How equity sales became the worst job in banking
If you're thinking of working in equity sales, I have one word to say: don't. If you're working in equity sales already, I have two words to say: get out. - I was working in equity sales and I have; it is a job with no future.
I spent seven and a half years in equity sales at a major bank in London. I joined straight from university when there were around 20 people in my team. When I left, there were five. Almost everyone disappeared. I could see juniors who joined my team wondering what they'd stepped into: after a few months they started asking furtively about exit opportunities.
Equity sales' long decline is partly the result of falling commissions. As trading commissions have collapsed, there's less money to go around. It's partly the result of electronic trading: more and more clients are accessing markets directly. And then, it's the result of MiFID II.
The MiFID II regulations introduced in January have nailed the equity sales coffin firmly shut. Clients are now fearful of being charged for conversations with salespeople. The change in client behaviour has been dramatic. Before, we would call clients in the morning to chat through trade ideas. Under MiFID those same clients are reluctant to engage in case we bill them: they don't pick up, they switch on answer phones - in fact, some even turn off their answerphones just in case we charge them for leaving messages! How can you have a sales role where clients are charged while you pitch?
It's more than that though. Thanks to electronic trading systems and to declining trading commissions, banks don't want to hire people simply to sell equities any more. They want people who can sell the whole "suite" of a bank's products. It's no longer about old-fashioned stockbroking, but modern "account management." The new job is completely different.
Traditional equity salespeople spoke to analysts and portfolio managers on the buy-side about equity trade ideas: every morning, I would call my hedge fund clients and talk them through our top trades. Today's account managers don't do this. Their focus is on selling the whole range of the bank's products, not just cash equities, but swaps and equity capital markets capabilities. The emphasis is on selling the whole bank.
This change in emphasis means that the new 'account managers' aren't talking to analysts and portfolio managers, but to more operational people at client companies. For example, it's about talking to whoever runs a client's trading systems to make sure they're properly plugged into our platform, or talking to the client's finance team to make sure they understand the kind of pricing we can offer them. A tiny amount of time might be talking to portfolio managers about trade ideas, but not nearly as much as before - there's just not the wallet for that now.
The changing role has also changed the kind of person needed to do it. When I went into equity sales it was because I was passionate about equities: I loved talking about markets and I loved talking about individual stocks. I liked meeting management teams and getting an idea of where a stock was headed. By comparison, the new account managers are super-organized administrators: they're very good at covering all the bases and talking systems with a whole range of other administrative-type people.
Because of this, most people I know in equity sales are talking about leaving big banks. And those who aren't are kind of frozen in the headlights. Personally, I should have left sooner - but that's the other thing about equity sales, it doesn't really prepare you for much else.
Julia Jones is the pseudonym of a recently "retired" equity saleswoman at a bank in London
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