As I started reviewing my previous blogs, I realized that all I frequently talk about are bankers and attorneys. The reason being that these are the professionals we are consistently representing. However, this week I saw a new trend occur. I saw firms reaching out to me looking for not only traditional public finance bankers or bond counsels, but traders, underwriters, institutional salespeople, and even a trading assistant. It had been some time before any firm asked me to start looking for these positions. If only one firm reached out to me, I would have said this was an anomaly. Yet as of last week three separate firms of varying sizes reached out and asked for our assistance. Is this a new trend? What can we make of this demand for traders and salespeople?
When firms in the past have asked me to locate institutional salespeople, the problem I consistently have is account coverage. As I am sure you are familiar, everybody covers the Nuveen’s, BlackRock’s, PIMCO’s & Franklin Funds. These are your traditional tier one accounts. In the past, firms would say, “We are only interested in Tier 2 or Tier 3 accounts. We also are not interested at all in traders and/or underwriters as we are well covered in that area.” However, this week was different. Calls came in for not only Tier 2 and Tier 3, but also Tier 1 accounts. This is rare. This was not only on the taxable side but also on the tax-exempt side. It makes you wonder if what everybody was projecting about the electronic trading platforms, where there would be no need for traditional institutional salespeople, is not necessarily true. If I look back two or three years, that was the trend. But, with this new information I must believe that the salesperson’s role in selling debt products is more alive than ever. What else do we know about traders and salespeople?
Let us address the trading issue. Many firms will treat sales and trading as one. There are some firms that do not treat a trader as a salesperson but strictly as a trader for the firm. There are numerous types of traders on the debt side, which can be municipal traders, taxable traders, and agency traders. If we go to the equity side, we certainly have stock and corporate bond traders. As we only deal with the debt side of the house, I was surprised to get some calls this week where banks were looking for traditional municipal traders, agency traders, and even a corporate trader. Being curious as to what was causing this uptick in the market for these individuals, the firms responded to me that the need is more prolific than ever. As I am not an expert on the desk, my next question dealt with the compensation of traders and salespeople.
Compensation For Traders And Salespeople
I would have thought that both these positions would have been straight commission or a small draw. I was surprised to hear this was not the case. The market had shifted from that model to almost a salary type model. I was informed that a trader traditionally would get anywhere between 20 to 40% of their income in a salary, and the remaining monies would be in the form of bonuses based on their production. Salespeople were being offered salaries and draws for the first couple years. This would entice them to bring their book of business to a new firm and help them with the ramp up period as they move their accounts. Since we are now actively looking for traders and salespeople as well as a trading assistant, if you know of anyone that is looking for a new position, please have them reach out to us as we have numerous firms looking to fill these roles. Also, public finance bankers and bond counsels continue to be in demand.
If you would like to discuss your options, please reach out for a confidential conversation at 760-477-1284 or email at [email protected]. He can also be reached on LinkedIn. Subscribe to our monthly newsletter here, which is a compilation of our weekly blogs, so you never miss one. You can find our listing in the “supplier and services” section of the Red Book under the title of “executive recruiting”.
About Harlan Friedman, JD & Founding Member, H. Friedman Search LLC. Harlan is a thirty-year veteran Public Finance Banker turned recruiter who specializes in the placement of all levels Public Finance Bankers, Healthcare Bankers, Municipal Financial Advisors, Compliance Officers, Issuers, and Bond Counsels.