Is it possible to reinvent yourself in a financial services job market still recovering from the financial crisis? Certainly a move from a back office position into a revenue-generating role now seems beyond the realms of possibility, but career consultants and recruiters suggest that those in shaky parts of the business are still succeeding in transitioning their career. Here are the top-eight moves.
Traders, faced with ever-shrinking employment options are not simply trying to move into a hedge fund, but reinvent themselves as portfolio managers in institutional asset managers, says Victoria McLean, managing director of careers consultants City CV. Similarly, those on the sales side of the business are looking to the buy-side, but to business development and relationship management roles in wealth management, she says.
McLean says that gravitating into portfolio management is less about highlighting your PnL, as is often the case when moving into another sell-side trading role, and more about showing your technical prowess. Highlight your skills as a stock-picker; someone able to see the long-term potential of a particular company rather than a short-term upside. In short, she says, traders are putting forward their ability to think strategically over a capacity to act decisively and cope under pressure.
For sales staff wanting to move across to wealth management, it’s about proving your “client centricity”, says McLean. Considering good relationship managers often advise clients on much more than their investments, being seen to provide exemplary client service is the key to being considered, she says.
Equity research has not only become less exciting, it’s also increasingly perilous as investment banks struggle to monetise it and cut back their analyst headcount. Not surprisingly, an increasing number have been looking to the buy-side, to the point where banks are becoming concerned about a skills-shortage.
Buy-side research is less about feeding the investment banks’ sales team leads, or introducing clients to executives in the companies you cover, and more about idea generation for portfolio managers. “To be honest, most analysts are a little sick of the client focus and want to focus purely on the research,” says one equity research headhunter, who declined to be named.
“You need to highlight the originality of your research ideas, the in-depth nature of your research and ability to think outside the box,” says McLean. “This is a different mindset from the client-focused nature of the sell-side.”
Switching from the sell-side to private equity is a well-trodden path, but there are a few caveats that anyone looking to make the move currently needs to consider. Firstly, it’s very unlikely that you’ll be considered beyond the associate level in investment banking – there’s a battle for talent at this level, but it is very difficult to change careers beyond this point, says Gail McManus, managing director of Private Equity Recruitment.
Secondly, anyone with experience of leveraged finance, project finance or energy-related infrastructure projects is more likely to be considered than those with generic M&A knowledge, she says. More generally, however, the differentiating factor is the elusive “buy-side mentality”, which will set you apart from your competitors.
“Once you have the right technical background, firms are looking for people who can see a transaction from a buyer’s perspective – it’s not just about making money, but not losing money,” she says. “The critical business drivers, long-term upside and a commercial mentality – all these set candidates apart.”
Investment banking operations hasn’t been a particularly safe vocation for some time now, as firms embrace nearshore and offshore solutions to cut costs. However, rather than make the move to theses cheaper locations, an increasing number of operations professionals are offering their services to business process outsourcing providers on a contract basis, says Mike Hartwell, managing director of operations-focused recruiters Hartwell Buck. Think the likes of JDX Consulting or Capco, for example.
“This is not the sort of drag-and-drop solution offered to banks to carry out operation functions by some of the larger consultancies, but a crash team brought in to sort out a problem,” says Hartwell. “A number of operations specialists with experience of change management are taking this route.”
There are examples of senior traders making the transition into the decidedly safer option of risk management. Guillaume Huteau, who was head of FX options trading at Bank of America Merrill Lynch, switched to become chief risk officer at Citadel’s European operation in March. Such high-level moves are, unfortunately, all too rare, says Edward Manson, director of risk and compliance recruiters Merje.
“There’s an increasing appetite to move from the front office into risk management roles, and the product knowledge of sales and trading professionals is a big plus,” he says. “However, for every 20 CVs on hiring manager’s desk, 19 will have specific risk experience. This means traders have to accept more junior positions – often at a much lower salary."
If you’ve made it to a chief operating officer position or a ‘business manager’ leading the operational side of particular divisions, the new thing is to reinvent yourself as a regulatory advisory expert, says McLean. Leveraging experience developing regulatory control for a particular function and adhering to the expectations of regulators is the way to ensure you’re in demand in the future, she says.
“Being at the forefront of this process, making sure that the new rules are adhered to and taking control of regulatory demands is what many business managers are doing to kick-start their career currently,” she says.
Prop traders are, of course, queuing up to get into hedge funds in the wake of the Dood-Frank act that has forced most investment banks to curb the practices. Some are going it alone, while others are having to convince picky hedge funds that they have the right stuff. The current perception, says Anthony Keizner, managing director of headhunters Glocap, is that "the best traders have already made the jump to the buy-side". So, what qualities - aside from the necessary track record - can you highlight?
"The biggest challenge for prop traders trying to move to the buyside is whether their success to date can be replicated," he says. "To help demonstrate this the traders should focus on their investment process, ideally highlighting how their method to generate profitable trades is not dependent upon the large teams, deep resources and significant corporate access commonly found at the big banks."
As unconventional as it sounds, the investor relations space is not just attracting equity researchers, but more recently has been a career option for those on the investment banking sales desks, suggests McManus. "It tends to suit those who enjoy managing the relationship side of the business, but who also have the technical expertise to crunch the numbers and explain them to investors in an easily digestible fashion. This makes the sales teams ideal," he says.