Some people want to climb mountains or fly planes, but for as long as I can remember my dream was always to work in equities trading. To my naive teenage self, equities trading seemed like a job where you got to stand at the centre of markets whilst earning a packet of money and respect for being good at what you did.
Turns out I was horribly wrong.
Trading floors are aggressive competitive places. Sometimes the aggression comes from the traders on your own floor – as at Barclays where trader Peter Johnson was accused of humiliating his 23 year-old assistant. Sometimes the aggression and abuse comes from your clients.
I wanted to work for a bank, but I didn’t get in straight out of university. Instead, like a lot of other people, I started out working for a financial software provider on the client support desk. I had two weeks of training and then I was told to start picking up the phone.
When the first call came I was pretty nervous. I picked up, ready with the spiel I’d been trained to say, but I had no chance to talk. An angry trader was shouting at me. “I can’t $%^#^ trade, fix it now!.” Before I had a chance to respond, he’d hung up. The call was recorded, so I played it back to my manager. She listened and she told me to toughen up: in this industry, you need to be thick skinned.
That client turned out to be the head trader at a large London-based hedge fund. He’d worked on the sell-side prior to making the move and had become one of the biggest commission-payers on the street. He was unleashing years of frustration at being mistreated when he was a broker, and he knew that he had no need to be polite. There were plenty of others like him; I was in that job four years and I got to know them all.
Ultimately, I moved into a sales role with a major U.S. bank. You might’ve thought things would be better here. They are, and they aren’t. 95% of my clients fall into the “good” category, but the 5% who fall into the bad and the ugly are enough to change the whole tone of the job. Some of the recent highlights include a call from a trader saying, “Hey, I want to reduce the commission rates because I feel like it,” or another trader who said he knows what it costs us to trade a specific market and he’d like to reduce the rate to cost. Right: and how are we supposed to pay for electricity, technology and salaries?
When you’re a broker on the sell-side you just have to lap this stuff up. You can’t object when buy-side traders shout at you, when they criticize you, or demand that they pay nothing for your services. Ironically, these guys are just dogsbodies themselves. It’s the portfolio managers who come up with the actual trading ideas: all the buy-side trader does is take that idea and send it to the broker. The more idiotic among them get a kick from their moment of power.
I’d like to hope that this kind of behaviour won’t last. Now that calls are monitored more closely, buy-side firms can easily track the perpetrators and there are plenty of professional people who could replace them. Still, not all buy-side firms are bothered about behaviour – a lot of hedge funds are focused mostly on P&L.
Because of this, buy-side traders still have power,. And some abuse it. I’ve seen situations where sell-side brokers are promoted simply because a client says they should be. Good salespeople are overlooked as a result. I’ve also seen situations were very professional sell-side employees have lost their jobs simply because a buy-side trader with influence took a disliking to them. So, if you want to work as a salesperson on the sell-side, go ahead. But be prepared to grovel and crawl around clients who’d just as soon kick you in the teeth and insist that both you and your employer are offering a worthless service. Consider yourself warned.
Aaqil Jalali is the pseudonym of an electronic trading salesman who’s worked for major U.S. banks in London.