Life after FX: The sky is the limit

By:
Farah Khalique
Published on:

Foreign-exchange professionals are feeling the brunt of banks’ deep cuts to sales and trading desks, but don’t get disheartened: the shake-up of the industry offers exciting new opportunities.

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Don't despair: there are many options after leaving FX – even opera

"Life after FX? I’ve heard of people who just end up driving taxis." Perhaps not the most heartening response from a former FX trader, but it is a bleak reality for some individuals.

A job in banking has never been a job for life – the sector is notoriously cyclical and performance-driven – but the transformation of the foreign industry, coupled with never-ending regulatory probes, is leaving some to ponder their options.

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The good news is there have never been more options available for those that quit the bank, ranging from traditional career paths such as joining a brokerage firm, to newer roles from becoming an expert witness to setting up your own business.

So you’ve left the bank. Now what?

Recruitment consultancy has traditionally been a straightforward, obvious choice – it allows you to continue to work within the network of clients and colleagues you have built up in the industry.

Lisa Hinton used to work at Goldman Sachs in FX sales; she is now a headhunter at search firm Shadowhound.

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Lisa Hinton,
Shadowhound

She describes it as a "logical move" that can be lucrative, but warns that, as with the rest of the industry, it depends on markets, performance and the hiring cycles of banks.

Another headhunter warns it is a tough gig, as there are "far fewer jobs now".

He says: "The options are mostly to start up electronic FX brokerage houses or transaction [cost] analysis (TCA) firms. Some have gone to retail or institutional electronic brokerage businesses or small e-payment businesses."

The concept of TCA has caught on in FX, as apprehensive asset managers now analyse their currency trades to see if they paid a fair price. Some successfully sued their custodian banks for over-charging on these transactions, settling for tens of millions of dollars.

TCA firms – such as FX Transparency, which was co-founded by a former FX sell-side and buy-side duo – offer these services.

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Oliver Jerome, BestX

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Peter Eggleston, BestX

Oliver Jerome, former head of emerging markets FX at Morgan Stanley, and Peter Eggleston, former head of the bank’s quantitative solutions and innovations team, are the latest to set up a TCA shop, BestX. 

Both took voluntary redundancy from Morgan Stanley.

The probe into custodial banks was just the start of the industry shake-up, though. Since regulators started investigating the inner workings of FX dealers, notably the 4pm fix, there has been demand for a new role – the expert witness.

Call of the courts

Expert witnesses are hired as consultants to share their specialist knowledge and can be formally assigned to testify in court, should a case go all the way.

Traders who have been fired for misconduct are not disappearing into the shadows – rather, they are taking the bank to court to argue their conduct was 'business as usual’.

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Stuart Murdoch,
Turing Experts

Stuart Murdoch worked in investment banking for 15 years, where he ran European divisions in FX, interest-rate derivatives and debt origination. Having left the industry in 2007, the role of expert witness was drawn to his attention by a lawyer as something to consider.

"I never looked back," says Murdoch. "Lawyers desperately needed experts to advance their cause within complex cases and there was a real lack of supply. Increasingly, judges wanted practitioners who had been "at the coal face", specialists not generalists, familiar with market practice."

He co-founded Turing Experts, which primarily, but not exclusively, defends banks. The job can pay well and is satisfying, says Murdoch, but it is not for the faint-hearted. Expert witnesses have to stand up in court and be thoroughly cross-examined.

"The nature of cross-examination is to take you off course and discredit you. If you are fragile, the report weak and the expert is ill-prepared, then you leave yourself open to a bad day in court… one bad day in court is your last day."

Expert witnesses need to be able to write cogently, think under pressure, have a strong technical understanding of their asset class and plenty of experience. Remember the Asia crisis? The Russian crisis? The credit crunch? All this will stand you in good stead, and satisfy a judge you can be relied upon as an expert.

New platform

The lasting impact of these regulatory probes is that people want to trade on transparent platforms that show exactly how much they are charged, hence the rise in peer-to-peer FX platforms, such as Kantox, TransferWise and Midpoint.

Former Barclays heavyweight Rich Ricci has even invested in freemarketFX and joined as non-executive chairman.

These platforms – dubbed fintech disruptors – offer a potential career path for those that want to maximize their knowledge of the industry and offer an alternative solution. A number of these platforms have sprung up; it remains to be seen which will succeed in the long term.

And now for something completely different

However, some people just want to leave the industry altogether.

Kevin Rodgers was global head of foreign exchange at Deutsche Bank until June 2014. His book on the computerization of banking will be published by Penguin Random House in 2016.

Kevin Rodgers

Kevin Rodgers, Deutsche Bank’s former global head of FX, is now indulging his love of opera singing on the stage.

Heidi Golding quit Goldman Sachs in 2012 to go from e-FX sales to hiring out luxury mobile toilets. She started off small with about six units and now has more than 20, and also hires out shower trailers.

"I had no background in mobile toilets, but I saw a viable opportunity and went for it," she says. "I would say be open to the opportunities that present themselves to you."

Golding saved up whilst working at Goldman Sachs and secured private funding from an asset finance company for her business, Mobile Thrones.

"There are definitely transferable skills – working at Goldman Sachs helps you to be committed, focused and organized. There are a whole load of skills that are transferrable down to people management and client liaison, and how to generate new business."