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Ten years ago, young people in banking expected to work a 15-year stint. The precarity and ageism inherent in finance careers were offset by unlimited bonuses and the potential to earn very big money, very soon: by the age of 36 you could be done and dusted. Nowadays, banking jobs are still precarious and still ageist (70% of Goldman employees are millennials), but pay is generally less than before. If you don’t attain the seven-figure pay packages enjoyed by a few people at the top of the industry, how can you still ensure you’re prepared for an exit before you hit 50?

It’s a question that bothered one former trader at J.P. Morgan in London. He spent over a decade working on trading floors in the City and saw many of his colleagues struggling to find the time to manage their savings. We’re (unfortunately), unable to give his name for regulatory reasons, but we’ll call him ‘Jim’.

“When I worked in banking I was always very proactive with my personal finances,” says Jim. “I invested my money across all kinds of products including equities, bonds, mutual funds and start-ups. But when I looked at my colleagues, I found that most of them were struggling to find the time to do the same.”

People in banking are the archetype of ‘cash rich time poor’, says Jim. “You’re working 11-hour days and you often barely have time to spend with your family. There’s no way you’re also going to have the time to think about how to make your savings grow in the most tax efficient way,” he says.

While he was still working as a trader, Jim used the experience of managing his own money to start managing money for friends and family. “I started helping my friends and family and found I was making a significant difference to their lives. This was far more rewarding than trading, which had become increasingly bureaucratic and execution-focused since the financial crisis.”

Jim quit banking at the end of 2015 and has spent the past year retraining as a wealth advisor. His focus is on people earning between £100k and £200k, many of whom are working in financial services.

“You find yourself earning £10k a month and you wonder whether it’s ok to spend it and improve your lifestyle, or whether you should save it for the future,” says Jim. In banking, he adds that the attitude has often been that you should spend it: you’ll be earning more soon. Given the uncertainty surrounding banking careers, however, this may be wishful thinking. “You should get into the habit of saving 20% to 25% of your income for the future,” he advises. “And instead of thinking about what you’ll do when you earn £100k next year, you should be thinking what you’ll do if you earn £50k – or less.”

You should also be thinking about tax efficient methods of saving and investing. While Jim was trading, he says he invested in five start-ups, making the most of the UK government’s Enterprise Investment Scheme under which investors can (now) get a 30% income tax credit by investing in unlisted companies. “I was in a job where I felt I was plateauing and where I wouldn’t be able to get any upside to my earnings. I figured that if I couldn’t work for a start-up directly. I would invest my savings in start-ups and gain exposure to high growth companies that way.”

Investing in start-ups can be risky, however. Jim says he did considerable research into the companies he invested in – something which may not be possible for the average, time constrained banker. Now that he’s out of the industry and advising on investments full-time, he says investigating start-ups is one of his priorities. “Start-up investments are tricky. You need to find the right company with the right business model and management team. I spent a significant amount of my time meeting and vetting companies in the start-up space.”

Nowadays, most people in finance have doubled the expected length of their finance careers and expect to leave the industry aged around 50 instead of aged around 45, says Jim. The most sensible will think long-term from the outset: “You get a lot of people who are in their 20s and are just focused on buying a house,” Jim says. “Property is one part of a portfolio, but if there’s a downturn in the property market there could be a lot of panic in the UK. Ideally you want to be investing across different products, and in different global markets – not just in the UK, but in the U.S. and China, for example.”

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It’s not a good time to be a very expensive 40-something banker. Nor is it, frankly, a good time to be a moderately expensive banker aged 35+. McKinsey & Co says banks in developed markets could be at risk of losing another 25% of their profits in the next three years, and banks are reacting accordingly. They are cutting costs – at the top, or very near it.

Reuters reports that Morgan Stanley is relieving itself of managing directors in investment banking. Headhunters say the U.S. bank has also cut executive directors and VPs in fixed income. And HSBC has made senior cuts in equities sales and trading.

HSBC’s cuts are said include Colin Robb, a director of EMEA sales trading who joined the bank in November 2015, and James Holloway, a director of sales trading who joined from Goldman Sachs in 2009. Robb had 25 years’ experience in banking, Holloway 16. The bank is also understood to have let go of Ross Tobias, an equity trader with 18 years’ experience whom it hired from Citi in 2015, along with Daren Legg, another experienced equities trader.

“These are all guys from their late 30s to late-40s,” says one equities headhunter.

Meanwhile, the equities cuts at Morgan Stanley which were reported earlier this week are said by headhunters to have fallen mostly upon director-level staff in London. Despite saying its fixed income job cuts were over, the U.S. bank has also let go of two senior salespeople: Camille Khalaf and Robert Newman. Colleagues confirmed the exits. Khalaf was an executive director in hedge fund sales and joined from Deutsche in October 2015. Newman was a VP in rates sales and had worked for Morgan Stanley since joining as an analyst in 2010.

Headhunters said the cuts at all banks are unlikely to be over. “I had a lot of worried calls over Christmas,” said one. “- Particularly from people in areas like leveraged finance, financial institutions group investment banking, and industrials IBD.”

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J.P. Morgan and Bank of America have both reported their fourth-quarter and full-year results today. The good news is that both banks achieved healthy increases in their profitability last year. The bad news? Employees are being squeezed, still.

This squeeze was particularly in evidence at J.P. Morgan. Profits at the corporate and investment bank (CIB) rose by an impressive 34% last year compared to 2015. However, compensation in the business fell by 5%, while headcount was trimmed by 1%. Basically, J.P. Morgan’s CIB is hugely more profitable than before, but the average member of staff isn’t getting a look-in.

Bank of America doesn’t break out specific compensation or headcount figures in its global banking and global markets businesses. Overall, however, cost ratios in both areas were down last year while profits were up. The squeeze was particularly in evidence in global markets, where profits rose by a gigantic 58% in 2015 as costs were cut from 76% to 63% of revenues. If BofA’s traders are expecting a pay increase, they will very likely be disappointed.

All eyes on fixed income trading

Historically, banks flexed compensation in line with profits, so why the disconnect? The answer is to be found in the first chart below. If J.P. Morgan and Bank of America did well in 2016, it was thanks to one business and one business alone: fixed income trading. J.P. Morgan had its best fourth quarter ever in fixed income trading in 2016, but every other business in the CIB was either flat or down.

So, why aren’t fixed income traders driving pay higher for everyone? Firstly, we all know that banks aren’t that generous. Secondly, fixed income traders’ wonderful 2016 isn’t perceived as a byproduct of their own talents, but of market events: Brexit, Trump, and the second U.S. rate rise in a decade, were seen as the catalysts rather than anything traders did themselves.

More importantly though, fixed income traders’ wondrous 2016 comes after years of falling revenues and rising technology and regulatory investments. As figures from intelligence company Coalition reflect, banks largely maintained headcount in fixed income between 2009 and 2015 even as revenues in the business dwindled. 2016 was therefore payback time.

There is some good news, however. As J.P. Morgan CFO Marianne Lake, pointed out in today’s call, the bank’s compensation line benefited from the strength of the dollar in 2016. Sterling fell by 20% against the U.S. currency last year, enabling J.P.M. to book a saving of that magnitude in reported dollar terms even while paying its London staff flat. If a third of J.P. Morgan’s CIB compensation costs are incurred in London, the implication would be that 2016’s 5% cut in global CIB compensation is almost entirely down to currency effects.

Everything’s fine then? Not exactly. Given the huge increase in profits, the impressive performance in fixed income and the fact the pound only plummeted in the second half, J.P. Morgan’s bankers might have hoped to at least share in the currency bounty. Unfortunately that looks like very wishful thinking.

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Photo credit: Brian Moynihan, CEO, Bank of America; Maria Bartiromo; Jamie Dimon, Chairman and CEO, JPMorganChase and Andrew Ross Sorkin by Financial Times is licensed under CC BY 2.0.

Anyone working in the financial services arena knows that being a broker, trader, analyst or even C-suite executive is not for the meek. Trading floors, brokerage houses and other financial services firms are known for being rough-and-tumble environments where employees are rewarded well financially but pushed to limits unmatched in other fields. There is pressure on many levels, coupled with long hours and, often, individuals who use fear, intimidation and profane language to push employees to perform above and beyond.

From my perspective as a corporate trainer – and a guy once worked at a “soul-sucking” job that almost cost me my life – much of what goes on in such workplaces is harassment and, in many cases, outright bullying.

Workplace bullying is not OK

If you work in a place where there is a toxic culture of incivility, gossip and backstabbing, and if you and your coworkers are miserable to the point that work is affecting your health, your family, your productivity and even your faith in humanity, then there’s a chance that you are being bullied at the office. It’s a fact that too many people who work in the finance industry are in significant emotional and psychological pain due in large part to their jobs.

The question is not really whether or not this is happening, but what we as employees can do about it. In my mind, we have a responsibility to end generations of professional suffering and to begin a revolution in workplaces throughout Wall Street, the U.S. and ideally the world.

To those who are thinking about now that I’m a wuss, or that people should know what they’re getting into when they take a certain job – they should buck up or leave – there’s more to the story. This kind of behavior is costing financial services firms millions, if not billions, of dollars.

Every employee who leaves a job costs a company one and a half times that person’s former salary for replacement, retraining, changes in health insurance and more. In addition to the human aspect, there’s a significant financial incentive to act to retain talented employees.

Bullies are really cowards who seek power and control over other people because they think it will eliminate their fear. We need to work together to eliminate the bullies, so our workplaces can be healthy, exciting and productive environments and we can go home at night with a healthy outlook to provide support to our families with more than just our paychecks and bonuses. Believe me, there can be civility and mutual respect as we also hold people accountable and lead others effectively.

What you can do about workplace bullying

My suggestion is that employees mobilize and work together to lead this movement by systematically creating environments where toxic behaviors are unable to thrive. That includes being fully accountable, creating necessary boundaries, forging an unstoppable attitude, standing up to the most challenging colleagues and bosses, and finding as many people as possible who are willing to join us on this journey.

My motto, taken from an African proverb, is: If you want to go fast, go alone, but if you want to go far, go together. Being invisible – or apathetic – is not a solution. Instead of complaining (although I differentiate between complaining and some necessary venting), employees should take action to find solutions – albeit together.

Specifically, what should you do?

The first step would be to confront the bully or offensive person(s) with positive feedback. Instead of outright complaining, use productive language when stating your case.

Here’s an example of three possible responses to a common problem. (Spoiler alert: Number three is the correct course of action.)

A coworker criticizes you and/or your work in front of other colleagues or customers.

1) Aggressive response: “I’m sick and tired of you trying to one-up me in front of other people. I swear, if you do it again, you’re going to have a real problem on your hands!”

2) Psycho response: Make up false rumors about your coworker so his credibility will be irreparably damaged the next time he tries to speak to anyone about anything.

3) Assertive response: Pull your coworker aside privately and say: “Keith, I feel that it damages my credibility when you expose my shortcomings and correct me in front of others. If there is something you feel the need to correct, I would appreciate it if you would do it privately. Can we agree to this going forward?”

If sound reasoning doesn’t work, band together with others. Document everything. Go to human resources or upper management with concrete evidence and documentation. Make a business case for your appeal to eliminate a bully or to change the tenor of the workplace.

My advice is that you should only quit your job when it’s clear that change is not happening and is unlikely to ever happen, especially if your health is being affected.

Shola Richards, a certified emotional intelligence practitioner, director of training at UCLA Health, the university’s system of hospitals and medical offices based in Los Angeles. He is the author of the book Making Work Work: The Positivity Solution to Any Work Environment and the blog The Positivity Solution.

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Unlike Goldman Sachs, which only promotes managing directors every two years now, Morgan Stanley still makes people into managing director annually. It’s just done so: 140 people got the call, of whom 29 are in London. The full list isn’t yet public, although Financial News has it.

On a divisional basis, Morgan Stanley’s shiny new MDs are split like this, suggesting that for all the talk about ’empowering the risk function’ it’s still pretty difficult to make MD in risk even as technologists are being invited to the top table.

This high-level breakdown conceals another important omission though: no cash equities professionals at Morgan Stanley were promoted this time. All those equities people you see on the list? They’re all in prime broking, or equity derivatives, or electronic trading (Oliver Farrant, the COO of equities electronic trading, who started out in collateral management is on there); there are no cash equities traders or salespeople and sales traders at all. This comes as Morgan Stanley is making cuts in its cash equities business: a signal is being sent, and it’s not a good one.

Rates trading is a different matter. After a strong end to 2016, three rates professionals were bumped up: Vinay Dhanuka, head of sterling flow rates, Josh Hooker, head of G3 rates and Rob O’Donoghue, head of UK structured rates sales. All three are in London. There are also reports of generous bonuses in Morgan Stanley’s rates business, of which more to come soon…

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If you’re a Millennial or a member of ‘Generation Z’, you’re probably pretty into your phone. You’re probably an avid user of Snapchat, or Facebook, or WhatsApp. Maybe you send the odd text message? If you join an investment bank, there will be none of that (or at least not in work hours).

Deutsche Bank suspended a rates trader for using WhatsApp in December. Now Bloomberg reports that the German bank has gone one step further and banned all employees from using ‘communication apps’ like WhatsApp and from sending text messages whilst at work.

“We fully understand that the deactivation will change your day-to-day work and we regret any inconvenience this may cause. However, this step is necessary to ensure Deutsche Bank continues to comply with regulatory and legal requirements,” said the bank in a memo from Chief regulatory officer Sylvie Matherat and chief operating officer Kim Hammonds

The policy applies to work phones issued by Deutsche and to private phones used by employees for work purposes. It seems unlikely that a snap of your lunch sent from the trading floor would be permissible though.

In 2010, the U.K.’s Financial Services Authority began forcing banks to record and store traders’ mobile-phone calls for six months. One investment bank told the FSA that it would cost ₤500k ($611k) to monitor the calls of 50 employees.

Deutsche’s severance of the social media cord comes as most banks are busy trying to woo young people with shorter working hours, accelerated promotions and Silicon Valley-style tech offices. Whether this will palliate young employees’ forcible removal from social media remains to be seen.

Separately, earnings season is officially in full swing, and most big Wall Street banks’ stock prices are on the rise. Bullish analysts say it’s officially OK to fall in love with U.S. banks again as Friday’s fourth-quarter results released by big banks validated the industry’s post-presidential election rally that some thought might have gotten ahead of itself.

Some bankers are popping champagne in celebration. J.P. Morgan Chase’s 4Q net profit rose by 24% from a year earlier and Bank of America Merrill Lynch shot up by 43%, both beating already high expectations.

Daniel Pinto, the CEO of the firm’s corporate and investment bank, sent out a celebratory memo to take a victory lap and pat his staff on the back.

One bank that was not invited to the party? Wells Fargo, which continues to struggle with the fallout from a phony accounts scandal that damaged its reputation last year as revenues sank. The bank saw net profits decline by 5.4% from a year earlier and arguably isn’t positioned well for a rising-rate environment.

Meanwhile:

The number of City London job openings fell 27% between November and December, dipping below 5k, the lowest monthly figure for all of last year, according to Morgan McKinley. (City A.M.)

The largest European manager, Amundi, believes that Republican deficit hawks will rain on the Trump administration’s planned fiscal-stimulus parade, thwarting the bullish expectations of investors who have driven U.S. stock markets to record highs. (Bloomberg)

Joshua Kushner, Jared’s younger brother, is the founder of a venture capital firm, Thrive Capital, which has financed the photo-sharing app Instagram and the e-commerce company Jet.com, and he is now getting caught up in the scrutiny of Trump associates. (New York Times)

Ray Kahn, an ex-Lehman Brothers banker and a former managing director and the head of over-the-counter derivatives client clearing at Barclays, has joined the Ice exchange group’s interest-rate derivatives business. (Risk.net)

Why can’t you move to the buy side? A reversal of fortune. (Bloomberg)

BlackRock, the world’s largest publicly traded money manager, reported that its assets under management grew to $5.1 trillion but its full-fiscal-year profit decreased slightly as money flowed from actively managed funds to ETFs. (New York Times)

Wall Street’s biggest banks are in a bright spot after years of massive layoffs and pay cuts, but the same cannot be said for the largest asset managers. (Bloomberg)

These five trends are ominous signs for the securities industry. (Bloomberg)

Citadel Securities is trying a low-tech approach to less-liquid areas of the fixed-income market, relying more on humans than computers, a departure from its high-tech approach to taking a slice of big Wall Street banks’ business. (Bloomberg)

Point72 Asset Management returned about 1% last year, the second-worst annual performance ever for the billionaire Steve Cohen’s family office – his predecessor hedge fund firm, SAC Capital Advisors, it averaged 30% annual returns and suffered losses only one year – 2008, when it sank 28%. (Bloomberg)

Feras Al-Chalabi, a senior partner who ran Odey Asset Management’s Allegra European and European Absolute Return fund for 18 years, is set to leave after a rough year performance-wise for the firm. (Financial News)

Profits at hedge fund manager Lansdowne Partners UK surged from £218m in the previous financial year to £366.4m. (WSJ)

Pemberton Capital Advisors, Bain Capital and others are preparing to lend $50bn to leveraged borrowers in Europe that traditional lenders shunned as too risky. (Bloomberg)

During a heated spat over the 10-year Treasury yield, Jeffrey Gundlach called rival Bill Gross as a “second-tier” bond manager, revealing that feud isn’t really about bond yields, but rather who’s considered the bond king. (Bloomberg)

Why are only 9.4% of American mutual fund managers women? (New York Times)

How do you tell your boss you have too much work to do without coming across as lazy, uncommitted or not a team player? (Harvard Business Review)

Heading to Davos for the World Economic Forum? Here are the best places to ski. (Bloomberg)

Trump will not be attending. (Bloomberg)
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We haven’t heard much from John Cryan, CEO of Deutsche Bank, in 2017. Maybe he’s skiing? Maybe he’s detoxing? Maybe he’s sitting on a leather sofa in a corner office fanning himself with some headed paper after successfully reducing Deutsche’s settlement with the U.S. Department of Justice (D.O.J) from $14bn to $7.2bn? Either way, Cryan’s cryonic silence could be about to come to an end.

We have it on good authority that Cryan is about to come out of the deep freeze and announce to Deutsche Bankers that…there will be no cash bonuses this year. Moreover, there will be no new Deutsche stock bonuses that will vest in the next 12 months. 2016 Deutsche Bank bonuses, paid in 2017, will be non-existent.

Deutsche Bank declined to comment. The latest allegations follow reports that Deutsche Bank was being compelled to drain the cash bonus pool as a condition of the D.O.J settlement. However, senior sources at Deutsche tell us this isn’t the case.

Even if the D.O.J. isn’t forcing Deutsche to do the dirty on this year’s bonuses, the bank still has good reason to cut its cash bonuses to the bone (or do away with them altogether). J.P. Morgan’s banking analysts say Deutsche Bank will be seriously under-capitalised to the tune of €4.3bn by 2018. Analysts estimate it could raise up to €2.3bn if its cuts cash bonuses, pays its people entirely in newly issued stock, and claws back bonuses from previous years.

Deutsche Bank doesn’t announce its fourth quarter results until February 2. In the call accompanying the bank’s third quarter results, CFO Marcus Schenck said no decisions had been made on the structure of 2016 bonuses but that the bank would probably err on the side of stock.

Deutsche insiders say Cryan’s imminent announcement will indeed involve some stock payments. However, these stock payments will allegedly be offered to less than 20% of Deutsche staff. They’ll also be deferred over three years, with the first payment vesting in 2018. Deutsche’s managing directors and high earners will be subject to the bank’s usual cliff vesting rules and won’t get any of this year’s deferred stock until 2022 or later.

Will Deutsche staff all tolerate this? Last year there were complaints that the German bank’s bonuses were ‘the worst ever.’ Now it seems DB staff are about to be unpleasantly surprised again. Thankfully, they have their salaries as consolation: Deutsche hiked fixed pay 30% in 2015 and then again last year.

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If you’re applying for a graduate job in an investment bank, you might want a back-up plan. By banks’ own admissions, they accept hardly anyone (think 2% at Goldman Sachs, 3% at Citi). The Big Four accounting firms (Deloitte, EY, KPMG, PWC) aren’t that much better. However, they do at least accept a few more people (depending upon how you cut the figures). So, even if you want to work for an investment bank, should you apply to the Big Four just in case?

New figures from High Fliers research, which monitors the UK graduate recruitment market, suggest you probably should. This is why:

1. Accounting firms hire twice as many UK graduates as investment banks

High fliers hiring

Source: High Fliers Research

2. Long term, accounting firms have been a growth sector for graduate recruitment. Investment banks have not

Accounting firms growth

Source: High Fliers Research

3. In the UK graduate market, accounting firms are much easier to get into

High Fliers statistics apply to graduate recruitment in the UK only. The company provides sector-based statistics for graduate applicants per graduate job each July. In July 2016 it said there were 38.2 applications per banking vacancy, compared to 18.2 applications per professional services and accounting vacancy. This puts the success rate of applications in the two industries at 2.6% and 5.5% respectively.

4. Accounting firms are now finding it harder to attract graduate applicants than investment banks

Most banks have now closed their 2017 graduate recruitment processes, although some Big Four graduate jobs are still open. The latest High Fliers figures suggest applications to investment banks are up 3% on last year, while applications to accounting firms are down 5%. Accounting firms are falling out of favour.

5. But….the Big Four are substantially cutting their graduate intakes for 2017 while investment banks are only cutting them a bit

The bad news is that accounting firms are trimming their graduate hiring wings. Graduate recruitment and professional services sector is down 8.4% this year compared to last. In banking it’s only down 3.2%.

High fliers cuts

Source: High Fliers Research

6. And…starting salaries in accounting firms are quite a bit lower than in banks

Banks also pay a lot more than accounting and professional services firms. The figures below are median pay figures for jobs across all areas of investment banks and even on this basis, banks are 57% more generous. Figures including salaries and bonuses from London recruitment firm Dartmouth Partners suggest the differential may be wider still: some banks pay their front office graduate hires £75k in year one.

High fliers 2017 pay

Source: High Fliers Research

Fundamentally, if you’re a university student trying to find a graduate job neither big investment banks nor Big Four accounting firms are a sure-thing. Students who want to cover their backs may therefore want to apply to both sectors. But don’t confess this during interviews: neither banks nor accounting firms like to hire people who’ve applied to both areas.

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If you’re one of the few people to interview with Point72 Asset Management, you’ll almost certainly be asked a question that gives an insight into where Steve Cohen’s family office thinks hedge funds are heading.

“A model predicts a company’s revenues based on four third-party data sources. They suggest that the company’s revenues will be X, but consensus is Y. How do you know how to make a bet? Coming up with an answer requires a whole load of statistical analysis related to that,” said Matthew Granade, chief market intelligence officer at Point72 Asset Management, speaking at the London School of Economics Alternative Investment Conference today.

If you’re starting out in finance today, you need to understand how the industry is evolving over the next five years, he said. This doesn’t just mean that computers are taking over, but that the people involved in the process (or at least those that survive) need to understand that programming, statistical analysis and the traditional “creative” human processes need to be combined.

Granade is a big proponent of the so-called ‘quantimental’ approach – namely, using huge data sets from external sources to support the decisions of more traditional fundamental stock-pickers.

“At Point72 we have portfolio managers who use the best of both,” said Grenade who started his career at Bridgewater Associates, where he eventually became co-head of research before leaving in 2012.

Investors are not relying simply on sell-side research or corporate access to companies anymore, he says. Instead, vast quantities of data come from external sources and it needs to be interpreted correctly. The likes of credit card data, satellite images of crops to give an idea of potential yields, or geolocation information from mobile phones to get an insight into purchases, for example, are not necessarily best absorbed by human traders, he said.

“Hedge funds are learning from quants,” he says. “If you look at something like portfolio construction, for certain inputs the maths is pretty much a pre-determined thing. Discretionary hedge funds still have humans sitting there doing that work. A computer can do it better and faster than humans.”

Not surprisingly, Granade says skills are changing and anyone starting out right now needs not only to understand what is needed currently, but what’s going to be needed in the near future.

“It used to be that you started out in investment banking and then went into private equity. You got very good at financial modelling, amazing at Excel, and then maybe went into a hedge fund. This misses how the industry is changing,” he said.

Granade acknowledges that there’s going to be increasing demand for data scientists and quant analysts. But there will also be a “minimum bid” for the skills required of any analyst or portfolio manager, he said.

“Firstly, you’ll be great at the analytical process, be able to structure problems well and be able to apply the traditional creative investment process to data,” he said. “But you’ll also need statistical know-how and to understand quantitative techniques, as well as a technical ability to manipulate data using some sort of programming language – either Python or R.”

Finance is still an “apprenticeship” business, he said, so key to a successful career is joining a company that understands where the industry is heading.

“One of the things computers are not going to replace humans is during human contact – understanding what a person wants and why,” he added. “As an example, we send investors into to corporate access meetings to think about body language of the executives and those kind of things.”

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Credit Suisse is cutting costs. The Swiss bank cut CHF800m of costs from its global markets division last year, and it says it wants to cut another CHF400m by 2018. Expensive senior staff at director level and above are being jettisoned in the process, but the good news is that – in fixed income at least – some of them have been hired elsewhere.

Mark Grilli, a former director in interest rate sales at Credit Suisse, has joined Odeon Capital Group, a New York-based broker dealer, as a senior vice president in sales. Joe Midmore, a former director in Credit Suisse’s London prime services business, is now head of sales and strategy at Open Gamma, a risk analytics firm. At the end of last year, Samer Oweida, a former Credit Suisse MD and New York-based head of Americas FX and emerging markets sales, joined Morgan Stanley as an MD in FX and emerging markets.

All three are experienced traders/salespeople and should therefore provide some hope to 40-something markets professionals with concerns about their employability. Grilli spent nearly 20 years at Credit Suisse in its various guises. Midmore spent nearly 15 years with the bank and Oweida was there over nine years.

As fixed income trading picks up after a six year slump, the appointments could be taken as an indication that demand for senior markets staff is making a comeback. If so, it will come as good news to the 7,000 front office fixed income markets staff who’ve lost their jobs across banks globally since 2010 according to Coalition.

Celebrations may be premature, however. As far as we can make out, none of the eight people who were let go from Credit Suisse’s rates business last May have found new jobs – even though rates trading is making a comeback. Nor is it certain that all rates businesses are benefiting equally: Bank of America said its rates business had a weak fourth quarter, even as J.P. Morgan said rates was a big contributor to its out-performance in the fourth quarter.

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Like it or not, the compliance hiring boom is almost certainly over. After years of hiring and spending and regulatory appeasement, banks are going all out to cut compliance costs through automation.

J.P. Morgan CFO Marianne Lake said as much during the call accompanying last week’s fourth quarter results. J.P. Morgan’s spending on all controls has increased by $3bn over the past “several years”, said Lake, but this is now expected to start “bending down” as J.P. Morgan’s processes “mature” and are automated.

J.P.M. isn’t the only bank with an eye on compliance and control costs. Last December, Credit Suisse said compliance costs had plateaued, while a report from McKinsey & Co. suggested that all efforts now are on automating the regulatory functions rather than showering them with additional money and headcount.

This being the case, the contemporary army of compliance monitoring and control room professionals might want to learn how to code: the new compliance jobs are not the same as the old ones.

Goldman Sachs is a case in point. The firm is currently looking for at least four people to join a new regulatory operations team in its Warsaw technology hub. Candidates need to be experts in programming and big data. Previous compliance experience is not necessary.

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Photo credit: We are the robots by Duncan Hull is licensed under CC BY 2.0.

“I was interviewed by 22 people before I was hired by Goldman Sachs,” says Dr Ewan Kirk, chief investment officer at quant hedge fund Cantab Capital Partners. Algorithms might have done a better job, he believes.

Getting into any front office finance job is a tough slog, and only a tiny proportion of people make the cut. But banks, private equity firms and hedge funds could make better hiring decisions if they take people out of the process, he says.

Kirk ran a team of 120 people working in Goldman Sachs’ Strategies Group in London before co-founding Cantab Capital Partners in 2006. Cantab has said previously that it receives around 700 CVs a year, but only hires a handful.

Cantab, he says, tried to base its hiring purely on the CVs it received. “We decided that we’d just hire them, rather than go through the interview process. Then set them loose in a quantitative systematic mathematics environment,” he said.

Did it work? No. “At least half the people who apply are probably nuts, so you have to actually meet them to find out whether they’ll fit in,” he said. “Nuts is probably the wrong word. They’re just too clever.”

Generally, though, the recruitment process should be more automated, he believes: “There’s a whole load of research that shows people in interviews pick people like them, which is a bad a thing. They pick the wrong people, and could make better decisions if they based it on anonymised CVs,” he said at the London School of Economics Alternative Investments Conference.

To some extent this is already happening. Investment banks have started employing the services of the likes of HireVue during the recruitment process at a graduate level. It uses “predictive analytics” to sift through 15,000 traits of existing or past top performers at the firm and applies this to an automated interview for potential new recruits.

Kirk delivered a talk about bias against algorithms in finance – or what he called “systematic squeamishness” – and suggests that most people in going into the industry have a skewed view of computer driven strategies. They view them as more prone to error, and are much less forgiving of machines making mistakes than humans, he said. But algos are better than humans in almost every facet of life, he said, but they still make mistakes and this is what is seized upon.

“This is my thing. I’m right at the geeky end of finance – as massively geeky as you can get,” he said. “You probably aren’t as geeky as me, which is why you haven’t thought about statistics and find it very difficult to believe that a computer can do a better job than you can.”

Algorithms are only correct around 52% of the time, he says, but it’s human nature to focus on the 48% time they are wrong.

“If there’s an algorithm which would give you a set of rules that would make you better at your job, why would you not use it?” he said. “It’s very hard for people to use these rules as they feel like they’re deskilling their job, or deskilling the edge that they have. But these rules can ultimately make the outcome better.”

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Photo: Getty Images

““

It’s official: for all those who thought that Brexit didn’t really mean Brexit, or that a ‘red, white and blue Brexit’ would still somehow also admit some of the EU’s gold stars, reality has struck home. UK prime minister Theresa May will today outline the UK’s approach to Brexit in more detail than ever before for an audience of ambassadors from across the world. If you work in the City it will not be easy listening.

May is reportedly set to say that Britain needs a clean break from the EU. There will be no compromise in immigration, no compromise on sovereignty and no remaining in the single market. There will also, therefore, be no more of the passporting that 5,500 firms in the UK banking industry currently rely upon when they trade with Europe. Without passporting, UK-based banks working with clients in Europe (eg. most large U.S. investment banks) will have to rely upon the vagaries of ‘equivalence’ (ie, matching regulations with the EU in order to access EU markets) – and as Bloomberg points out, this is far from ideal. Firstly equivalence can be withdrawn whenever the EU feels like it. Secondly, equivalence doesn’t cover, ‘lending, deposit taking, payments services, or selling hedging products or insurance through banks.’ Thirdly, the City of London will have to abide by regulations set by Europe, over which it will have no influence.

UK lawmakers are seemingly trying to convince themselves that banks are exaggerating the dangers of lost passporting. In December, ‘Brexit minister’ David Davis reportedly said passporting was unimportant, and accused banking bosses of over-egging its significance. Ahead of May’s speech, the UK’s Treasury Select Committee has reportedly asked senior bankers like HSBC’s Douglas Flint to reiterate the precise threat that Brexit poses to the finance industry in the belief that he’s been scaremongering. Flint previously warned the Select Committee that banks will need to start moving jobs soon unless a satisfactory solution to banks’ position post-Brexit is arrived at. Flint said it took HSBC three years just to move staff from London to Birmingham. Given that Brexit will take in mid-2019, HSBC is therefore already behind schedule if it wants to shift jobs to Paris or Ireland.

Ever-optimistic, Britain’s Brexit and banks supporters have a plan. They’re still gunning for the kind of ‘equivalence plus’ regime sketched out by Bank of America last September. In this Elysian ideal, UK and EU financial regulators will work together to establish common European financial rules and those rules won’t be altered at the whim of the EU. Equivalence will be a matter of mutual agreement and won’t be withdrawn overnight. Unfortunately, and as the Wall Street Journal points out, these demands amount to, “a new, bespoke deal that gives Britain-based banks all the access they have now.” – And that sounds very unlikely indeed.

Separately, a senior M&A banker has been slapped down over a derogatory restaurant review. The Observer reports that Mark Brady, global head of M&A at William Blair, wrote a one star review of a top Chicago restaurant which customarily charges customers in advance after he was charged despite not turning up for his meal. “Complete assbags,” wrote Brady after his refund was refused. “We missed the date since there was no confirmation notice and they kept the whole payment…” The restaurant owner was stung into responding, pointing out that two confirmation emails were sent automatically and that Brady’s complaint makes no economic sense, as per the excerpt below.

Brady

Brady subsequently deleted the review.

Meanwhile:

Pay for senior bankers in London is already 20% below Wall Street, and it needs to stay that way. (Financial News)

After Brexit, EU nationals in Britain will probably be subject to work permits and visa waivers. (Financial Times)

Sergio Ermotti at UBS: “We have a Frankfurt base where we house our wealth management operations and not just that… We have a framework in place and infrastructure that can be expanded if needed.” (Reuters)

Brexit “will make Frankfurt the clear European centre for financial market regulation and simultaneously, Frankfurt might indeed become the European centre for supranational risk management.” (Business Insider)

Dutch ‘Waterland Private Equity Investments’ is opening in London” (Financial News)

Can computers and machine learning outperform human experts in long/short equity trading? (Medium)

Maybe that criticism of economics you’re reading is unfounded? (Chris Auld)

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Contact: sbutcher@efinancialcareers.com

It’s tough in equity capital markets (ECM) right now, and arguably even tougher for those at the top originating the business. Antony Isaacs, the former head of UK ECM and corporate broking at HSBC, has just managed to find another role, however.

Isaacs – who was ejected from HSBC in July last year as part of its ongoing investment bank restructuring – has just re-emerged at Canaccord Genuity. There, he is a managing director and head of ECM for EMEA.

HSBC culled a number of senior bankers in the middle of last year. More recently, however, it’s turned its attentions to cutting senior people in sales and trading.

Isaacs was brought in by HSBC in May 2015 to win more advisory work from British companies, but the Brexit vote made an already difficult market for ECM bankers even tougher. Isaacs left after just over a year at the bank.

IPO volumes in EMEA declined by 49% in 2016 to $70.3bn, according to figures from Dealogic. HSBC didn’t break into the top ten in any geographical market last year.

Isaacs spent the two years prior to joining HSBC as a founding partner of independent advisory firm Ari Advisors. He previously worked at Macquarie as ECM EMEA head and the head of originations and solutions group. Before this, he spent eight years as head of UK ECM at Credit Suisse.

Antony is the brother of Jeremy Isaacs, the former head of Lehman Brothers’ Asia and European operation. He now runs his own private equity firm, JRJ Group.

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Photo: Getty Images

““

Today is the day that Morgan Stanley announces its fourth quarter and full year results for 2016. Analysts at KBW thought the U.S. bank’s fixed income trading business had done inordinately well: they were predicting a 75% increase in fixed income trading revenues in the fourth quarter of last year compared to 2015, even though J.P. Morgan and Bank of America’s fixed income trading revenues were ‘only’ up 21% and 11% respectively.

In fact, Morgan Stanley’s 2016 tripled in the fourth quarter. Even so, headhunters say the bank has just made another round of fixed income sales and trading layoffs – principally in the U.S., with around 10 people leaving.

Morgan Stanley declined to comment on the headhunters’ claims. If true, they follow layoffs in Morgan Stanley’s investment banking business and in its London fixed income business. They also come after Morgan Stanley CEO James Gorman celebrated the bank’s ability to increase fixed income revenues despite having 25% fewer fixed income-focused staff than previously.

If fixed income jobs are disappearing at Morgan Stanley, the outlook is reportedly better for fixed income trading bonuses. The IBD bonus pool at Morgan Stanley is reportedly down by around 15%, but headhunters say the bonus pool for Morgan Stanley’s rates business is up by double digits in percentage terms. Then again, this may not be as exciting as its sounds: “Morgan Stanley have paid badly for years and if they’re hiking rates bonuses, they’ll be doing so from a very low base,” one headhunter comments.

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Photo credit: Morgan Stanley building by Alan Wu is licensed under CC BY 2.0.

““

Terra Firma has taken a radical approach to ensuring that it doesn’t attract graduate applications from the sort of cookie cutter recruits that apply to large investment banks – it has cut salaries and eliminated cash bonuses for the first five years of a new employees’ tenure.

Now, starting salaries for those joining its graduate programme are £35k ($42.6k) – a 50% reduction on previous years – and there are no cash bonuses. There is, however, something far more exciting for young people struggling to get a foothold in London: Terra Firma will put money aside so that its young employees can put a deposit down on a house.

How much money? Speaking at a conference this morning, Terra Firma founder Guy Hands didn’t say exactly. He did say: “We’ll pay for a deposit on a house in London…40% of the average cost of a house in London – in a good area.”

Average house prices in London are £473k across all areas, rising to £1m+ for flats in Notting Hill. Hands may not have Notting Hill in mind for his juniors, but assuming they buy a house costing £500k, this implies a “gift” from Terra Firma of £200k, or £40k a year.

This makes good financial sense for Hands, who’ll be saving £35k a year on salaries and won’t be paying any cash bonuses. The move follows a cut in salaries across Terra Firma at the end of last year.

Hands presented the new pay structure as a way of repelling the wrong kind of applicant. “We used to try and pay what Goldman Sachs does, and also give cash bonuses,” he added. “But we decided that it wasn’t attracting the right person – it was attracting people with short-term aims.”

If this seems like a way to turn off applications, it’s worth noting that Terra Firma can afford to do so. Last year, it received 3,000 applications for the handful of graduate roles that it offers.

Hands said the new ‘house deposit Terra Firma’ wants to hire graduates who demonstrate an openness to learning new things, emotional intelligence and a longer term outlook instead of an interest in earning lots of money. To this end, it’s will be eliminating minimum academic requirement for the 2018 intake. Terra Firma previously asked for a 2.1 degree, but will now accept applications from all academic backgrounds. This is all part Hands’ philosophy that academically gifted students are not necessarily the best recruits and many have to “unlearn” their education in order to succeed in the real world. Hands himself is dyslexic.

“I don’t want to discourage you,” Hands told the London School of Economics Alternative Investment Conference today. ‘But it will be your personality and behaviours that will matter much more going forward and you should build this up prior to leaving university. Join student societies, get work experience, do charitable work, community forums – demonstrate that you know how to think outside of the classroom.”

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““

We have it on good authority that Richard Godfrey, a former senior rates trader at Credit Agricole and director of credit markets at BBVA, is moving into an exciting new role on the buy-side. Sources say Godfrey is off to Aviva Investors, where he will help build out the firm’s structured derivatives capabilities ahead of a new fund launch.

Godfrey is nothing if not flexible. He began his career in 2006 as a prop trader in government bonds at RBS. When prop trading disappeared, he became a flow trader on the government bond desk at Credit Agricole for two years. From there he moved into credit trading, before becoming director of global credit markets at BBVA. Just 12 months on, he jumped to small investment manager Cadogan Finch, and now – two years after that – he’s off to Aviva.

The moral of the story is that if you want to survive, keep moving. Godfrey’s career is one of small, incremental moves in the right direction.

Aviva didn’t comment on his appointment. It comes after Vidur Bahree, a former corporate financier, left his role as investment director at the Aviva Group a few weeks ago. The Aviva Group investment function is said to have been reorganized, with various members of staff who were only hired 15 months earlier asked to leave.

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Photo credit: Jump Fish by LaniElderts is licensed under CC BY 2.0.

However you look at it, something exceptional has happened in Morgan Stanley’s fixed income trading business. In the fourth quarter of 2016, revenues were up 220% on the previous year. Ok, there was Trump. Ok, there was the turn in the interest rate cycle, but J.P. Morgan and Bank of America benefited from those events too and they only managed Q4 increases of 1% and 12% respectively.

It might be argued that Morgan Stanley had the advantage of coming from a lower base. This would, indeed, be true: in the fourth quarter of 2015, fixed income trading revenues at Morgan Stanley were only $460m, compared to $2.8bn at J.P. Morgan and $1.8bn at Bank of America. It will always be easier to achieve a 220% year-on-year increase from an almost standing start.

Morgan Stanley’s fixed income achievement shouldn’t be entirely discounted on the basis of size though. As the chart below shows, the U.S. bank has achieved something impressive in the past three years. And as management like to remind everyone, it’s done so with 25% fewer fixed income sales and trading staff and 44% fewer risk weighted assets in the fixed income business (RWAs are in billions in the chart below) .

How can this be? James Gorman didn’t shed much light on the issue today, but his earlier comments offer some explanation.

It’s all down to velocity

Morgan Stanley’s fixed income trading miracle – namely, its huge increase in revenues simultaneous with a significant decrease in risk-taking and risk weighted assets (RWAs) is almost certainly the result of James Gorman’s policy of ramping up the bank’s “balance sheet velocity.” This is the rate at which it uses its risk weighted assets (RWAs) to generate revenues.

Gorman last mentioned the bank’s policy of improving the velocity of risk weighted assets in its fixed income business in his investor presentation a year ago. Helpfully, Morgan Stanley’s own banking analysts also provided a lengthy exposition on the importance of the policy in their banking outlook report from 2011. By increasing the “fungibility” of RWAs (ie. the ability to move them between trading businesses) and by monitoring the metrics around RWA velocity and thereby ensuring assets don’t get tied up in low revenue and illiquid positions, they said banks would be able to offset the pressures of shrinking trading margins and increasing costs.

Morgan Stanley appears to have taken this advice to heart. All banks have been busy optimizing their balance sheets; none has done so to such good effect as Morgan Stanley.

The people responsible for this transformation aren’t Morgan Stanley’s fixed income traders and salespeople. While they deserve some of the credit for the bank’s increased revenues, it’s the bank’s liquidity and balance sheet specialists behind the scenes that have driven the increased velocity of its RWAs. Several have arrived in the past few years. – Morgan Stanley’s global head of capital and balance sheet management, Frank Tredici, joined from Credit Suisse in 2010. Its COO of global capital and balance sheet management, Jennifer Haupt, joined from Citi in 2012. Jim Brooke, its EMEA head of business unit capital and balance sheet management, was an auditor at Marks & Spencers who joined Morgan Stanley as a controller in 2007 and was promoted to head of EMEA RWA allocation last year.

Morgan Stanley is said to be rewarding its fixed income traders with higher bonuses for their efforts in the fourth quarter; it might want to reward these balance sheet-crunchers too.

Year-on-year, it’s Morgan Stanley’s M&A bankers who stand out though

Separately, even though Morgan Stanley’s fixed income business had an exceptional fourth quarter, the same can’t be said of its performance across the year.

As the chart below shows, J.P. Morgan remains the stand-out performer in fixed income sales and trading for 2016 as a whole. Morgan Stanley’s strength lies in M&A, but other areas of its investment banking division are struggling: it significantly under-performed in equity capital markets (ECM) and debt capital markets (DCM)..

Gorman is optimistic nonetheless. In the slide below, from the presentation accompanying today’s call, Morgan Stanley promises to hire in equities trading, particularly in Asia, and to ‘deepen its bench’ in fixed income.

Although Morgan Stanley is going to stop disclosing risk weighted assets assigned to its fixed income business in future, further increases to ‘trading velocity’ are also on the cards. Morgan Stanley’s balance sheet optimization specialists haven’t finished yet.

Strategic priorities for Morgan Stanley’s sales and trading business in 2017:

Strategic priorities

Source: Morgan Stanley

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““

Luke Ellis, CEO of Man Group, knew that he wanted to work in finance by the time he was seven. At aged three, he was playing cards. By five, he was betting on horses under the supervision of a “badly behaved” grandfather.

His motivation for going into the City, he says, was never to get rich, but because he knew he wanted to work with numbers and finance was the best place for this. Anyone thinking of signing up to a hedge fund today as a path to riches needs to get real, he said.

“There are 10,000 hedge funds and if you can list 20 billionaires, you’re doing well,” he told the London School of Economics Alternative Investments Conference.

“It’s a business where you have to work really hard. You cannot be the smartest guy in the room any more, or the smartest guy in the market because the availability of information today is so great,” he said.

Billionaire status might be elusive, but you can still do well in a hedge fund, particularly if it’s large. Top performing hedge funds with over $4bn in assets under management – making a return of over 9.5% – paid their portfolio managers an average of $6.7m last year, according to headhunters Glocap, Even those making a loss earned $774k, the figures suggest.

But hedge funds are living off past glories – the whole idea that you can simply walk into a money management role and make millions is out of touch with reality, believes Ellis.

“In the early 80s, people went into the City because it was interesting. I would not encourage anyone to work in finance if they think it’s a way to get rich quickly,” he said. “A lot of people working in finance have been very lucky that their careers coincided with a 25-30 year bull market and they were able to make money.”

Ellis retired from finance in 2007 after 10 years working at J.P. Morgan as global head of equity derivatives because it wasn’t “fun anymore”, he said. Anyone who has earned enough money to support their life, but continue to work if they’re not enjoying it is an “idiot”, he added.

Since returning to finance to work at Man Group in 2009, Ellis said that one of the biggest challenges is competing for the right people. Man Group has a mix of quantitative and discretionary strategies, but the issue has been attracting quants and data scientists, he said.

“We’re not competing against Point72 or Credit Suisse, we’re competing against Google. Google wants to hoover up every data scientist out there, so we need to give them something interesting to do. We can’t compete with Google when it comes to money. Sergey could probably buy Man with his pocket money,” he said.

Man Group has been running a Python coding competition to unearth talent from non-traditional areas and it’s been creating code that its programmers are putting on open source platforms – despite hedge funds’ traditional protectionist attitude towards intellectual property, he said.

However, Ellis remains convinced that despite the overwhelming talk of quant strategies taking over the hedge fund industry, they will still be the minority.

“A sensible number is that quant strategies make up 10%. In ten years’ time that number will be higher, but still 20-25%. The quant businesses are interesting, they make for some good stories and it’s something people can relate to. But the vast majority of humans still have an aversion to algorithms,” he said.

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““

Right then, Theresa May has outlined her plans for a very hard Brexit. Conveniently enough, a lot of the senior bankers that matter are gathered at Davos, and have taken the opportunity to tell her what they think.

Except, there’s an eerily familiar feel to their reactions. City figures are cautiously welcoming May’s plans to phase the UK’s exit from the European Union and the increased clarity on Brexit plans. But the hardline stance on lack of single market access pretty much means that banks’ contingency plans that have been delicately poised on ice will be rolled out sooner rather than later.

“If you don’t know where you are going, you have to plan for the worst and execute faster,” HSBC chairman Douglas Flint told Bloomberg. “This isn’t rocket science.”

“Activities specifically covered by EU legislation will move, and looking at our own numbers, that’s about 20 percent of revenue,” he added.

Morgan Stanley said that it’s most likely going to have to kick-start a new European office in either Frankfurt or Dublin. UBS has already started the move, and Citi and Credit Suisse were switching jobs out of London anyway.

But if you think Brexit means ‘just’ the loss of 80,000 or so banking jobs from London, it’s worth remembering the whole house of cards/Jenga theory when it comes to selectively removing functions from the City.

“The harder the Brexit, the faster and stronger the erosion of London’s position as a financial services center,” Blair Adams, a partner with DMH Stallard, a London-based law firm that represents hedge funds and other investment companies told Bloomberg.

Separately, after a great final quarter Morgan Stanley is optimistic for 2017. Or at least more optimistic than it was at the beginning of last year.

“Going into 2017, the market sentiment is clearly more optimistic than we were going into 2016,” CFO Jonathan Pruzan told Bloomberg. “The tone is better, all the markets are open and constructive, which is not where we were last year. So from a sales and trading perspective, we continue to see good levels of activity.”

But Pruzan clearly wasn’t on the same page as CEO James Gorman. As we’ve pointed to already, Morgan Stanley isn’t about to reverse the cuts it made in fixed income and Gorman’s jubilant statements about doing more with less has been replaced with a more cautious tone.

“There’s no point getting ahead of ourselves,” he said during yesterday’s conference call.

Meanwhile:

Only 10% of Deutsche Bankers will receive a bonus this year (New York Post)

Anthony Scaramucci is free to join Trump (Business Insider)

He believes Trump has the “best political instincts of his generation of politicians.” (Bloomberg)

Deutsche Bank’s global head of sales, Jonny Potter, has left (Business Insider)

Fintech firms that help banks monitor trader chatter are staffing up (Financial News)

Deutsche Bank has settled the DoJ fine at $7.2bn (Bloomberg)

“I do think employment in finance will decrease and those people working in the industry will be doing very different kinds of jobs” (Financial Times)

Blockchain could save investment banks $8bn a year, or 30% of costs, according to Accenture (Business Insider)

John Daly, Goldman Sachs’ chairman of equity capital markets, has retired after 28 years at the bank (Bloomberg)

Tidjane Thiam has said that Credit Suisse will make more cuts, but “it’s not that material” (Bloomberg)

Ex-UK foreign secretary William Hague is helping Citi navigate Brexit (Sky)

Women dominate the ranks….in corporate governance (New York Times)

France is encouraging its citizens not to use washing machines or printers in a bid to save electricity (Bloomberg)

If you carry more “education genes” you’re less likely to breed (Guardian)

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““

How to avoid blowing your banking pay and get out by the age of 45 (or thereabouts)

Bonfire of 40 year-olds as HSBC, Morgan Stanley cut at the top

J.P. Morgan and Bank of America’s results deliver the same hard message for their bankers

All eyes on fixed income trading

How to handle harsh colleagues when you work in banking

Workplace bullying is not OK

What you can do about workplace bullying

Look who DIDN’T make MD at Morgan Stanley

Morning Coffee: 20-somethings who join banks in for a whole new shock. One bank excluded from earnings euphoria

Meanwhile:

John Cryan and the hideous news on Deutsche Bank bonuses

Should you apply to the Big Four or investment banks? Or both?

1. Accounting firms hire twice as many UK graduates as investment banks

2. Long term, accounting firms have been a growth sector for graduate recruitment. Investment banks have not

3. In the UK graduate market, accounting firms are much easier to get into

4. Accounting firms are now finding it harder to attract graduate applicants than investment banks

5. But….the Big Four are substantially cutting their graduate intakes for 2017 while investment banks are only cutting them a bit

6. And…starting salaries in accounting firms are quite a bit lower than in banks

How to survive in a hedge fund over the next five years, by Point72 Asset Management

Ex-Credit Suisse traders are finding new (and sometimes better) jobs

Goldman Sachs & others are automating their compliance jobs

I interviewed with 22 people to get a job at Goldman Sachs. But a computer could have done a better job

Morning Coffee: Brexit to official cripple the City of London. Senior M&A banker shamed over restaurant review

Meanwhile:

HSBC’s ex-head of UK ECM has just landed another big job

Morgan Stanley laying off fixed income traders, hiking bonuses

Terra Firma has chopped bonuses for juniors, cut pay by 50%, but will buy you a house in London

Ex-senior rates trader demonstrates art of landing a big job on the buy-side

Are these the people responsible for Morgan Stanley’s fixed income trading miracle?

It’s all down to velocity

Year-on-year, it’s Morgan Stanley’s M&A bankers who stand out though

Strategic priorities for Morgan Stanley’s sales and trading business in 2017:

Man Group CEO: Get real, you won’t become rich working for a hedge fund

Morning Coffee: Investment banks activating plans to move jobs out of London. Morgan Stanley’s mixed message

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2. Long term, accounting firms have been a growth sector for graduate recruitment. Investment banks have not

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4. Accounting firms are now finding it harder to attract graduate applicants than investment banks

5. But….the Big Four are substantially cutting their graduate intakes for 2017 while investment banks are only cutting them a bit

6. And…starting salaries in accounting firms are quite a bit lower than in banks

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