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Interdealer brokers want redundant bankers

There’s hope for the army of former bankers who are occupied with little more than topping up their tans: the likes of ICAP and Tradition are hiring.

In stark contrast to the pain inflicted on investment banking shareholders, ICAP’s shares rose nearly 20% last week after it predicted double digit revenue growth and said the interdealer broking (IDB) industry will “continue to display strong structural growth” of around 10% a year.

Tej Dhindsa, a broking specialist at recruitment firm Ingram Mayet, says interdealer brokers are particularly interested in hiring investment banking sales traders with a strong client base: “They’re looking for people who can bring in 1m a year in revenues.”

Damien Lee, managing director of IDB recruiters Search Partners, confirms the enthusiasm for ex-banking talent: “Good interdealer brokers are now locked in for three years, so we’ve been looking at people coming out of the likes of Bear Stearns and UBS instead.”

ICAP hired three senior traders from Citigroup in February and is said to have hired from ABN recently. Recruiters say Tullett Prebon has hired out of Credit Suisse.

Lee says the most popular ex-banking candidates are equity sales traders who’ve been working with hedge fund clients: “A guy who’s been speaking to 20 hedge fund clients will have a much greater chance of moving his clients across than a guy who’s been working with institutional accounts.”

Earn 400k+

With discretionary investment banking bonuses on the wane, Lee says interdealer brokers’ commission-based compensation models are increasingly appealing.

“A typical interdealer broker will pay 30% to 50% of the revenues an individual brings in as a bonus,” says Lee. “But some smaller firms will pay as much as 70% – particularly in equity derivatives.”

For bonus-calculation purposes, revenues are calculated on the basis of business brought in, minus an individual’s salary and national insurance, travel and entertainment costs, and the cost of their Bloomberg or Reuters terminal.

Once all these costs are deducted from revenues, a bonus of 50% of total revenues is likely to come in around the 43% mark. Bonuses are paid quarterly rather than annually.

The only downside to seeking refuge in an interdealer broking firm is that it’s likely to be even less tolerant of poor performance than investment banks are: “Banks will at least try to move you into another area. But brokers are ruthless – if you don’t perform you’re out,” Dhindsa says.

Comments (21)

  1. are there any junior opportunities at any of these firms(particularly BGC) or is it a waste of time without having a transferrable client list???

  2. Mr Tej Dhindsa how can I contact you? I have several vacancies and need good sales traders with strong client base, what is the best way to contact you?

  3. The last paragraph seems to not bode well for entries??

  4. I am interested in that. could you provide a list of the best interdealer brokers?

  5. The top five interdealer brokers are:
    ICAP, Tullet Prebon, BGC/eSpeed, Tradition and GFI
    Hope this helps,

    Paul, eFinancial Careers Reply
  6. can somebody please recommend a course(s) for anybody who’s interested in starting a career in broking? Thanks in advance – Dan

  7. Good luck radio 1! If you don’t know who the top 5 are, you won’t get a job there – even as a jub! ps. Jubs generally earn 12-20k. Not bad for getting the lunches in!

  8. Some of these firms have their own graduate programme, which actually means they’ll take anyone up to 5yrs experience. It takes a certain character to work there, and the weak gets weeded out fairly rapidly. Icap is the largest, then Tullett, followed by Tradition, BGC, GFI…and many other smaller broking institutions, often specialised in a certain area/product/geography. The primary reason the big firms are interested in a HF client list is because they are the ones that generate the most volumes @ high margins.

  9. Any of you budding brokers coming to Hong Kong. Thats the new gold rush town.

  10. how can i find a job in the banking sector or any financial institution oversees and if possible scholar ship to study overseas

  11. I work for an IDB firm, there is no way you would get 50% of the revenues you bring in, and i’m with the top 5.

    this wall is a joke!!

    and far as tej from ingram mayet goes, your just having a laugh

  12. Hi, Rob, could you kindly explain us what is it like, the career perspective of a broker working in HK? Thanks

  13. Hi John Smith,
    How can I contact you? I’m currently working in Audit “Big four” and I can’t wait to go out there and work on a client facing role that involves sales (as it is my background) where I can actually see the results of my efforts straight away .. I love adrenaline!!!

  14. what is an interdealer broker? sounds a british thing.

  15. re Margin!!
    Your comments regarding recruiters, are doubtless correct. Like most in their field, they are doubtless full of it.

  16. “A guy who has been speaking to 20 hedge fund clients” – are you mad or just inexperienced !!

  17. 43% ???…after all the entertainment expenses (which amounts to bucket loads in IDB), i doubt bonusesare that high…

  18. Firstly, at IDB’s increasingly the payout structure is giving way to discretionary bonus structures just like at I.Banking. Second, having worked for both types of companies IDB and I.banks I would chose I.Banks always. IDB’s are run like private kingdoms where you never know where you stand, suffice to see the contracts they will make you sign which always include ridiculously long non-compete terms and financial penalties in case you chose to leave so in effect they hire you on the cheap and the contract prevents you from moving somewhere else when the going gets good. You have been warned.

  19. How should I proceed? I’ve been trying to get into inter dealer broking for a while now with not much luck.

  20. Margin!!
    you can t be a very good broker then

  21. Read an article “Essex and the City: my life as a ‘posh bird’ broker” that came out in the Spectator – fairly accurate reflection of the industry.

    For the people on this board asking about courses and ideas how to get into an IDB, you aren’t cut out for it – a lot of the guys are loud-mouthed and competitive and rely more on their common sense than education. Business is based purely on sales and quotes – there’s no glorious 6 month pitches and projects here. You’ve got it or you don’t.

    As for this site in general, unless someone posts their P60 on this board, take bonus quotes with a fistful of salt. Recruitment consultants will tell you anything to apply for a job; the editorial staff here buy it.

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