Many of my friends and colleagues are employed on Wall Street and this article is accurate. It is now expected that over 40,000 people in the NYC financial sector will be seeking new jobs. Bill Clinton was right in saying “Wall Street as we knew it is gone.” One of the most distressing factors is that the current crisis is global. Almost 70% of our growth in the last quarter was through trade, and if other nations are in a recession they will not be able to buy our products.
By VALERIE BAUMAN, October 26, 2008
ALBANY, N.Y. (AP) – Bankers and brokers looking to escape the financial meltdown are scrambling to relocate their families, possessions and rarified talent far from Wall Street to places such as Florida, Chicago, Milwaukee, Virginia and Asia.
Travis Lacey left investment bank Jeffries & Co. and Wall Street behind in September to work for Baird in Chicago. He also left behind the nagging sense of worry that had plagued him since his company had started announcing layoffs earlier in the year. “Anyone in that environment, you never know what’s going to happen,” Lacey said. “There are a lot of good bankers that unfortunately are at the wrong place at the wrong time, especially in New York.” Corporate headhunters say Wall Street’s malaise will lead to a permanent talent loss for New York. It could help small boutique firms become bigger players with employees they would never have been able to lure from the city long-regarded as the world’s financial capital.
“We’re definitely hiring,” said Robert Escobio, chief executive officer of Coral Gables, Fla.-based Southern Trust Securities Inc., a broker-dealer and investment banking firm. “Right now we have the capital, and right now we’re looking to expand. And I think that’s what a lot of boutiques are looking to do, too.” Escobio said in the past few months, one out of every four or five resumes comes from top Wall Street firms – compared with about one out of 100 in years past.
Former Wall Streeters also tend to bring clients with larger net worth – another potential long-term blow to firms trying to recover from the meltdown – so boutiques and middle market firms stand to reap the profits. In turn they deliver something that’s currently elusive on Wall Street: stability. Jobs in the financial sector can pay anywhere from $100,000 to well into the seven-figure range depending on location, experience and the size of a firm, said Kimberly Bishop, vice chairman of Slayton Search partners, a Chicago-based headhunting firm. “There’s some talent available to some companies that wasn’t available before,” she said.
Wall Street workers who are thinking about relocating need to be flexible about income, Bishop said. Some junior Wall Street workers may be able to get more senior positions in smaller firms, getting comparable or better pay. But many more will make less while benefiting from a cheaper cost of living outside of New York City. “They are going to make less, most of them,” said Kurt Kraeger, the managing director of the New York Office of Robert Walters headhunting firm. “Even before this (economic downturn), the same type of positions overseas, let’s say, did pay about 20 percent less than you would make here … the people who go to smaller firms, often times the bonuses are smaller.”
New York is the top paying state for personal financial advisers, with an average salary of $131,660, according to the U.S. Bureau of Labor statistics. Colorado followed, paying an average of $119,590, then Massachusetts, with an average pay of $116,170, according to the 2007 occupational employment survey. Idaho was the lowest paying state for financial advisers, paying an average of $50,980. West Virginia, North Dakota, Alaska, Nebraska and Kentucky all follow, paying an average below $60,000 a year for the same job.
Middle market and boutique firms are also appealing because they offer increased job responsibility and freedom, said Peter Kies, a managing director at Robert W. Baird, a Milwaukee-based middle market firm. “As every round of cuts occurred, we got an increasing flow of resumes,” Kies said. “You can have a Wall Street kind of experience and live in Richmond, Milwaukee or Chicago.”
Baird has seen roughly 50 percent more applications from Wall Street than they received last year, he said. European and Asian banks are also seeing the abundance of workers as an opportunity to strengthen their position in the U.S. market. “I’m noticing that people are willing to work places that they would have hung up on me if I had suggested it a year ago,” Kraeger said of his headhunting work.
More bankers are willing to go to Asia than ever before because it is still viewed as an emerging market, said James Constable, owner of Albany Beck Consulting, an English headhunting firm that places financial workers in jobs from London to Singapore. “Banks (in New York and London) are not looking to add to their work force in the short term,” Constable said in an e-mail interview. “This means that the volume is down, so instead the banks are opting to hire one senior candidate rather than a number of more junior ones.”
So far this month, Albany Beck has received 38 percent more resumes from Wall Street candidates willing to work overseas than they did in October of 2007, Constable said. New York Comptroller Thomas DiNapoli expects 40,000 Wall Street jobs could be lost by the end of the year. So far he said 13,200 people have lost jobs in New York’s financial sector since a year ago.
While some boutiques and middle market firms were hit hard by the economic downturn, larger banks had bought much more of the toxic mortgage-backed assets at the heart of the meltdown.
While headhunting to link new securities jobs with Wall Street casualties is one of the few growth industries these days, it’s not easy, said Robin Judson, managing director of Smiths Hanley Associates LLC, a New York City hiring firm. The finance job market is flooded with highly qualified executives and bankers, but “there aren’t enough jobs to go around,” Judson said.