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J.P. Morgan has made another big hire in its artificial intelligence program – and with the poaching of Apoorv Saxena from Google, demonstrated that it is prepared to compete with the top levels of Silicon Valley in order to do so. Saxena will be head of AI and machine learning services, joining Manuela Veloso, who was appointed head of AI research last year.

Looking at the slate of AI related products that JPM have launched in the last 12 months, it’s clear that the new head will be managing a significant global franchise rather than a blue-sky product development shop. In June, the bank unveiled a virtual assistant for clients of its treasury business, which aims to learn client behaviour and JPM them navigate the payment system. Their LOXM system has been live for over a year applying machine learning directly to trade execution in equities. And the investment bank has a whole section on its website for AI and machine learning white papers and product outlines.

But this is not a bank-specific trend unique to J.P. Morgan; JPM has actually been losing artificial intelligence superstars almost as fast as it has been hiring them, with members of the former “Intelligent Solutions Team” leaving for Facebook, Deutsche, BoA and various fintech firms and hedge funds over the last few years. The Saxena hire should be seen as part of a wider movement toward automation and machine intelligence as a hiring priority.

Given that, it’s perhaps a bit surprising that if you search by keyword, JPM isn’t currently advertising any jobs with an obvious AI angle to them. But this in itself might be informative. The hiring action is taking place at the elite level, where jobs are not necessarily advertised, because part of the reason that you hire an Apoorv Saxena or Manuela Veloso (and part of the reason why competitors wanted to poach senior staff away) is that they are part of a network and can bring in follow-on hires to build out their own teams.

This is the way that senior level hiring has always worked in banking, and at the top levels of computer science too. The people who get hired first are the leaders in their field, and they are expected to know who the most promising researchers are at the level immediately below. Either through having worked together before, or through mutual acquaintances and personal recommendations, the top hire, if they are of the right calibre, attracts colleagues. So if you want to be in with a chance at these jobs, it is best to be part of a social network that includes one of the “rock stars”. We haven’t yet seen a whole-team move for a group of artificial intelligence bankers, but we shouldn’t be surprised if it happens in a year or two.

Separately, in the world of venture capital, it’s notoriously difficult to find a way into one of those social networks. An interview with Semil Shah of Haystack Partners and Lightspeed Ventures gives the key tip of “come bearing gifts”. Not in the sense of baked goods or monogrammed golf balls, but if you bring four or five potential deals, then you will do better than if you show up simply bearing a resume.

For a VC deal to count as a “gift”, though, it has to be more than the hedge fund interview commonplace of “best ideas, long or short”. Shah suggests that an idea only counts if you can demonstrate a solid connection to the company founder and a relationship which gives some credibility to your recommendation, rather than just saying “here’s an interesting company” and waiting years to find out if you were right.

And the way you build these ideas is by “hitting your beat”. At Lightspeed, the emphasis is on partners having almost a “journalistic mindset”, constantly developing sources, talking to people and working with and meeting founders. But you can’t just be a “schmoozer” – although connections and personality will get you so far, “there has to be a there there” in terms of investment skill.

Perhaps most interestingly, Shah talks about his own moves to establish a VC presence in Seattle, and attempts by other firms to look for ideas outside the Bay Area. In his opinion, one of the most important constraints on the company founders he talks to is “will they be able to put together a loyal team in this town?”.

Meanwhile

Researchers (of all types, but economists are apparently particularly bad) tend to heavily overstate their confidence in the validity of their results. Charles Manski, a professor of econometrics, is on a mission to persuade people to take uncertainty seriously and to be open about their error bars. (Bloomberg)

The technologist who developed UBS’s robo-advisor is going to AQR, as head of “client technologies”. (Financial News)

Companies don’t like it when people get allocated shares in their IPOs then sell for a quick profit, but that doesn’t mean that client confidentiality doesn’t apply. Someone on UBS’ Asian equity capital markets team forgot this rule and gave away the identity of a seller to Zhong An, the insurance company which floated last year. Zhong An then contacted the investor, and in the resulting investigation, UBS ended up suspending its head of Asia ECM. (Wall Street Journal)

Why banks are going to have to build the importance of populist politics into their business plans. (The Banker)

The FT series on the problems of the audit profession continues, with stories of audit partners who got too close to their clients. (Financial Times)

Juergen Fitschen, former co-CEO of Deutsche Bank, says in an interview that if he had the chance to do things again, he would have accepted state aid in the crisis. (Handelsblatt)

The Value Investor’s Club is the web forum that you can only join if you’re good enough, but where everyone can speak as an equal, even though some are junior analysts, some are deli store clerks and some manage billion dollar portfolios. (Financial News)

Groupthink among the fund management industry means that diversification between asset managers doesn’t always help you stay out of crowded trades. (Bloomberg)

Showing a creditable indifference to the possibility of being regarded as a bit of a stereotype, the former CEO of Deutsche Bank Americas will now be entering the world of professional golf, as the new CEO of the PGA. (Golf World)

The Australian banks were the big survivors of the financial crisis, rising up the global market capitalisation league tables and knocking on the door of the investment banking big league. Now their domestic franchises are under threat from the Royal Commission, as this excellent long-read summarises. (Bloomberg Businessweek)

Jens Weidman is no longer front runner to succeed Mario Draghi at the ECB … (Bloomberg)

…while Mark Carney has apparently been asked to stay on at the Bank of England. (Evening Standard)

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One of the bigger tasks facing human resources departments and recruiters at big banks is competing with tech companies over top junior talent. Indeed, the latest ranking of dream internships is led by four tech giants: Google, Apple, Facebook and Microsoft. Ranked third two years ago, Goldman Sachs now sits in fifth position. J.P. Morgan has fallen three spots to eighth since 2016 after being leapfrogged by Amazon and Tesla.

Frankly, this narrative isn’t a new one. Highly-sought-after interns and fresh graduates who used to flock to big-name banks years ago have been begun targeting high-profile tech companies with more prevalence, mostly due to the perceived difference in work-life balance. But what about veteran employees? People who have already begun their careers in technology at investment banks. How often do they jump to tech giants? And what about the reverse? A thorough mining of LinkedIn shows that tech giants like Google and Facebook are doing plenty of poaching from top banks while just a handful of tech veterans have headed the other direction.

More than 630 people who list Goldman Sachs as a previous employer currently work at Google. Meanwhile, just 132 Goldman employees count themselves as Google alums. The disparity is even starker at Facebook, which employs at least 226 former Goldman Sachs vets – a particularly big number considering current headcount at Facebook is around 22k (and not everyone is on LinkedIn). Just 29 former Facebook alums list Goldman as their current employer.

The recruiting advantage over experienced tech talent is even more pronounced when looking at J.P. Morgan and Morgan Stanley. More than 220 former JPM employees work at Google compared to just 29 who have gone the other direction, according to LinkedIn. Facebook employs roughly 80 J.P Morgan alumni while only two former Facebook employees are now with the investment banking giant. The worst ratio is at Morgan Stanley, which has lost at least 550 people to Google and 180 to Facebook while poaching just over 40 employees combined between the two tech giants.

“I wouldn’t say we went out of our way to recruit (tech talent) from banks, but I was always interested when a resume came across my desk that included names like Goldman Sachs or J.P. Morgan,” said a former team lead at Google. “You know they are going to be well-trained and will be able to handle the workload.” He said that, from his experience, former bank employees had a lower attrition rate than people who came over from other tech companies. “I think we were able to offer them something different from what they were used to.”

To be fair, tech companies like Google and Facebook are growing at a fast rate while most investment banks are cutting headcount or treading water. But not in technology. In May, Goldman chief information officer Elisha Wiesel said tech recruiting was “pretty staggering” in 2017, with the number of lateral hires increasing to 864 last year from 335 in 2016. Most every other investment bank is making a similar effort – they just seem to be losing the recruiting war with top tech companies, both with recent graduates and experienced tech professionals.

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As Brexit approaches, banks are discovering a potential advantage to moving sales and trading jobs away from London: the flexibility to locate jobs wherever the best candidates are to be found in Europe.

Standard Chartered is a case in point. The UK-based emerging markets-focused bank has begun advertising senior fixed income sales jobs that can be located in either Paris or Frankfurt, depending upon where, “the best talent,” is to be found.

Standard Chartered is advertising for both a director of credit sales in Frankfurt or Paris, and for a director of macros sales in either city. Candidates need to speak either German or French respectively.

Standard Chartered is also looking for a head of emerging market credit sales, to be definitively based in Frankfurt.

The bank declined to comment on its job adverts, which come as banks appear to be ramping-up their front office markets recruitment in continental Europe ahead of Brexit. As we reported yesterday, Barclays is advertising a dozen fixed income trading jobs in Frankfurt.

Reuters reported in March that Standard Chartered had begun interviewing for 20 jobs in Frankfurt. However, it emerged earlier this month that the bank may have to wait until autumn for its Frankfurt branch to gain regulatory approval as its EU subsidiary.

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In a surprising move, the head of U.S. equities trading has left Barclays after over a decade with the bank in New York.

Barclays insiders say Amit Mehrotra, the UK bank’s head of U.S equity trading left the bank last week. Mehrotra spent the last seven years as head of U.S. equity trading at Barclays and also spent the last two years running all flow derivatives sales and trading. He began his career as an equity derivatives trader at Lehman Brothers in 1996.

Mehrotra’s exit comes after an excellent start to the year for Barclays’ equities business. In the first six months of 2018, revenues were up 32% compared to the same period a year before. “I’m really pleased about our performance in equities,” said CEO Jes Staly in the bank’s second quarter investor call. “Kudos to the team.”

Neither Barclays nor Mehrotra responded to a request to comment for this article. Mehrotra’s disappearance follows some heavy hiring into the Barclays’ equities business following the appointment of Stephen Dainton, formerly of Credit Suisse, whom Barclays hired last August as global head of equities. It also follows the disappearance of large numbers of former Lehman Brothers equities traders from Barclays over the past two years. – Mehrotra was one of the last of that breed.

Barclays has hired over 40 managing directors and directors across its investment bank globally since the start of 2017. However, it’s also been letting go of established managing directors in areas like credit trading, prompting complaints from some long-serving staff who have been complaining about the influx of highly paid new colleagues.

It’s not clear what Mehrotra will do next. “He was managing one of the best flow derivatives teams on the street,” says one Barclays insider. “This is simply a regime change – the new managers are bringing in their own guys, irrespective of who they’ve got already.”

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As you will know if you have worked in an investment bank, there is often an inherent struggle between those who work on the trading floor and those who work in technology. It is amply illustrated by an event from my not too distant past.

One night after markets had closed. I was in a pub with a technologist. He was someone whom my colleagues in IT wanted to hire from a rival bank. My purpose was to try to persuade him to jump ship with the aid of my natural charm and a few beers. The IT boys felt the fact that – prior to being a trader – I had built computer systems might be helpful.

After an hour, my smile had solidified into a rictus grin. The technologist had a litany of complaints about the traders at his current shop.

He said they were vague with their requests; they didn’t understand what was and was not possible; they were always changing their minds; they were impatient, but, conversely, they weren’t interested in any of the details until the project was delivered, at which time they would bitch and moan that the system wasn’t what they wanted.

Above all, he said the traders were arrogant and overpaid. At that, my grin tightened one further notch.

I did my best to persuade him that, in my department at least, we had mostly solved these problems. As it turns out, either my charm or the beer was persuasive because he did make the move and, as I recall, had a happy and successful career.

But the issues he describes are widespread within banking. They arise naturally from the different natures of the traders’ and technologists’ jobs and, unless forcefully addressed, can cause a breakdown in a relationship that is increasingly vital for any bank’s success.

For one thing, traders and technologists very often belong to completely separate departments which ultimately only come together at board level.

There are some good rationales for this structure: with computer systems handling gigantic money flows it is considered safer not to have traders actually supervising tech folks or vice versa – think about the crazy reporting structure that allowed Nick Lesson to hide his losses and bring down Barings.

Having technologists managed within a central IT department also allows best practice to be transmitted (by osmosis as it were) throughout the whole organisation: a practice that – in theory – should lead to efficiencies.

But what it does mean is that many tech guys, on a temporary assignment to build systems for one area, are often not product specialists: they either need to be educated or have specifications that are completely precise. Problems are baked-in from the start.

The two groups also have slightly different day-by-day priorities. IT guys want to take the time create computer systems that are bulletproof since the onus is on IT to fix things should they fall over – all through the night or at weekends if necessary.

Traders, on the other hand, used to the minute-by-minute pressures of the markets, often want things right now and are impatient with delays. This culture clash can often cause ‘difficulties’.

I recall one meeting, years ago, where a tech guy was given responsibility for taking over a series of spreadsheets that an enterprising trader had built to run a new and fairly complex product. When the techie found out that the sheets were only held on the hard drive of the computer under the trader’s desk, he went pale (actually, paler) and let out a small, involuntary cry of panic like a nervous passenger in a jet hit by turbulence.

Taken to extremes, these cultural differences can lead to the dissatisfaction expressed so forcefully by my companion in the pub: airy orders from the business to ‘go away and build something’; subsequent sniping and complaining about delays (‘how long could it possibly take?’ etc.); then a full scale war when the – unsatisfactory – project is eventually delivered.

But there is a way around this, and that way is teamwork and constant communication.

Successful projects have the IT guys involved right from the beginning in what the business (the traders and salespeople) are planning for their systems and why. They allow them to express their views and to own the strategy and not just be low-grade ancillary workers.

Successful projects also create detailed and precise definitions of every aspect of what is required. Don’t just leave this to the IT guys to figure out. This bit’s a pain, but it is crucial.

The parties involved meet constantly throughout the process to make sure the project is on track and to iron out any issues as and when they arise.

I once had a visit from a senior chap from another part of the bank who had been sent to ask how we handled technology in the FX department: we had a reputation of being good at this stuff; his department sucked. ‘What do you mean by constant communication?’ he asked, ‘Quarterly?’

I took him out onto the trading floor and pointed out numerous technologists and traders sitting, side-by-side, in intermingled teams. ‘Unless they all have Asperger’s,’ I said (which, knowing IT people and traders, is not a zero probability, I admit), ‘I’d guess it’s every few minutes.’ My visitor’s jaw dropped.

Ultimately, it boils down to this: if traders and salespeople treat their IT colleagues as subservient menials or, at best, as caddies (with traders in the glorious role of Tiger Woods), disaster beckons.

On the other hand, if senior managers are wholly engaged, and if technologists are treated with respect as full, albeit specialised, members of the wider team, success may follow.

In a world where banks are little more than people and computers and where their biggest long-term challenge may well come from technology firms, this might not just be ‘nice to have’ but a recipe for survival.

Kevin Rodgers started his career as a trader in 1990 with Merrill Lynch in London before joining another American bank, Bankers Trust. From there he went on to work as a managing director of Deutsche Bank for 15 years, latterly as global head of foreign exchange. His book, “Why Aren’t They Shouting?: A Banker’s Tale of Change, Computers and Perpetual Crisis” was published by Penguin Random House in July 2016.

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This past Tuesday was marked on every calendar of the more than 30k people who took the CFA Level III exam back in June. It was results day. But as it turned out, much of the action took place on Monday, when one test taker went to the forums to let others know that he had a strange “Congratulations!” message sitting in his CFA Institute account.

Some were quick to dismiss the claim, noting that it was probably an error, leaving the originally poster regretting logging in to his account in the first place. “The rest of my work day is gone, now sitting at my desk wondering if what I saw is real. Sigh,” they wrote. But soon a few others said they too received the congratulatory message in their account. This caused mass unrest among those who didn’t receive the message, assuming they had failed. “Well, this will be another great 24 hours of anxiety and speculation!” said one candidate.

Toward the end of Monday, some test takers even resorted to counting the number of people who acknowledged receiving the message and dividing it by those who didn’t to see if the percentage would fall in line with past pass/fail results. Several hours and hundreds of messages later, the official results were emailed at 9 a.m. EST. Those who received the congratulatory message did in fact pass, but that didn’t mean that candidates who saw nothing failed.

“Messages of congratulations did appear accurately, albeit prematurely, in a small number of candidate accounts on Monday before they were removed,” the CFA Institute told eFinancialCareers in a statement. “Exam results notifications were issued on Tuesday to all candidates as planned.”

Needless to say, Monday may not have been the most productive day for some investment professionals. A screenshot of the now-deleted congratulations message is below.

Congrats

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I recently finished an internship at a leading European bank in Singapore and I also received a ‘return offer’ for a full-time risk-management role starting in 2019. That’s the stuff of dreams for most Singaporean students like me – it’s my ticket into a stable job at a big-name firm a year before I even graduate.

But get this: I’ve just turned down the offer! How come? As much as I enjoyed my summer and loved the culture at the bank, I’ve decided that the middle office just isn’t for me. Having done a front-office internship in 2017, I now know that I’m better suited to a front-office investment banking job where I can meet clients and deliver solutions. I’m a people person; I like to share and present ideas.

It’s very important to be honest to yourself (and to the bank you interned with) about what you want to do when you graduate. I know I could have succeeded in risk management (I performed well this summer) and I know that risk is a ‘safe’ function in which redundancies are rare. But I didn’t want to start my career already feeling disinterested. Moreover, transfering from risk to the front-office is difficult/impossible at an investment bank – risk would not have been a short-term ‘stepping stone’.

During the latter half of the internship, I made it clear to HR that I wanted my first graduate job to be client-focused, a point I restated when I rejected the return offer. The HR manager actually said it was refreshing to get such honest feedback. She said there may be IBD roles in Singapore for me in the future, but there weren’t any 2019 front-office analyst positions available locally.

This is not just the case at my former bank – it’s a wider problem in Singapore. A lot of students in Singapore are still keen on investment banking. But although our country is a big financial centre generally, it offers limited opportunities in IBD at global banks. Things aren’t improving either. Growth in the Southeast Asian markets that Singapore serves hasn’t been as strong as in Hong Kong/China.

Large banks are further shifting their focus to China, with more expansion on the horizon as China liberalises its joint-venture ownership laws for foreign banks. The bank I interned with bases the vast majority of its ex-Japan Asia IBD front-office in Hong Kong. This has always been the case, but the HK/SG gap is more extreme now.

As a result of all this, I have been forced to apply for 2019 graduate jobs in Hong Kong, despite having no connections there. And to further increase my chances of getting into the front-office, I’m currently applying for 2019 Hong Kong-based internships, too. Most banks let in final-year students as 2019 interns, and those who get return offers either start full-time soon after the internship, or have to wait until 2020.

I’m also now broadening the scope of my front-office job search in Singapore beyond IBD. While I wouldn’t go into front-office retail or SME banking in Singapore, I’m considering corporate banking (serving large multinationals on the institutional side), asset management and hedge funds.

Jobs in the front-office…in investment banking…at global banks…in Singapore…at a graduate level are niche x 4! I have to keep my options open if I want to avoid a career in the middle office.

Bernadette Bao (not her real name) is a student in Singapore and is graduating next year.

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Hedge fund jobs, as you probably know, are notoriously difficult to land – even for elite analysts and senior sell-side rainmakers. Hedge fund jobs also come with the expectation of high comp (via carried interest) and big expense accounts.

What you may not realise, however, is that working for a hedge fund requires a high degree of…bitchiness. Acclaimed U.S. author Gary Shteyngart has just published ‘Lake Success’, a novel about a hedge-fund manager called Barry who loses everything – and it’s full of new insights into the oftentimes secretive industry.

Shteyngart didn’t just rely on formal interviews to uncover what it’s like working for a hedge fund; he lived the life. During a four-year period doing research for the book, the author went to hedge fund managers’ parties and flew with them on their private jets.

Some of the hedge fund executives he mingled with “felt a lot of hatred toward investors”, Shteyngart told the Wall Street Journal. And when asked by Shteyngart to explain the underlying motivations of successful competitors, they responded with a touch of malice. “They would say, ‘His wife doesn’t really love him’, ‘His mother never loved him enough’, ‘His children really hate him.’”

In the book, Shteyngart also satirizes the lifestyles led by top hedge fund professionals. Barry’s Manhattan existence is described in detail, from the Filipina nannies, to the Duravit sinks and the $33k bottles of Karuizawa single-cask whiskey. Ultimately, however, Shteyngart does not make the life of a hedge fund manager sound overly appealing. “So many of them were missing fundamental pieces of themselves, and the money was supposed to fill in for those pieces,” he told the WSJ.

Separately, Goldman Sachs may be investing in machine learning (predominately within its FAST Securities team and R&D Engineering Group) but the bank not adverse to hearing about the downsides of AI technology and its affect on humans. Goldman recently invited philosopher Robert Rowland Smith, author of ‘AutoBioPhilosophy: An Intimate Story of What It Means to Be Human’ to speak at one of its regular ‘Talks at SG’ events (you can watch the video here). When discussing “AI vs. human nature” Rowland Smith remarked, “There’s a very contemporary sense that we need to reclaim what it is to be human away from the transactional, the algorithmic, the robotic”. Music to the ears, perhaps, of Goldman’s human bankers in the audience.

Meanwhile:

Christian Sewing: Deutsche Bank will stay global, stay in IBD, but not try to be a “number 1, 2 or 3” investment bank. (Reuters)

Sewing’s call for “strong” European banks has reignited speculation about a Deutsche/ Commerzbank merger. (Financial Times)

David Harvey-Evers, head of European M&A at Standard Chartered, has left the bank. (Financial News)

The new way to earn a counter offer at J.P. Morgan. (Business Insider)

UBS has appointed law firm Freshfields Bruckhaus Deringer to help investigate the bank’s handling of a rape allegation. (Bloomberg)

Credit Suisse has poached Makoto Kuwahara from Deutsche Bank as its new chief executive officer for Japan. (Reuters)

The bankers helping to list James Bond’s favorite car maker. (Financial News)

Meet Goldman’s do-gooder bankers. (Bloomberg)

Bank of America now holds more than 50 blockchain-related patents. (Blockonomi)

UBS is shuttering its U.K. digital wealth management platform, which it only launched early last year, and selling the IP to an American start-up. (Reuters)

Was the financial crisis a wasted opportunity? (Project Syndicate)

You could soon fly London to Sydney, without stopping, in a bunk bed. (Bloomberg)

Have a confidential story, tip, or comment you’d like to share? Contact: smortlock@efinancialcareers.com

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If you’re in the investment banking division of a European universal bank, and your parent company isn’t making a double digit return on equity, then one of the biggest potential threats to your job might be activist investors. After all, Barclays, Deutsche and Credit Suisse have all come under pressure for activist investors in recent months and in some cases it looks like the pressure is beginning to tell in terms of restraining management from the markets led growth strategies that they would really prefer to be following.

In a sense, though, the sudden prevalence of activist investors is strange. Historically, the banking sector has been a bit of a graveyard for activist shareholders. There are only a few success stories of value-creating change organised by outsiders, and there are lots more stories of raids that started with a lot of noise and finished by quietly selling shares at a loss, with greater or lesser degrees of embarrassment.

The pattern was set at the start of the millennium, when “Cobra”, an investment syndicate made up of former investment bankers, showed up owning 17% of Commerzbank and demanding that the company restructure itself and look for an acquirer. Two years later, the stake had been sold and the syndicate broken up. The pattern repeated itself in 2008, when Luqman Arnold, the former president of UBS, arrived at the head of Olivant, an activist shareholder with 2.8% of the company and a thesis that UBS could create value by breaking itself up in the aftermath of the investment bank’s mortgage-backed securities disaster. That ended badly, partly because Olivant had its prime brokerage account with Lehman Brothers. Knight Vinke fared better in financial terms in their activist struggle with HSBC, but had surprisingly little impact on the management structure or business strategy.

There are several reasons why activist investing comes to grief in the financial sector. Most importantly, the typical activist recipe for success is to force management to buy-back stock, utilise idle cash or spin off under-performing subsidiaries. All of these things are much more difficult to achieve in a regulated industry. And it’s harder to understand the operations of a big bank, the shared services and synergies from the outside than an industrial company or a retailer; even a former CEO can’t always make a convincing case. And incumbent management are more likely to be well-connected with the financial institutions among their investors, making it more difficult for activists to build a consensus (Edward Bramson appears to be finding this out in Barclays).

So why do they do it? Because the success stories can be spectacular. Chris Hohn’s activist raid on ABN Amro led to the company’s breakup and acquisition by the consortium led by RBS, and left Rijkman Groenink as the bank CEO who created more shareholder value than any other in the 2000s, all of it on the last day of his tenure when he accepted the offer. ValueAct made a killing with their position in Morgan Stanley, although this seems to be more attributable to good timing with respect to the market cycle than to activism per se.

The problem and the opportunity are that bank franchises are really valuable, really durable and really easy to mismanage badly, meaning that the wrong management team can send market capitalisation much further below the intrinsic value than in almost any other industry.

So if your company has activist shareholders, the evidence suggests that they are unlikely to succeed in forcing strategic change if things are merely under-performing. Activists in the industry do best when they can force a break-up or acquisition, and the climate still doesn’t seem to be right for big M&A activity. They might still be a constraint on growth ambitions, though.

Dan Davies, is a senior research advisor at Frontline Analysts and a former banking analyst at Cazenove, Credit Suisse and BNP Paribas.

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The process of searching for a new job in banking has changed dramatically over the last 10 years. Looking to cast a much wider net, human resources departments at big banks have fully embraced technology – from resume-tracking software to social networking sites to video interviews.

One byproduct of this evolution is that hiring managers and recruiters now need to look at candidates through a different lens. At the same time, prospective and junior bankers find themselves open to more scrutiny than they faced a decade ago. There’s a laundry list of small things millennials are prone to do during their job search that are drawing the ire of hiring managers. Here are a few that we’ve heard.

Full voicemails

A trend that is occurring more and more these days, said Roy Cohen, career coach and author of The Wall Street Professional’s Survival Guide. No explanation is really needed to see how a full voicemail can hurt your chances of landing a job.

Social media miscues

The first thing one hiring manager does is to mine a candidate’s social media profiles for clues about who they really are. First, the obvious (for most people): don’t litter Facebook or Twitter with pictures of drunken partying and steer clear of aggressive political debates, she said. When it comes to LinkedIn, far too many people in financial services fail to keep their profile updated, Cohen says. This can not only be misleading for recruiters, but it also shows a lack of care and diligence, he said.

Video interview failures

Goldman Sachs’ recruiters recently posted a clip with their own advice for video interviews, suggesting candidates likely don’t always treat the process as if it were a normal interview. Dress business casual at a minimum, make eye contact with the camera as if it were a person sitting across the desk and don’t act like a robot by reading from notes that are off-camera, even if it’s a recorded interview rather than a live chat, they said.

No post-interview thank-you notes

A hiring manager at a New York advisory firm said candidates always sent thank-you emails following an interview – until recently. He said it’s happened twice this month alone, including with one junior candidate they were interested in “but were really thrown off” by the lack of following up. “It made us question her pretty hard,” he said. “It’s a red flag not to send one, especially if you want the job.” He and his colleagues will forward thank you notes to each other to compare candidates and to see if someone copy-and-pasted the same message sent separately to different managers.

One managing director at an investment bank said you should snail-mail a written note, but others we interviewed believe it would create too large a time gap.

Casual language

Using “yeah” instead of “yes” particularly annoys one veteran private wealth manager. He said he’s even read emails where candidates shorten words like “because” to “bc.” And don’t use acronyms. “LOL makes me see red,” he said.

Double submitting your resume

This one drives recruiters especially crazy. Sending your resume through multiple sources – LinkedIn, headhunters, job portals – will always make a candidate look bad, said Lisa Mogilner, a senior recruiter at financial headhunter Clear Point Group. “They look desperate and disorganized.” In fairness, this is more of a universal complaint rather than one aimed at millennials.

They’re…lazy?

“I can fully vouch that millennials work half as hard as non-millennials,” said the private wealth manager. “It’s infuriating.” Clearly, he isn’t a fan of the generation, if you couldn’t tell.

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““

Last time we referenced Afsheen Afshar, the former head of data science at J.P. Morgan’s corporate and investment bank, we said he was doing something rather interesting over at private equity fund Cerberus Capital Management. This no longer the case: after less than a year with the fund, insiders say Afshar is with Cerberus no more.

The reasons for Afshar’s premature exit are not clear: neither he nor Cerberus responded to a request to comment for this article. What we do know, however, is that Cerberus has hired in a whole new data person in the form of Benjamin F. Sylvester III, another former J.P. Morgan technologist. Sylvester turned up at Cerberus this month. Insiders suggest Afshar was “long gone” by the time of his arrival.

Afshar’s resume is big on brand names. A Stanford and Princeton graduate with a specialism in ‘neural prostheses’, he spent five years at Goldman Sachs, before moving to J.P. Morgan and then to Cerberus in November 2017.

Last time we looked, Afshar was busy at Cerberus, building what he described as, a ‘full-scale front-to-back data and advanced analytics capability that can be leveraged by all businesses and portfolio companies touched by the entire firm.’ At the time he was recruited, Cerberus said Afshar would both be building a new data science platform and assembling, “a team of world-class technologists.” He subsequently hired Jason Gilbertson, Stanford University data mining and statistics graduate, who joined in April 2018.

Afshar exit comes as Cerberus is stocking up on ex-J.P. Morgan data talent. Matt Zames, the former chief operating officer of J.P. Morgan, was named president of Cerberus in April 2018. Len Laufer, the former head of J.P. Morgan’s intelligent solutions team joined the fund earlier this year, and may well have been behind the arrival of Ben Sylvester. Sylvester has both a trading and a technology background. He joined J.P. Morgan in 2008, originally as head of U.S. equities trading at J.P. Morgan Asset Management. In 2013, he became head of platform strategy and development at JPM Asset Management. And in 2015 he became head of corporate and investment bank and asset management solutions. Sylvester left JPM this July.

As we reported earlier this year, J.P.Morgan has been losing machine learning talent ever since disbanding its intelligent solutions team. Not everyone has gone to Cerberus: Graham Giller, went to Deutsche Bank in March, David Fellah, went to fintech firm ITG in London in April, and Rajesh Krishnamachari left for Bank of America Merrill Lynch in the same month.

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J.P. Morgan has lost a big name within its global equity derivatives team. Jason Cuttler, who spent the last two years at JPM after a lengthy career at Goldman Sachs, has left the bank and is currently on gardening leave, suggesting he’s been poached by another firm. Cuttler didn’t respond to a request for comment on where he’s heading.

At Goldman, Cuttler managed a tactical equity derivatives strategy team within its securities division. He spent 15 years in London before moving to New York in 2013, according to LinkedIn. He was named managing director in 2010. J.P. Morgan hired Cuttler away from Goldman Sachs in 2016 to build up its own global equity derivatives business, but it appears he is moving on after just two years. He spent his entire 15-year career at Goldman before taking an MD role at J.P. Morgan.

Equity derivatives has been a hot area in 2018, particularly at Goldman Sachs, which has seen quite a bit of turnover recently. Several high-profile equity derivatives traders in London have left the bank this summer, including executive directors Francesco Taglietti and James Spooner in May. At least three other departures took place in June in EMEA, with insiders saying there was some disgruntlement over politics and pay – Goldman has been hiring and is reportedly paying new recruits better than the old guard, sources told us at the time. The firm also just poached a senior corporate derivatives executive from UBS in New York.

Elsewhere, Morgan Stanley, Bank of America and BNP Paribas are said to be building up their equity derivatives businesses in Europe. BNP just poached two equity derivatives salespeople from Goldman Sachs and J.P. Morgan. There may be more movement going on in equity derivatives than in any other area in investment banking.

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““

If you’re a first year analyst in an investment bank, how much must you spend on your outfit? While the suit your mother bought you from eBay is definitely a no-no, do you really need to go very large in Hugo Boss?

You might think this would depend both upon where you work (in terms of organization) and the sort of division you work for. For example, a technology analyst at HSBC who mostly interacts with colleagues might be expected to dress less nattily than an M&A analyst at Goldman Sachs with aspirations to get out and visit clients.

In fact, sartorial splashing out seems to have more to do with the individual than the bank or division.

We asked some analysts who joined banks full time this summer how much they spent on suits. The biggest spender was in the technology division of Goldman Sachs, which is now allowing its people to go “totally casual” if they so wish.

“I spent £1,500 on my suit,” says the nattily-dressed Goldman tech analyst. “I spent around £200 on my shoes and I have ten shirts costing £80 pounds each.” That’s £2,500 ($3.2k) in total then.

An incoming analyst on the trading floor at a French bank says he got his suit in the sale for £800 and supplemented it with £250 shoes and shirts costing £50 each. An incoming IBD analyst at a U.S. bank says he spent £350 on his suit (from SuitSupply), bought a lot of white (and some pink) shirts from Charles Tyrwhitt, and purchased several pairs of shoes costing between £150 and £300, a Hermes tie for £300, some silver cufflinks for £150, plus some CK underwear.

At the other end of the scale, an IBD analyst at a leading M&A boutique in London says his suit budget was £200. “Given that I was going to be wearing it every day, I tried to minimize what I spent on my suit,” he tells us. “I didn’t see the point in buying an expensive suit that was going to be ruined by daily wear and tear. I bought several double-cuff shirts, costing between £30 and £60 each and I bought a pair of cheap shoes for less than £100, plus some more expensive ones that I only wear to meetings.”

If the biggest spender was in Goldman’s tech division, so was the smallest. “I have two suits, both of which cost me around £100,” says another GS tech analyst. “- I have one pair of really good shoes which cost me £150 but were a really good investment (I’ve had them for two years and they look like new). I usually buy non-iron shirts costing around £30 and I have seven of them. I also have three ties which cost me £40 each and some cuff-links which cost me £25 each, but I don’t really use those either…”

Similarly, an analyst in Goldman’s risk division confesses to parsimony too. “I spent no more than £100 on my suit. Around £40 on shoes, and my shirts were £10-£15 each,” he says. Not all young bankers have a big clothes budget.

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Contact: sbutcher@efinancialcareers.com

“”

Photo credit: Getty

Working for a top-tier bank doesn’t stop people from making embarrassing or even career-threatening mistakes at the office. We spoke to several finance professionals in Singapore and Hong Kong to find out some of the worst blunders they’ve witnessed on the job.

Singapore fling

Lloyds CEO Antonio Horta-Osorio isn’t the only banker to take full advantage of a work trip to Singapore. “One banker I know would travel frequently from Hong Kong to Singapore and to show that he was saving money for the bank, he’d say he was staying at an unoccupied place belonging to a client,” says a former HSBC banker. “Later the rest of the bank got to know that he was actually shacking up at his assistant’s apartment during these so-called ‘business’ trips.”

One night in Bangkok

“The most interesting stories tend to happen when Singapore and Hong Kong-based bankers go to cities like Bangkok and Manila,” adds the ex-HSBC employee. “I know a banker who was sacked because he ran a bill of S$30k on a trip to Bangkok and logged it as ‘client entertainment’ expenses. While he was managing a high AUM for this client, the bill was a bit too much for his conservative European bank to digest.”

Fries with that?

“I was working on our structuring desk in Hong Kong and didn’t usually meet clients, so I was wearing a half-sleeve shirt and chinos,” recalls a banker from a global IB. “I got pulled into a client visit at short notice and ran around the floor finding a tie to wear with my shirt. My colleagues found it quite funny and introduced me at the meeting as having just joined the bank from McDonalds. I suppose I was looking quite like a McDonalds shift supervisor.”

Trading floor joke gone wrong

“I worked with a famously loud-mouthed trader who always wore the bare minimum to work and generally looked scruffy – no fashion sense whatsoever,” says Hong Kong-based Matt Hoyle, a trader-turned-headhunter. “One day he shows up to work at noon in a screaming black-and-white pinstripe suit. His boss asks him if he’s wearing that so he can finally take that ballroom dancing exam that he knows he’s been longing to do in secret. He answers that he’s just returned from his grandmother’s funeral.”

Missing in action

“A graduate at Barclays in Singapore began well when he was first hired, but after a while he started going AWOL late afternoon and then wouldn’t come into work until 10am,” says a source who worked with him. “When questioned he said he didn’t think there was a problem as no one at university was that precious about time keeping, so he didn’t realise you had to be on time for work!”

Lost in translation

“I had an embarrassing experience when I arrived in Jakarta for my first business trip there,” says Russell Graham, a former head of solution delivery at Standard Chartered. “My bank arranged someone to help me through immigration and he kept asking ‘do you need a pizza?’. I thought it was strange, but wanted to be polite so I replied, ‘it’s ok, I ate on the plane’. We walked a little further and he asked again, ‘are you sure you don’t need a pizza?’ Then I noticed him pointing at something – it wasn’t a fast food place but an immigration booth where they were issuing visas on arrival.”

Friday faux pas

Dress-down Fridays are a potential minefield for banking professionals, but if your firm doesn’t have one, don’t try to start one yourself. “A candidate I recruited would always turn up to his new workplace dressed in flashy casual clothes on Fridays, but the bank didn’t do casual Fridays at all,” says Vince Natteri, managing director at recruitment agency Pinpoint Asia. “His manager even spoke to me about this and asked why he didn’t find it odd that everyone else was dressed formally on Fridays.”

Have a confidential story, tip, or comment you’d like to share? Contact: smortlock@efinancialcareers.com

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Image credit: PhonlamaiPhoto, Getty

Standard Chartered is already hiring for its new Hong Kong-based virtual banking unit. Other firms are expected to follow suit in the run-up to the Hong Kong Monetary Authority granting licences to operate online-only banks for the first time.

Stan Chart is among a handful of players to have applied for a virtual-banking licence, the first small batch of which are expected to be issued by the HKMA in late 2018 or early 2019.

The bank announced yesterday that it has “set up a new entity for its virtual bank” and appointed Deniz Güven as its chief executive officer. Güven, who joined Stan Chart in May 2017 as global head of design and client experience for retail banking, will “lead a team to build a new banking model”.

We understand that Stan Chart isn’t waiting for the licencing decision to build up Güven’s team. “It has been recruiting quite aggressively for the virtual bank, so it can hit the ground running if the HKMA gives it the go-ahead,” says a source close to Stan Chart.

Stan Chart’s virtual banking operation has been dubbed ‘Project Dragon’ and has been hiring for roles in technology, risk, compliance and HR, according to another source. The bank declined to comment on the name and the recruitment.

“For banks as large as SCB in Hong Kong, it’s probably easier to hire new developers from the market rather than transferring people from other teams into virtual banking,” adds Sid Sibal, associate director of banking and financial services at recruiters Hudson in Hong Kong. “Their existing technologists probably lack knowledge in virtual banking because it’s different from traditional e-banking.”

While Stan Chart is believed to be the only global bank to be seeking a virtual licence, several other companies have reportedly submitted applications before today’s HKMA deadline. These include Bank of China, Ant Financial, Tencent, Ping An Insurance, HKT Trust and HKT, Chinese smartphone maker Xiaomi, online insurer ZhongAn, and the fintech firms WeLab and TNG Wallet, according to Reuters. The HKMA is expected to initially grant about four licences to ensure the new regime runs smoothly, says our first source.

All the successful applicants will need to hire across the board, say recruiters. Technology vacancies at virtual banks will focus on fields such as robo advisory, chatbot, application developers, front-end developers, and blockchain engineers, says Scott Townend, a strategic account director at recruiters Randstad in Hong Kong. Virtual banks will also need “marketing tech” (i.e. data analytics, customer experience and customer loyalty) staff, he adds.

“In the short term, virtual banks will be looking for CFOs, and compliance and audit professionals as these are some of the key positions the HKMA requires for an application,” says Gin Sun, an associate director at recruiters Michael Page in Hong Kong. “In the longer term, product developers and sales people will be needed.”

Recruiters expect high interest from candidates, especially technology professionals, for jobs at virtual banks. “Instead of working for a slow-moving Hong Kong retail bank, you’ll be going into a role which is being built from scratch under an exciting new regime,” says Warwick Pearmund, associate director of emerging technologies at Pure Search.

Stan Chart hopes that having a separate local digital platform will help it break away from its global and legacy technology systems and allow it to win new customers by working more closely with start-ups, according to Reuters. “Virtual banks present a new set of challenges for technologists. Their jobs will no longer be about building, maintaining and improving the tech infrastructure that traditional banks currently have. Their roles will instead reflect the shift toward data management, analytics and cloud services,” says Townend from Randstad.

Virtual banking technologists could also help to reform Hong Kong’s large but much-maligned retail banking sector. Small businesses have long complained about problems when opening bank accounts, while Hong Kong consumers remain widely unhappy with service levels from their current banks, according to 2017 research from Accenture. “Technologists at virtual banks will be pioneering a new era in banking in Hong Kong, and this could enhance their competitiveness in the job market in the long run,” says Sun from Michael Page.

Have a confidential story, tip, or comment you’d like to share? Contact: smortlock@efinancialcareers.com

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Imagine the kind of flexibility that Uber provides its workers but adapt it to financial services. That’s what PwC is trying to pull off with a new recruitment program designed to tap into a talent pool that can’t work a traditional nine-to-five.

The program, dubbed the flexible talent network, will allow employees to choose their own working pattern. This can mean shorter working hours or only working for a handful of months throughout the year. The idea behind the program is to attract people who wouldn’t normally apply to a firm like PwC due to their life constraints: full-time parents, entrepreneurs and the semi-retired who are looking to supplement their income.

Applying to the network appears fairly simple. You upload your resume, select the areas of business you’d be interested in and explain your desired working pattern. Candidates don’t actually apply for a specific role. PwC looks at a person’s background and tries to match them with specific projects based on their skills and availability.

On the surface, the idea makes plenty of sense. There are likely thousands of people out there who are highly skilled and in need of a part-time or temporary job that don’t want to work at a coffee shop. If nothing else, the firm will tap into a severely under-recruited talent pool. But it will be interesting to see how PwC deals with the potential hurdles that come with employing part-time workers who have other commitments, and how that could affect certain projects.

The Independent is reporting that the network will offer some bells and whistles that a gig company like Uber doesn’t, including accrued benefits like pro rata holiday pay. Right now the network is only operating out of the U.K., though PwC already runs a similar program in the U.S. called the Talent Exchange, a marketplace where contractors can apply for specific roles with pre-determined durations. Part-time doesn’t appear to be an option, however.

Elsewhere, bankers have discovered an inventive new way of getting fired. More than a dozen employees within Wells Fargo’s investment bank have been let go or suspended for allegedly doctoring receipts in an effort to expense meals, according to the Wall Street Journal. Like most investment banks, Well Fargo Securities comps dinner for analysts and associates who are burning the midnight oil. But there are rules – most banks will sign off on meals ordered after 6:30 p.m. Investment bankers at Wells Fargo’s San Francisco office apparently like the early bird special. They reportedly altered timestamps on emailed receipts for delivery orders to make it look like they were working late so they would get reimbursed. Amazingly, the majority of junior bankers at that location have left the firm or were suspended.

Meanwhile:

Former Goldman Sachs analyst Damilare Sonoiki has been charged with securities fraud after allegedly providing inside information to an NFL player ahead of four corporate acquisitions. The two were none-too-patient. Former Cleveland Browns linebacker Mychal Kendricks turned $80k into $1.2 million in just four months in 2014. Sonoiki, a 23-year-old analyst at the time who went on to become a TV writer, was rewarded by Kendricks with around $10k in cash and some football tickets. (WSJ)

JPMorgan Asset Management is shuttering a $1 billion credit hedge fund. Led by Fahad Roumani, the Palm Lane Credit Opportunities Fund appeared to be doing fairly well, with no down years since it opened. It employed 23 people. (Bloomberg)

BNP Paribas traders accused of rate-rigging used lyrics from songs by 80s rap group Salt-N-Pepa to disguise their dealings in chat rooms. (NY Post)

NEX has hired London executive Chris Barrow to help run its post-trade division. The Michael Spencer-led firm has been doing a lot of hiring to build up the group that helps hedge funds manage risk and data when trading. (FN)

More than 160 Facebook employees are pushing back on the tech company’s “intolerant” liberal culture. (Business Insider)

Merrill Lynch is reversing its decision to ban brokers from charging commissions in retirement accounts (WSJ)

A former director at Citi and Lloyds Banking Group is in hot water after taking nearly $4 million in tax payer money to refurbish an English castle that he is now trying to sell for a $2 million profit after just one year. Christian Tym said at the time of receiving the historic renovation grant that he planned to open the 19th century property to public tours. (The Sun)

The Department of Justice said it believes Harvard discriminates against Asian-American applicants through the use of a subjective personal rating system that holds them to a higher standard than other races. The DOJ weighed in on the matter after families sued the university for discrimination for allegedly limiting the number of Asian-Americans that it admits. (CBS News)

Goldman Sachs posted a blog to highlight some of the activities interns got to take a part in this summer other than working on Excel models at their desk. They made crab cakes during a cooking class, climbed a rock wall and built some robots, among other things. (GS)

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Softbank’s Vision Fund is big. Very big. At $100bn, the Financial Times said in June that it’s the, “largest pool of private money ever raised.” Stephen Schwarzman of Blackstone has described it as, “unprecedented.” In London, the tech-focused fund operates out of a four storey building in Mayfair and is known for operating at the kind of dizzying pace which usually signifies long working hours for the people who work there. It also pays rather well – if you’re at the top.

SB Investment Advisors UK – formerly known as Softbank Vision Advisors (effectively the Vision Fund) just released its first ever set of annual accounts. They suggest that Rajeev Misra – the former head of credit trading at Deutsche Bank – is handsomely remunerated for his role running the fund from the office in Mayfair. For the 16 months ending in March 2018, Vision’s highest paid director was paid $4m, or $3m annually. This director is presumably Misra himself.

Vision is less lavish lower down the hierarchy. In March the fund employed 44 people (16 in the front office, 28 in the back office), to whom it paid a total of $8m over the same period – or an average of $181k each. In fact, much of the money is likely to have gone to the ex-senior Deutsche traders like Colin Fan who work with Misra at the fund. The junior investment bankers who’ve also joined will likely be further to the back of the pay queue.

Needless to say, it’s still early days. Vision’s propensity for paying its people is likely to increase if its investments go well. As of June, the FT said the fund had made 31 minority investments in tech firms, including in Uber and Didi Chuxing (a Chinese autonomous technology conglomerate) and WeWork. Private equity funds typically hold investments for a decade or more, although Softbank founder Mayoshi Son told the FT that Vision’s strategy is to, “create a consortium of companies that can sustain SoftBank’s growth over 300 years,” suggesting Vision employees could have to wait a while for their carried interest.

For the moment, SB Investment Advisors UK isn’t profitable. In the 16 months to March 2018 it made a loss of $60m on turnover of $54m. If the highest paid director is to continue earning $3m a year, this will need to change.

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It may be August (just) but this hasn’t dissuaded hedge fund Point72 from continuing with its hiring drive. The hedge fund, which was founded by veteran trader Steve Cohen, has hired a former junior natural gas trader from Citadel, and a former financials equity researcher from RBC Capital Markets.

Chris Weiss, who spent fourteen months at Citadel after graduating from Cambridge University with a PhD in econometrics, is joining Point72’s discretionary global macro team in September. A specialist in forecasting methodology research, Weiss is understood to be joining Peter Williams’ global macro team as a quant analyst. Williams himself joined Point72 in June 2018 after three years at Balyasny and seven years at Goldman Sachs.

Point72’s other unseasonal hire has a brief history as an investment banker. Elliott Broadbent spent a year as a financial institutions group (FIG) banker at RBC Capital Markets before swapping into diversified financials equity research. 20 months later, he too has just joined Point72 as a long/short equity analyst.

Point72 is building out is London office after accepting outside money and moving to larger premises earlier this year. Weiss and Williams aren’t the only recent additions. In May, the fund hired Robert Tazelaar from Balyasny Asset Management as a portfolio manager. In April it hired Alessandro Gren, a former vice president in J.P. Morgan’s natural resources group, as an analyst.

As we noted in April, figures released during a gender discrimination case being brought against Point72 by a former HR executive suggest the fund pays very well indeed. Senior recruiters there can allegedly earn $700k+ and 80% of bonuses are reportedly paid in cash.

““

A record 19,920 investment professionals quietly celebrated at their desk Tuesday morning when they received emails indicating they had passed the third and final level of the CFA, meaning they are a fairly simple verification step away from earning their charter. For the 44% who failed – along with the roughly 29k people who passed Level II – it will soon be time to start thinking about next year.

Like the other two exams, Level III will include some brand-new material in 2019. The CFA Institute gave us a sneak peek at the roughly 9,000 pages of curriculum. The good news for Level III candidates is that you won’t be facing any questions on fintech, cryptocurrencies and blockchain like those a step or two down the ladder. The bad news is that the new material is part of the infamously-difficult ethical portion of the test.

The new reading, covering the concept of professionalism, appears to have been added as a response to the ever-increasing scrutiny facing investment professionals – from the media, clients and the general public. The CFA Institute references a 2017 study that found “the largest-ever drop in trust across the institutions of government, business, media and non-governmental organizations,” with financial services ranked as the least-trusted sector that was studied. To counter the current perception, firms likely pressed the CFA Institute to go beyond ethics to include material on acting like a professional.

Below are four practice questions on professionalism provided by the institute. On the surface, they don’t seem all that difficult, though the answers may not jump out at you. How would you fare? Click here for the answers along with a short explanation, or follow the link below the questions.

1. High ethical standards are distinguishing features of which of the following bodies?

A: Craft guilds

B: Trade bodies

C: Professional bodies

2. Fiduciary duty is a standard most likely to be upheld by members of a(n):

A: employer.

B: profession.

C: not-for-profit body.

3. To maintain trust, the investment management profession must be interdependent with:

A: regulators.

B: employers.

C: investment firms.

4. When an ethical dilemma occurs, an investment professional should most likely first raise the issue with a:

A: mentor outside the firm.

B: professional body’s hotline.

C: senior individual in the firm.

Click here for the answers. You can also check out the nine new crypto-related questions we published last week that will be part of Level I and Level II.

Follow @BeecherTuttle

““

It’s not just Tadhg Flood. – Deutsche Bank’s co-head of global financial institutions group (FIG) banking might be the latest to leave (for Centerview Partners) but the ongoing outflow of senior talent from Deutsche Bank suggests his exit is symptomatic of a trend.

As we’ve noted several times this month, exits from DB seem to be gathering pace. Flood’s FIG team was fragmenting even before its co-head evacuated: Claire Brooskby, Rainer Polster, and Kris Triggle, all London-based MDs on the FIG team, have also quit voluntarily in the past month. In the U.S., insiders point to an exodus of senior staff from the U.S. risk and regulatory team, one of the most recent of whom is understood to be Andres Oranges, the former chief operating officer for liquidity risk management.

Those who leave Deutsche are finding jobs elsewhere. Darren Campili, a former managing director on Deutsche’s shrunken hedge fund team, turned up at Barclays in July. Tomas Rosengren, a former director in synthetic global equities prime finance, joined SEB in Stockholm this August. His colleague, Andrew Townend, is understood to have gone to HSBC in June.

Deutsche Bank is a repository of talented staff; rival banks are making the most of it.

Deutsche bankers’ realization that they can go elsewhere has the potential to cause a headache for CEO Christian Sewing as he attempts to get costs below €23bn for 2018.

As we noted earlier this week, Sewing’s Deutsche must spend no more than €10.8bn in the second half if it’s to meet its hard €23bn cost target. However, in the second half of 2017, Deutsche spent €6bn on compensation alone as it attempted to bolster its bonus pool after it failed to accrue bonuses in the first six months of the year. That move helped finish off former CEO John Cryan and Sewing has promised not to repeat it. During the bank’s second quarter conference call, CFO James von Moltke said the bank is instead accruing bonuses on a rolling basis for 2018.

And yet, the numbers don’t seem to add up. Deutsche Bank’s bonus pool for last year was €2.2bn, most of which was accrued in the second half as the bank poured money into bonuses in the final quarter. But Von Moltke said in July that the bank only accrued an additional €100m towards bonuses in the first half of this year.

The implication is that Deutsche either needs to again funnel money into bonuses between now and December, or to cut a lot of heads, or to cut incentive pay. The first option appears precluded by Sewing’s cost target, making the second and third options seem likely. Heads are most certainly rolling, but front office bankers who survive still aren’t convinced of Sewing’s promises to pay. Hence the growing trickle of senior staff to rivals bearing cash…

““

Morning Coffee: J.P. Morgan confirms the hottest new skill in finance. Tips on landing the dream job in venture capital

Meanwhile

Have Goldman Sachs, J.P. Morgan and Morgan Stanley become a breeding ground for Google?

London bank wants candidates in Frankfurt and Paris to compete for Brexit jobs

Barclays inexplicably parted company with its U.S. head of equity trading

Why technologists in banks think traders are arrogant and overpaid

Paranoia erupts as some CFA test-takers get results prematurely

“Singapore just doesn’t have decent banking jobs. So I’m applying to Hong Kong instead”

Morning Coffee: The bitchy world of the bros who work in hedge funds. Goldman Sachs employees’ lesson on being human

Meanwhile:

If you work in an investment bank, activist investors are nothing to be afraid of

The small things millennial bankers do to annoy hiring managers

J.P. Morgan’s ex-chief data scientist didn’t stay long at Cerberus then

Yet another big-name equity derivatives MD changes seats

This is how much junior bankers spend on their suits

Dressing for McDonalds, filing $30k expenses, and other stupid mistakes made by bankers in Asia

Singapore fling

One night in Bangkok

Fries with that?

Trading floor joke gone wrong

Missing in action

Lost in translation

Friday faux pas

Standard Chartered’s hottest Hong Kong tech team has been hiring

Morning Coffee: Big Four firm offers easy life to new recruits. Hungry bankers find new way to get fired

Here is how much you’ll earn working for SoftBank’s Vision Fund in London

Point72 poached a junior Citadel trader and a junior RBC analyst

The new questions you’ll need to answer to earn a CFA charter

Click here for the answers. You can also check out the nine new crypto-related questions we published last week that will be part of Level I and Level II.

Fearful for bonuses, Deutsche Bankers are finding other options

Meanwhile

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Click here for the answers. You can also check out the nine new crypto-related questions we published last week that will be part of Level I and Level II.

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