If any front office jobs are going to move out of banks in London because of Brexit, they will be sales jobs. - Post Brexit, salespeople touting products to clients in the European Union will almost certainly need to be sitting in the European Union itself. For this reason, the migration of many sales roles seems a given between now and March 2019.
As we reported earlier this year, Goldman Sachs has already been building out its equity derivatives sales team in Paris. Now it seems that Morgan Stanley may be up to something similar. The U.S. bank just recruited Francesco Ponti as a Paris-based vice president in equity derivatives sales. Formerly an associate at Credit Suisse in London, Ponti arrived in Morgan Stanley in Paris this September.
Morgan Stanley declined to comment on Ponti's Paris presence, which insiders say is not related to Brexit. It follows rumours earlier in the summer that the U.S. bank had begun asking its London-based equities salespeople to consider moving to the countries they were covering. In January, Morgan Stanley president Colm Kelleher said the bank would boost its offices in Dublin, Paris, and Frankfurt due to Brexit.
For the moment, however, there's little sign that MS is hiring additional salespeople in Paris. Antti Kari and Sean Flanagan, the MD in equity derivative sales and global head of equity derivative structuring whom Morgan Stanley hired from Deutsche Bank in June, are both said to be joining in London soon.
Morgan Stanley already has a sizable equities presence in Paris, with longstanding salespeople like Rafael Parrilla, who was hired from BNP Paribas in 2010. Bank of America is widely expected to begin moving equities salespeople to Paris soon, after senior fixed income salespeople at the bank migrated in July.
One equity derivatives sales professional at a Swiss bank in London said sales professionals are being located to regional offices. While Paris is unlikely to be a main hub, he says it will benefit from the rehoming of French salespeople plus Benelux coverage professionals. "My manager said the bank will say yes to any salesperson trying to relocate to Paris. We expect this to happen in early 2019," he added.
Meanwhile, there are signs of activity in Frankfurt. As our German editor reported yesterday, UBS (which pays its average investment banker €393k in Frankfurt) has begun advertising 25 new jobs in the German city - predominantly in middle office areas like compliance and regulation.
A report yesterday from think-tank New Financial found that even if London loses a quarter of its financial sector as a result of Brexit, it will still be double the size of any other European business centre. However, as @_Financeguy pointed out on Twitter yesterday, this may understate the risks of London losing critical mass.
"Finance has high operational gearing: i.e (very) high fixed costs that make profits very sensitive to marginal revenue. So a loss of even 20% of revenue might tip many firms into losses resulting in a need to rethink the cost base completely."
— Brahman (@_Financeguy) September 5, 2018
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