The start of 2016 has not been good for most financial services professionals and as the bears emerge it's easy to believe that the picture is bleak for most people working in the sector.
However, speaking purely statistically, it's not so bad. Here are some highlights from the Securities Industry and Financial Markets Association (SIFMA) 2015 Factbook that matter to financial services professionals:
1. U.S. securities industry employment has been heading up
The U.S. Department of Labor reported that the securities industry employment reached 888,600 nationwide in December 2014, a 1.8% year-over-year increase, which followed a 1.7% increase in 2013. In comparison, the industry comprised 852,700 jobs in 2010.
2. Wall Street still has the most finance jobs, but other parts of the country are slowly gaining ground
New York State was home to 189,100 securities industry jobs in 2014, a modest 0.8% year-over-year increase, which followed a relatively stagnant 0.1% increase in 2013, according to the DOL’s Bureau of Labor Statistics. New York State represented 21.3% of the securities industry jobs nationwide in 2014, down from 23.4% of the U.S. total in 2007.
That’s a sign of a gradually accelerating growth pattern for finance jobs in other parts of the country. For example, in 2014 California had the most registered investment advisers (RIAs) – 4,655 – in the U.S., compared to 3,402 RIAs in New York State in second.
But if you want to work for an investment bank, New York City is the place to be. It had 168,600 securities industry jobs in 2014, a 1.0% year-over-year increase. The city represented 89.2% of New York State's securities industries jobs, down from 91.2% in 2003. That’s a sign more finance jobs are slowly trickling upstate and to Long Island.
3. Surviving U.S. broker-dealers are doing alright
The number of U.S. broker-dealers that report to the Financial Industry Regulatory Authority (FINRA) decreased from 4,610 in 2010 to 4,156 in 2014, according to SIFMA DataBank. However, the number of FINRA-registered representatives – 637 – stayed stable (there were 636 in 2013), down only slightly from 673 in 2007.
Pre-tax net income for all broker-dealers doing public business in the U.S. grew to $27bn of profits in 2014, up from $26.3bn in 2013, representing an increase of 2.6%. U.S. B-Ds’ revenues totaled $275bn in 2014, a 4% year-over-year increase, although total expenses also grew to $247.9bn, a rise of 4.1%.
4. Wall Street compensation is trending up
The New York finance industry added 2,300 jobs in 2014, according to the New York State Comptroller’s October 2015 report. This was the positive year since 2011, and job growth accelerated during the first eight months of 2015. That has gone hand-in-hand with pay raises.
While there is currently widespread fear and pessimism about this year's bonuses, the average compensation package on Wall Street – salary plus bonus – reached $405k (£266k) in 2014, as high as it was in 2007.
5. Despite challenges and setbacks, U.S. banks keep on doing what they do best
U.S. banks’ revenue from investment banking services – including loans, mergers and acquisitions, and equity and debt capital markets – went down 1.6% in 2014, the first decrease in five years, which followed an 18.7% year-over-year increase in 2013, according to SIFMA.
However, M&A revenue bounced back in a big way in 2015.
In 2014, the U.S. securities industry raised $2.2 trillion of corporate capital for U.S. businesses through debt and equity issuance, per SIFMA.
Initial public offering volume reached $94.2bn in 2014, the highest volume on record, according to SIFMA.
All in all, it still feels good to be a banker – and more generally, a financial services professional – in the U.S. However, if the global stock-market rout continues, then all bets are off.
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