Survival: How to maintain a career in finance when the market turns
Roy Cohen has seen a few cycles. As vice president of Wall Street, he was present during the stock market crash of 1987. He was there for LTCM and the Asian crisis. And he was a career coach at Goldman Sachs in New York in 2008. If you want to survive what may or may not happen in the fourth quarter of 2022, Cohen is well-placed to offer advice.
His key to survival? Prepare the ground. “If it’s the end of the year and all you’re thinking about is how to keep your job and get a promotion, then good luck,” Cohen says. “You have to build your reputation and your network over time.”
If the banks make cuts after Labor Day as Ken Moelis predicts, Cohen suggests you act now to establish the factors that could put a target on you. Don’t go to HR for these, he says: they won’t be upfront. Go to your colleagues and managers, to the people who work with you and for you. “You have to come out with this message,” Cohen says, “- I really love what I do, I’m determined to succeed and I want to stay in this role. Do you have any recommendations on what I can do to improve? ”
As we noted earlier, senior banking executives don’t hold back when it comes to developing their own accomplishments. Goldman Sachs CEOs have never had a problem describing themselves using superlatives. If others call themselves “amazing”, do you want them to be called just “good”? Lay the groundwork now.
The other adjustment to be made upstream concerns personal expenses. A financial adviser who spent a decade working as a trader for US and European investment banks said getting personal spending under control was key. “The biggest mistake people make in banking is assuming their income is going to grow exponentially,” he tells us. “They start making £100,000, that goes up to £1million in ten years and they increase their personal expenses accordingly. They then find themselves in an extremely difficult position when their role is terminated.”
Don’t get used to high expenses. “Once you are used to traveling in business class and staying in five-star hotels, it becomes extremely difficult to go downmarket,” explains the trader. “You’re stuck in high spending habits and not saving or investing enough for the future.”
If you have savings, you will have a wider range of career options when the market turns. When Shahzad Younas worked as a portfolio trader for Morgan Stanley, he saved as much as he could. “I’ve never been a big spender,” Younas said. While his colleagues flourished in private schools and big houses, Younas says he lived modestly and paid off his debts: “I had saved because I didn’t know when I would have an income next.” Those savings allowed him to leave Morgan Stanley and start Muzz, a Muslim dating site backed by Y Combinator, which he aspires to turn into a unicorn.
Retaining your job in financial services may mean making wise moves to successful jobs at this stage of the cycle (for example, from trading to digital markets to trading again). If you’re moving for impulsive financial reasons, you’ll be less able to select roles that offer longevity in both earnings and potential. “If you don’t have savings and very high fixed costs, you’ll have to accept the first thing that comes your way,” says the ex-trader. “I can only be a financial advisor now because I’m financially free,” he says. “For me, it’s a passion, and it pays off, but I also have investments that do more than support my living expenses.”
That’s the true measure of professional success, he says: “You want to be able to do what you want to do, when you want to do it. It takes planning.
Photo by Tim King on Unsplash
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