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Our new columnist, Stuart Fox – a former MD and head of Asia Pacific commodities at UBS – expounds the virtues of building a career outside Australia.
When I spoke recently at a “Going Global” forum organised by Finsia, I realised that young, ambitious bankers are always asking me one question. It doesn’t relate to commodities, interest rates, foreign exchange, derivatives, hedge funds or even working in an investment bank. What they all want to know is: What’s so good about an overseas posting?
I will try my best to answer this question, noting that my views do not reflect any particular institution or the industry as a whole. They are just a product of my own experience.
However, in giving my reply let me first clear up a common misconception: you should not move abroad for short-term monetary gain. Surprisingly, the first thing many people ask about is “expat benefits” such as shipping, housing, healthcare and school fees (even when they don’t have children!). Most contracts now are “local terms”, but that’s not even the point. Investment banks are very aware of the total cost of employees, and whatever benefits you receive upfront are taken into account at year-end.
It’s worth remembering that the firm is taking a significant risk sending you overseas. If you’re interested in moving, make it as easy as possible for the bank to choose you ahead of your competition. I remember one potential vacancy in Asia in which a prospective candidate unknowingly eliminated himself by saying: “it would take a lot of money to move me out there”.
So if short-term financial gain isn’t a good reason to go, what are the advantages of leaving Australia? I see three key benefits:
1) It’s about the money: Long term
I am not about to suggest that an overseas posting is a philanthropic mission. At its core, investment banking is about generating a sustainable long-term return from appropriate risk, so it is consistent for employees to expect the same benefit from their careers. An overseas posting provides access to bigger and broader markets, with greater profit potential.
It also provides exposure to diverse client bases and improved visibility within your firm and to competitors. In addition, many countries have lower tax regimes than Australia and offer the potential to generate tax losses while you’re overseas, further increasing the net long-term benefit to you. But as with most things in life, greater reward requires greater effort: they don’t just leave a pot of gold at Narita, Chep Lap Kok or Changi.
2) It’s not just about the money: Career development
The impact of foreign experience and exposure is not only about improving your current value. It also broadens the potential roles that you may be offered in the future. The opportunity to access Asian and global interest rates, foreign exchange and commodity derivatives and structured products was not possible for me from Australia.
This is also true of the relationships I developed with hedge funds, pensions and sovereign wealth funds, as well as the internal connections I made with key global risk, credit, legal, compliance and technology managers. My subsequent opportunities in management were a direct result of these experiences.
Some people justifiably ask “what if it doesn’t work out?”. In reality, most expats successfully complete their postings and many extend them. “I went for a year and I’m still here!” is a common sentiment. My view is that, if it doesn’t work out, you return home with much greater experience, a deeper understanding of global business, and a demonstrated willingness to take on a challenge and back yourself. In that position, you should be well placed to get your old job back or find a better one.
3) It’s not just about the money: Personal development
I am also not about to suggest that a foreign posting is a path to enlightenment. However, some of the broader benefits of overseas experience do facilitate personal development. Working in an environment where English is not the primary spoken language significantly enhances your communication skills. Experiencing a local culture helps you understand individuals and situations in their original context.
This perspective in turn provides an appreciation of what’s great and what’s less great about your own culture. Travel is obviously fundamental to an expat posting: Climbing Mount Fuji; walking the Great Wall; snowboarding in Verbier; taking in Wimbledon, Henley, Twickenham and the Hong Kong Sevens are a few of the awesome experiences that are out there.
However, if I had to answer “what’s so good about an overseas posting?” in only three words, I’d say: “it’s the money”.
Stuart Fox, formerly managing director, head of Asia Pacific commodities at UBS, started as a graduate recruit in Sydney. During his 15-year career, he spent 12 years overseas, with assignments in Tokyo, London, Hong Kong and Singapore, as well as extensive business travel throughout Asia, Europe and North America.
Fully agree.
I would add that going abroad gives any executive invaluable international perspective which is vital for career and personal development – Australia is less than 2-3% of the world economy, equity, bond and real estate markets. It hits you very quickly when you are abroad – there’s a bigger world out there – much bigger than just the Melbourne Cup or the Sydney Opera House.
Finally, you find out very quickly which are the executives that have never worked abroad as soon as they open their mouths…