Morning Coffee: The biggest bonus battle of 2021. The hypothetical alternative to having a job
It's a long time ago now, but some of you may remember the aftermath of Barclays' acquisition of Lehman Brothers and the angst that ensued. It wasn't just that a British universal bank had absorbed a rollicking American investment bank, or that Lehman's puffed-up people were in an inferior position after sustaining a blow to their egos - it was the sales credits. - Whose were they? When a Barclays' salesperson in London and a Lehman salesperson in New York worked with the same clients, who got the recognition at bonus time?
The obvious answer is that both shared in the glory. This is what happens in most international sales teams, but the initial process at Barclays/Lehman was prickly as bankers used to owning clients for themselves adapted to working with new colleagues who thought they owned them too.
Brexit isn't about entirely new colleagues, but it does seem to be creating similar issues. Now that London-based bankers can't serve European clients after Brexit, Financial News says that some are infuriated by the need to sacrifice long-cultivated clients to European colleagues. “I discovered the client. I put in all the work, and now I’m expected to just hand them over to someone else?” complained one senior banker. Another said that although he can still talk to his established clients, he now has to allow a colleague in Europe to actually execute the trades. That European colleague lacked the "finesse" required to understand the nuances of the relationship, he complained.
At other banks, 'EU chaperones' are simply sitting-in on calls while London-based salespeople go about their business with EU clients as usual. This - predictably - appears to be the preferred model for London salespeople, such that banks following the chaperone model (if regulators tolerate it) are likely to become preferred employers.
Ultimately, though, much will depend upon the dreaded sales credits. Some banks are already making changes to compensation arrangements, said Dr. Michael Huertas, the Frankfurt-based co-head of the European regulatory practice for financial institutions at law firm Dentons. Those who get it right will foster collaboration between London and EU teams, he told Financial News. Those who get it wrong will set up a big battle for bonuses at the end of this year.
Separately, why are you at work? According to a viral video posted by a young couple who have now had nearly 2m views on Tiktok, working is for losers who waste their lives in a "9-5 job" rather than focusing on things they "actually enjoy doing." If you want a life of enjoyment, all you need to do is to trade stocks on Robinhood say the sybarites. "Here's my strategy in a nutshell," says the guy: "I see a stock going up and I buy it and I just watch it until it stops going up, and then I sell it, and it pays for our whole lifestyle." In this way, he says he turned $400 into $14k one month and $1k into $20k the next. "Why did I go to business school when I could have just watched this minute-long TikTok," says one response on Twitter. "What could possibly go wrong?" says another.
Cantor Fitzgerald has been building out its European equities business under ex-Goldman Sachs MD Talat Khan. It's hired across program trading, block trading, Stoxx 600 equities, investment trusts, AIM-listed stocks, privates, ADRS and GDRs, US electronic and high-touch trading, equity capital markets distribution and event-driven strategies, and it's recruiting still - particularly in the cross-asset group and private market offering. (The Trade News)
Chief diversity officer is a career dead end. The average tenure is only three years, and they're often lumped-in with HR which can make it difficult to move onto anything else. (Bloomberg)
London's Mayor says the City has been through a no-deal Brexit as a result of antipathy to the “metropolitan liberal elite” and ongoing dislike of the finance sector. 'Financial services are also crucial to serving the wider economy and they contribute billions in tax revenues to the Treasury every year, which goes towards funding public services in every village, town and city across the country.' (Financial Times)
The new ideal banker in London will be one with a European passport, who can travel in and out of the European Union without having to deal with all the new bureaucracy surrounding paid work in the EU. (Financial Times)
The European Central Bank is clamping down on leveraged loans. It's planning more frequent virtual visits to evaluate banks’ risk management procedures and to adjust their capital requirements. (Financial Times)
HSBC's chairman Mark Tucker says the bank is accelerating its hiring plans."We are accelerating the plan by confirming areas of focus for the bank, especially in Asia where we see real opportunities to grow our wealth business and expand across South Asia.” Tucker said he sees “substantial opportunities” in areas like Hong Kong. (Bloomberg)
It's a boom year for China's healthcare bankers. (South China Morning Post)
Point72 is also moving to Florida. It will open an office at 360 Rosemary in West Palm Beach before the end of June. (Bloomberg)
People in white collar jobs deny their privilege and consider themselves working class by virtue of their parents' or grandparents' impoverishment. "I hate the idea that people might look at you and go well you’re quite privileged, from a middle-class background, and ‘oh, of course, haven’t you done well?’. And I have, to a certain extent, because my parents did help me out at the start with rent and stuff. But. . . but they sort of killed themselves to do that." (Sage Journals)
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