Exit options for investment banking sales staff as cuts take hold
It’s not just traders who are facing the axe as automation and restructuring in investment banking takes hold. With banks pulling out of certain business areas, or deciding to focus on big clients who can provide large and diverse revenue streams, sales staff are being forced to look for other opportunities.
It is of course still possible for investment banking salespeople to move to a new firm, or perhaps look to move from a markets position into IBD, but it’s worth knowing what exit options are available should they decide to make a switch.
In general, investment bankers will take one of three paths when cuts happen, according to Gloria Mirrione, the vertical leader of financial services for Futurestep in North America at Korn Ferry:
- They'll stay in investment banking, but they'll move to smaller boutiques.
- They'll move to the buy side – sometimes private equity, but rarely hedge funds.
- They'll move to corporate development or advisory roles, often to assist with M&A ventures.
- Finally, some re-invent themselves in the financial services world and go into wealth management or corporate/commercial banking.
“The key is to stay networked inside and outside their company so options are open when or if it's time to make a change,” Mirrione said.
The boutique generalist
Large investment banks give sales staff the opportunity to specialize. It’s a perfectly acceptable to spend your professional career selling, say, rates on a large trading floor. If you want to move outside of a big employer, your options are more limited.
Douglas Rickart, vice president and senior recruiting manager at Robert Half, says that salespeople are able to transition into a business development or product management position at a boutique, where bulge-bracket bank experience may open doors.
“They can take their sales background and the connections they have out on the street to develop effective products for the institutional side of the business,” Rickart said.
The move to the buy-side
Investment banks’ traders have long been a magnet for hedge funds and private equity firms – and to a lesser extent mutual funds and registered investment advisers (RIAs) – but it’s also an exit option for sales staff in the current climate.
“It could make sense to look at a buy-side sales role, for example, RIA firms that cater to high-net-worth individuals, or multiple family offices,” Rickart says. “They could move to a relationship management role, managing client relationships with a large RIA firm or another buy-side shop.”
It’s really all about the foundation that someone makes for themselves in order to make such a move, for example, building a deep knowledge in fixed income sales and having the ability to pitch fixed income products to an institution all day long.
However, look before you leap, because some sell-side professionals who make the leap to a mutual fund shop, hedge fund or private equity firm end up crashing and burning.
The sector switch
If you’ve developed sector expertise within a sales role, why not consider an internal switch? It’s possible to make the move into IBD, particularly if the sector specialism is short of talent.
Take a look at investment banking revenue in the U.S. by client industry to gauge your best bets.
Leveraging client-side contacts to leave financial services
Another option is staying within the sector you’re an expert in, but going over to the client side, leaving financial services altogether. You can leverage the contacts you made in IBD sales to find a great company to join that values your skills and industry knowledge.
“They could be serving the retail industry, life sciences, entertainment and media or other really interesting industries – healthcare has a lot of demand right now,” says Carol Hartman, managing partner of the financial services practice, North America, at DHR International. “But they will never make as much money, so it’s really hard to make that switch.”
Investor relations is a common move for former sales professionals, says Hartman.
“People in equity sales can perhaps move into an investor relations role at a publicly traded corporation – that is a very successful transition for some people,” adds Rickart.
Hedge funds are hiring analysts, fundraisers, investor relations professionals and portfolio managers.
Riding the fintech wave
If you go with the attitude that a good salesman can sell anything, then it makes sense that an increasing number of former banking sales professionals are moving into fintech and Silicon Valley. It’s where the money is right now, and there’s no shortage of opportunities.
“Look at high-tech companies,” Hartman said. “A lot of [former] institutional equity salespeople I know have gone on to work at Salesforce.com in the Bay Area and they’ve done really well.”
Fintech firms are in a battle with larger financial services companies for technology talent with an understanding of the financial services industry.
Before you make the leap to the financial technology space, you should look into the top fintech incubators and accelerators in the U.S.
Think outside the box
Mike Karp, the CEO of recruitment firm Options Group, suggested that investment banking salespeople who lose their jobs can apply their skills to a wide range of areas. His suggestions include becoming an independent consultant or a management consultant, joining a corporate sales organization or fintech startup, or getting into fundraising, either in politics or for an NGO.
“Investment banking sales professionals can land a competitive job in a range of areas inside and outside financial services,” Karp said.
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