Equities sales and trading roles are fast disappearing from many Western banks in Asia, with Hong Kong the worst affected city.
Deutsche Bank made redundancies in its Asian equities team just last month, while Credit Suisse culled dozens from its regional equities operations last year after a slump in revenues. Barclays, along with several other banks, cut jobs in 2016.
If you’ve been laid off from an equities role at one of these firms, it will be exceedingly tough to get a similar job at another large bank. But you need not stay unemployed for long. Here are some alternative careers for ex-bank equities professionals in Asia.
1. Chinese banks
Chinese banks are staffing up their sales and trading teams as Western firms continue to cut back. As we reported earlier this month, Kenneth Taheny, Societe Generale’s former head of Asia Pacific cash equity sales trading, has resurfaced at ICBC International in Hong Kong. His move follows that of Rachel Chan, a China-focused institutional equity sales specialist who joined ICBC in Hong Kong from Agricultural Bank of China earlier this year as an executive director.
2. Goldman Sachs
A potential, if limited, exception to the trend of Western banks cutting traders in Hong Kong. As we noted yesterday, Goldman's most recent Hong Kong recruits include Dennis Cheng, a portfolio sales trader who was a VP at Deutsche and has just joined Goldman as an executive director.
3. Online research firms
“With the unbundling of investment research, I see opportunities at online research marketplaces,” says Yvette Kwan, a former APAC investment banking COO at UBS, now a partner at Hong Kong finance consultancy Quinlan & Associates. “Working for an ORM offers an interesting option in a newly developing space and leverages your existing relationships with the buy-side.”
4. Wealth management
“Products sales in wealth management is an area where ex-sales and trading staff in Asia could find a new home. They bring a deeper level of product knowledge to the table as wealth management in the region continues to expand and become more sophisticated,” says Kwan.
5. Hedge funds
“I know ex-sales and trading people in Asia who’ve left bulge bracket firms in the last 12 months and are in the process of setting up their own funds, utilising their personal and professional networks to source investors,” says Kwan. “But this option is generally only open to very senior traders with deep pockets and industry ties.”
6. Fintech start-ups
“Sales and trading experience is well received in fintech because start-ups operate in a fast-moving, high-pressure, and performance-driven environment,” says Sonia Palmieri, a former structured products specialist at Credit Suisse, now head of business development at Singapore-based research website Smartkarma. “Their international networks and knowledge of financial markets can’t be replicated by their technology-focused colleagues.”
7. Quant trading
Traders who can also program could be considered for automated or quant trading roles. “The need for traders with skills in signal development, coding and programming in languages like C++ or MATLAB has not gone away,” says Ed Goh, a principal consultant in sales and trading at recruiters Selby Jennings in Singapore. “These technical roles require serious quantitative skills, but boutique shops often offer negotiable profit-share schemes, so there’s a high potential upside.”
8. Electronic execution desks
“Cash equity sales traders who have covered fund managers and are experienced in handing direct-market-access or algorithmic trades could apply to banks whose electronic execution desks also value high-touch client servicing,” says Goh. “Compensation on these desks doesn’t vary too much from the traditional sales and trading teams.”
If you want to stay in banking and don’t mind a dramatic career change then risk is a viable option, albeit one that comes with a pay cut. “Risk, particularly market risk, is a common path for traders now, as is market surveillance,” says ex-Jefferies trader Warwick Pearmund, now an associate director at Pure Search in Hong Kong. “Risk teams value people who know how trading works and can understand trading logs and charts to dig out discrepancies or potential failures. This skill is harder to teach someone who hasn’t experienced trading first hand.”
10. Ship broking
“Hong Kong has a vibrant shipping business and some of the same fundamental trading skills apply: matching buyers and sellers,” says Neil MacKinnon, an equities consultant at Hong Kong search firm The Lawson Practice and a former salesperson at CIMB Securities. “And it’s a business based on personal relationships, similarly to sales trading. The compensation might not always match equities, but there’s real potential to be paid more.”
11. Custody sales
Equities professionals in Hong Kong could put their sales skills to use in other industries or other parts of the finance sector. “For example, while it would require some training on product knowledge, you could move into custody sales at banks and securities houses such as State Street, Wells Fargo, Citi, and J.P. Morgan,” says Mackinnon.
12. And there’s always…headhunting
“Former traders sometimes make good recruitment people, but this is very much on a case-by-case basis,” says Hong Kong trader-turned headhunter Matt Hoyle.
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