Banking MDs feel poor. This ex-MD is offering them guidance

If you're a managing director (MDs) in an investment bank, you're paid well. MD salaries alone are often over £400k ($533k) in London. Bonuses are supplementary to this. And yet, MDs in banks are feeling financially stretched. 

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"People are earning £1m but living beyond their means," says Alex Hayes-Griffin, a former managing director in Citi's London debt capital markets (DCM) team. Hayes-Griffin left Citi in August 2023. He now has a portfolio career, and a niche helping former peers confront their financial realities and plan for their futures. "I'm working with half a dozen people who are where I was a few years ago."

When Hayes-Griffin left Citi, he prepared ahead for the financial hit. "To be ready to walk, I had to sell our main property, a flat in Mayfair," he says. It wasn't easy. "The place in Mayfair was a big part of my ego, and selling it was an emotional decision." His wife needed persuasion, but they used the money to buy a house in Cornwall and financial freedom. "It's given me the freedom to work less," Hayes-Griffin says.

As firing season approaches in banks, other MDs may want to think about putting their houses in order. Leaving the industry requires a plan. Ex-Goldman Sachs MD Jamie Fiore Higgins, spent years saving bonuses before she negotiated her exit. Hayes-Griffin says too many people in finance presume the gravy train will keep rolling on. 

"There's not much sympathy for well paid bankers in the City, but a lot of people feel financially trapped," he says. "They have private school fees and one or two mortgages - often interest only. The initial £100k of their gross compensation is going on school fees. They're highly leveraged, and their bonuses aren't going the way they'd hoped. There's a big assumption that compensation is going to go up and when it doesn't, there are structural challenges. Rising interest rates and VAT on school fees haven't helped."

Hayes-Griffin, who has completed a coaching qualification but is not a financial advisor, helps MDs in this situation to understand the alternatives and how to achieve them. 

The first step is often opening a conversation with a spouse, which in itself can be hard when you're working long hours and travelling. The second is to calibrate financial requirements - once children have begun at private school, you're often committed to seeing them through to the end of their education. The third is to consider what to do instead.

The three are interlinked. A lot of people in banking have an idea of a "number" at which they'll have the financial freedom to walk away, says Hayes-Griffin. Often it's too high, simply because MDs used to living in Central London don't appreciate the savings to be had in the provinces. "Maybe you have to make peace for not going to the best holiday resorts," Hayes Griffin observes. 

Often, senior people in banking don't enjoy what they're doing day-to-day. "I talk to my clients about the mix of things you get to do versus the mix of things you have to do," says Hayes Griffin. "Doing deals and meeting clients is great, but 75% of your time is often spent on people issues, internal politics and admin," says Hayes-Griffin. 

Working out the "counterfactual" to this isn't easy, says Hayes Griffin. For him, it's been a new career in which he's a coach, a crypto investor and a board advisor. Like many others, he's now thinking of going to Abu Dhabi: "I could work twice as hard here and play 45% tax, or I can go to the UAE," he tells us. Other London MDs may decide the same, with or without his assistance. 

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