly due to lower fixed-income and equity sales and trading revenues, helping to explain why Credit Suisse has cut jobs from its Asian equities team this year.

For our global analysis of Credit Suisse’s investment banking results, click here.

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““

Billionaire Robert Mercer, a huge financial backer of many conservative causes and a patron of the former White House adviser Steve Bannon and Breitbart News, sent a letter to investors and pension advisers revealing that he is stepping down from the board and his role as co-CEO after 25 years at $50bn quantitative hedge fund giant Renaissance Technologies, a.k.a. RenTech.

Mercer, whose involvement in conservative politics became a lightning rod for criticism during and after the presidential election, will remain active on the research side of the fund, which makes trades using complex trading algorithms, according to the New York Times.

In addition to donating to right-wing political campaigns, Mercer was a large financial backer of Cambridge Analytica, a voter-data firm that helped to propel Donald Trump to victory.

His valedictory letter reads a bit like an Ayn Rand encomium: “I believe that individuals are happiest and most fulfilled when they form their own opinions, assume responsibility for their own actions, and spend the fruits of their own labor as they see fit. I believe that a collection of individuals making their own decisions within the confines of a clear and concise set of laws that they have determined for themselves will advance society much more effectively than will a collection of experts who are confident in their knowledge of what is best for everyone else. This is why I support conservatives, who favor a smaller, less powerful government.”

Mercer tried to distance himself from polarizing figures, including white supremacist Milo Yiannopoulos and Bannon, who he supported financially, putting him in the cross-hairs of a group that has been pressuring university endowments and pension funds to pull their money from RenTech, according to Bloomberg. Mercer said that he was selling his stake in Breitbart to his daughters “for personal reasons.”

Ben Shapiro, the former editor-at-large at Breitbart who broke with the site in 2016, told Vanity Fair, “The only person who’s really damaged here is Yiannopoulos…. It’s just a P.R. maneuver to [take] pressure off his hedge-fund investors.”

A former I.B.M. coder, Mercer is at odds politically with RenTech founder Jim Simons, a prominent supporter of Democratic causes and candidates, including Hillary Clinton’s presidential campaign, whose net worth is approximately $18.5bn.

Separately, while all the focus has been on Goldman Sachs’ M&A advisory business, which has been going gangbusters, and its bond trading business, which has not been going well, the bank has plans to continue growing a less-heralded business that it believes could. That business is debt capital markets (DCM).

Business Insider.points out that Goldman has quietly doubled its DCM revenue since 2010. Goldman Sachs’ debt-underwriting business has produced revenue of $2.03bn, the highest for the first three quarters of the year. The bank ranks second for financial sponsor-related loans in the U.S. for the first nine months, according to Dealogic, up from eighth. Goldman ranks fourth in U.S.-marketed DCM volumes for the first nine months, up from sixth. Not bad for a bank that was a mere bit player in primary debt issuance before the financial crisis.

Meanwhile:

Jerome Powell will come to the chairman’s job at the Federal Reserve with a wide-ranging résumé – after working in investment banking, starting at Dillon, Read & Co. in New York, he became a partner at the PE firm Carlyle Group, where he built a fortune of at least $55m but probably more than double that. (New York Times)

Allianz chief economic adviser Mohamed El-Erian is a fan of Trump’s selection. (Bloomberg)

What happens to Gary Cohn’s dream of running the Fed deferred? (Politico)

Ex-J.P. Morgan Chase wealth manager Jennifer Sharkey, the who claims she was fired in 2009 for raising red flags of fraud and money laundering about a bank client, was let go for a much simpler reason, her former boss testified. (Bloomberg)

RBC Capital Markets’ head of research differentiates his recruitment strategy from that of competitors “where every third year they go through a massive hiring streak, pay peak of market for all of their talent on one- or two-year contracts, then drop like a stone, and they have to start all over again.” (Business Insider)

Citi says synthetic CDOs may reach $100bn as the comeback in complex credit derivatives blamed for exacerbating the global financial crisis gathers momentum. (Bloomberg)

Agreeing with rival Jamie Dimon, Credit Suisse Group CEO Tidjane Thiam says that bitcoin is the “very definition of a bubble.” (Bloomberg)

As cryptocurrencies explode in popularity, employers are clamoring for workers with expertise in the emerging field. (Bloomberg)

Among IT priorities listed by banking and financial services chief information officers in a recent Gartner survey, blockchain didn’t even crack the top 10 – Wall Street CIOs are far more concerned with beefing up existing systems with analytics, cloud services and other applications. (WSJ)

A Preqin survey, which collected data from 173 firms globally across the private equity, private debt, real estate and infrastructure sectors, found that 78% of firms increased their base salaries last year, with nearly a fifth hiking wages by over 10%, and 68% of fund managers expect to hike wages further next year. (Financial News)

Bill Ackman’s Pershing Square has hemorrhaged $1.6bn of assets in five months. (Business Insider)

The income fund managed by star PM Dan Ivascyn, a.k.a. the bond prince, has attracted $62bn in new cash so far this year, driving Pimco’s renaissance. (FT)

Investment strategist and conservative Republican John Maudlin argues for universal basic employment, rather than universal basic income. (MarketWatch)
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““

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