These are barren times for those who work in financial services. Low-hanging peaches on the finance-careers-bush were mostly blown off during the financial crisis and its aftermath. If you want a juicy finance job now, you’ll probably have to scale a long ladder to get it and when you do, you may well find that it was replaced by an automated system just prior to your arrival.
“If you want to get paid handsomely for not doing a lot, don’t come and work for an investment bank,” says Jonathan Nicholson, managing director at London-based recruitment firm Astbury Marsden. “No one is earning £200k in banking now without putting big effort in,” Nicholson adds. “People in banks have been asked to do more with less – less resource, less headcount and less budget. This applies to almost every organization and every function – it’s equally the case in regulation and risk, those guys are also stretched to breaking point.”
“Bank staff are being nailed to the floors,” proclaims another recruiter, speaking on condition of utmost anonymity. He says that even the highly-paid havens previously favored by working parents and job sharers (product-focused chief operating officer (COO) positions) have become a hard slog: “Most COOs are easily earning £200k, but they’re at the forefront of automation and change. They’re working harder than ever before.”
Where does this leave the ambitious but judicious finance professional? If you don’t intend to submit to the tyranny of the 70 hour week, you can still try:
1. Programming for high frequency trading firms
Successful HFT firms can pay well. As we reported in April, Jump Trading, a Chicago-based HFT firm with offices in Chicago, Hong Kong, New York and Singapore, paid each member of its UK staff an average of £550k ($925k) last year. Junior algorithm developers can reportedly earn up to £172k ($291k) two years out of university, with pay rising rapidly thereafter. Even better, the culture in HFT firms can be far less intense than in banks. “Some of these places are very relaxed,” says one recruiter, speaking on condition of anonymity as HFT firms are also very secretive. “They’re more like tech start-ups. People work hard and are paid well, but it’s not like they’re in suits and working 7am to 9pm.”
James Kennedy, head of the trading and quant practice at NJF Search, says some high frequency trading firms situate teams of researchers in desirable spots like the South of France, Malaysia and (less appealingly) Thailand.
Many HFTs will pay a cut of their profits, says Kennedy. But making money there is less easy than it used to be. The sector is becoming overcrowded. Profits are falling and regulation is rising. “You used to be able to print money in high frequency trading,” says Kennedy. “It’s much tougher these days, but you can still earn several hundreds of thousands of pounds.”
Finding a highly paid easy job at an HFT can be a challenge, however. Many are small and incredibly secretive. They like to recruit directly from among their own networks. Sometimes the founders will simply call their former university professors and ask to be connected to the smartest students. Fortunately, we have an (old) list of the top high frequency trading firms here.
2. Selling trading strategies to hedge funds
According to Paul Tudor Jones, life has never been harder for people working in macro hedge funds. Low volatility and static interest rates are killing profits, This might be why macro funds are increasingly prepared to pay good money to people with novel trading ideas.
“Hedge funds are employing people who can provide strategy ideas on a consultancy basis,” says David Durham at hedge fund search firm Durham Consultants. “You get these guys who are consultants based in the South of France or somewhere and they sell their ideas to funds in New York or London for £30k ($50k) each. Once you’ve got a dozen hedge funds buying your trade ideas, you’re doing pretty well.”
Consultants have a comparatively nice life, says Durham. “They’re changing their strategies on an hourly or daily basis, but they don’t have hassle of running real money. Sometimes their clients will use their ideas, sometimes they won’t. It works well both ways – the fund gets ideas but doesn’t have to put money behind the guy. They guy gets to base himself wherever he wants.”
Strategy punts aren’t restricted to macro funds, but they seem to be among the biggest buyers. The rise of the freelance strategist is a recent-ish phenomenon allied to the rise of mega hedge funds, says Durham. “This has been happening since 2010,” he says. “There are fewer hedge funds to work for now, and big funds have started buying in ideas rather than hiring and putting $50m behind someone.”
If you want to sell your strategy while relaxing on the Med you should contact funds directly, says Durham. Clearly you will need a track record and an original idea to be at all credible.
3. Senior actuary
You can’t simply swap into being an actuary. It takes between three and six years of studying. This is a great shame because actuarial jobs crop up on every list of highly paid careers that won’t leave you on the floor. 50 hour work weeks are allegedly rare. Demanding weekend calls with clients are off the radar.
You won’t necessarily earn £250k as an actuary, however. The UK Institute and Faculty of Actuaries says that a mere ‘actuary’ earns £47k. An ‘actuarial function head’ earns £108k. Only the chief actuary will earn in excess of £221k. And by all accounts, being an actuary can be rather boring.