There’s only so much I can take. After a decade as an equities trader at some of the world’s biggest investment banks, I’m now out of the market – again. And this time, I’m not even trying to go back.
If you work in sales and trading, my career trajectory will probably sound pretty familiar. It all started incredibly well: I joined a big bank soon after leaving university and was given fast promotion so that I was managing a big trading book and heading a desk soon after leaving university. The first six years were great, the last four years were much harder.
Since reaching VP, I’ve had three different jobs in as many years. I know what you’re thinking, but it’s not me: it’s the market. I’m far from the only one among my peers with this experience.
The banking industry faces big structural issues. In the past ten years, equities trading has transformed beyond recognition. As Accenture reported last year, equities trading commissions are being driven to zero by the electronification of equities trading. In Europe, MiFID II legislation is encouraging a shift to execution only platforms. As Dixit Joshi, a former equities trader and head of fixed income sales and clearing at Deutsche Bank, said last week, this means trading liquid products like equities is no longer where the money is: banks that remain in the market have to provide the platforms, but they’ll employ as few traders as possible.
This means a lot of instability for an experienced, mid-ranking trader like me. Some banks have already closed their equities businesses. Others are pulling back. Either way, people are worried that this is no longer a job with a future.
It’s a shame: I enjoy sales and trading but there’s no visibility in this career. I’ve found that my skills are only transferable to other players which are prone to exactly the same problems experienced by the firm’s I’ve left. I’ve tested the market and tested the market, but like a lot of other people I find myself moving from one bank to another, only to come up against the same problem.
So, now I’m getting out. I’m thinking of doing something completely different – although I don’t yet know what. My instinct is that a lot of people who’ve come out of finance are going to need help managing their money in the next few years. Personally, I’ve learned a great deal in finance but I have 25 years’ of hard work left in me and I want to invest that in the right place. Equity trading doesn’t offer upside any more. It’s time to cut the trade and move on.
Lawrence Smith is the pseudonym of a VP level equities trader in London