Fixed-income is an area where there are a host of open courses on offer. Yet one investment bank with a sound reputation in this area, Bankers Trust, has chosen to be innovative in its approach to open course versus in-house training.
Bankers Trust takes its pick. Not only does it take up open course places and use freelance trainers to come in-house and tailor courses to its needs, but it has launched a junior management programme that involves an internal and an external trainer, sharing both delivery and design responsibilities.
Tim Last, learning and development manager at Bankers Trust, describes City financial training as ‘an overpopulated marketplace. While there are many in the City who are traders by day and trainers by night, it is not always a useful model. For fully effective programmes, you need commitment to the training job for the administration and the follow-up work that is necessary.’
Bankers Trust admits to a great deal of outsourcing, with a majority of its training programmes put out to external providers or to others within the organisation. Just as internal appraisal techniques have evolved from the 360-degree evaluation and feedback to the consideration of an even more extreme 450-degree evaluation – with the additional 90% involving going outside the organisation for evaluation – so, too, innovative techniques are used for internal training.
The design of training courses specifically for investment banks is the kind of work many trainers long for, although the desperate need for confidentiality within the banking industry tends to make external involvement an all-or-nothing affair.
At some of the small financial training companies which offer both tailor-made training and open courses, individual freelance trainers have broad experiences of the market as a whole. Euromarket Trading Consultants is one such company.
ETF is run by Valerie Thompson, who spent 14 years at Salomon Brothers, culminating as head of fixed income credit trading and head of debt syndicate. Along with Louisa Martinez, also from Salomon, and Alan McDougall, who has over 20 years experience in the capital markets, both as a trader and a trainer, Thompson founded ETF over 10 years ago to provide capital markets training, headhunting and consulting services to a broad range of institutional clients.
‘The issue for investment banks now is not whether you use trainers, but how you use them in terms of outsourcing’ says McDougall. ‘In the past, it was usual to drive the trainers down on price, with banks arguing either that they did not use external trainers at all or that they did very rarely at a knock-down price. Now they are brought in very much as professionals for a specific job’ he adds.
ETF indirectly sells open course training through IFR Publishing, which uses its magazine to good effect in direct mail and marketing of training courses, and its training company IFR Seminars. This has apparently been used by bulge-bracket banks such as Goldman Sachs and Morgan Stanley.
In fixed-income, ETF has provided IFR with two open courses in bond maths, which is aimed at traders, and advanced bond trading techniques, which is aimed at sales people.
Other, larger providers of training courses such as IFF Banking, offer a variety of choices to investment banks. IFF Banking offers a three-day course in bonds and fixed-income for those who are new to the market, starting from a basic look at the UK, European and US bond markets. The maths underlying bonds, how to price them and how to incorporate them into a fund manager’s portfolio are the sorts of topics covered.
Among more than 40 training courses offered two or three times a year, IFF Banking has also launched EMU redenomination of bonds courses which are designed to look at the impact of the single currency on bond markets. Interest rate swaps, credit derivatives, and credit analysis courses are also available.
IFF maintains that the demand for open courses remains high. Course producer Tracy Shand claims that the reason the company does not publish the names of freelance trainers hired to deliver a particular course is because of the fear of poaching within an extremely competitive industry. Its policy has, however, caused it to lose trainers, such as Alison Brooks, now of Fintuition.
More cynically, however, some industry observers cite instances of courses being advertised that do not run, and probably were never intended to. But they are part and parcel of the direct mail marketing battle in financial training, as they attract attention and help to compile mailing lists.
IFF also does in-house training, although it has so far not managed to achieve its ideal 50-50 split between in-house training and open course provision as the mainstay of its business.
Another similar provider of training in fixed-income markets is BPP Training and Consultancy. Many of those attending its courses are drawn from IT companies and consultancies specialising in the implementation of risk control systems to manage today’s more complex bond and derivative products, according to Rodney Fetzer, its head of markets.
‘We’ve got a bit more depth than a one-man band,’ says Fetzer, who claims BPP may be unique in its provision of one-to-one training for senior people who need updates on risk management in trading.
BPP’s open courses include a two-day introduction to bond markets, a three-day course on the impact of EMU on financial markets, and (at 3,250) a 10-day course on global trading and capital markets.