Get real: you can’t earn good money in banking any more
After nearly three decades in trading I've given up. I've left finance completely: there are no jobs for someone like me any more.
I'm being realistic, but I know a lot of people who aren't. Most of my old colleagues are out of the market like me and are being told by headhunters to wait until the first quarter of next year - after Brexit and the U.K. election, as if this will make all the difference. As if there's going to be some rush of hiring in 2020. There is not.
Our jobs are not coming back, and no one is going to get employed on their previous pay. Everything is being done by computers now. A fund manager can effectively “Ask Alexa” to buy and sell shares and no dealer or trader is even needed. I have 40+ relationships with some of the world’s biggest pension funds and asset managers, but why trade through me when I cost 5-7bps and you can pay 1bps on a machine? There’s nothing left to do if you’re a real trader.
Does this grate? Yes, it does. I took a lot of exams to become regulated but anyone can play the markets now: a computer needs no qualifications and active management is dead. When I began my career there were 125 traders on the floor, now there are almost none of us left. Livelihoods have been destroyed and there is no safety net.
High salaries have made things worse. In the past, high pay was all about risk taking. You got good basic, but most of your compensation was made up of a bonus. In a good year, your bonus was great. In a bad year, it was not so good. European regulators forced-up salaries and forced down bonuses and now the only way for banks to be profitable again is to cut human capital and shrink their cost base.
So, if you’re waiting for the 2020 jobs rush – get real. It won’t happen. There is no risk-taking by humans any more and you’re not worth that salary now. Banking is no longer a people business and even hedge funds can’t make returns.
I always thought I’d be ok if I specialized, but that’s no longer the case. Banking has changed: it’s time to broaden your horizons. Yes, there will be some short term pain, but you need to admit defeat and reset your career. The sooner you accept this, the better-off you’ll be in the long run.
Keith Williams is the pseudonym of one of the most senior (ex)-equities traders in London
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