Russ (Finance, Anonymous) Bond Sales, Major Investment Bank

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This particular salesperson asked to be anonymous from the start (in fact I never knew his last name), as those were the only terms under which he would be candid about financial sales, and the nature of his payment and former employers. This is such an insightful interview, and this information so rare elsewhere, I was determined to publish it regardless.

For candid insight into the cyclical nature of bond sales, or how well paid financial sales can be, or a comparison of selling bonds to iPhones, you can’t do better than this.

Jamie:  Russ, what have you found most fulfilling about your sales career thus far?

Russ: I think a relationship-building on a successful basis. The short term and big wins are the most exciting part of the job, as well as knowing what you have generated in terms of revenue, rather than relying on a semi-annual review from your boss.


Jamie: How did you get into sales originally?

Russ: I was always guided that the best way to make more money was to get closer to the money.

If you’re in any support role function, no matter how successful the business, there’s only so much you can make.

If you want to get paid on the growth of a business, you need to be responsible for it.

Jamie: In the finance industry specifically, how are salespeople people treated and compensated compared to their non-sales peers?

Russ: I think currently, and I call it current maybe the last five years, sales is probably the second best-compensated job in finance next to trading and the true risk-takers. If we go back 10- to 15-years ago, when there was tons of new issuance, structured products and a lot of leverage in the system, salespeople could make multiples of traders. It’s a matter of deciding at what point of the cycle you’re at. Currently, you’re in a new issue cycle, where companies are refinancing. So, a lot of the money of the pie needs to be split up, between origination and traders. I think if there’s a credit shock to the cycle, which does come historically, every five to 10 years, and there’s no new issue, then the money that would normally go to those people will shift back to sales who are generating revenue on secondary trading.


Jamie: If you’re going into financial sales and sales of fixed income products, you should expect your earnings to be cyclical?

Russ: Absolutely. I think there’s always this story, everyone gets caught up whether you want to be a hedge fund guy, or a trader or a salesperson that we all focus on the top 5% to 10% stories of how much you can make. But I’d say 90% of the people, no matter how good you are, will just be relying on the cyclical nature of the business, as good of a salesperson you can be you can’t force a trade if the clients don’t want to trade. However, if they do want to trade, you can force them to trade with you versus other people.


Jamie: How can you be good at convincing people to trade with you rather than other people?

Russ: The service you’re providing would be analytics and liquidity, but also a technical picture and keeping them abreast of any situation.

Instead of thinking of yourself as an employee of the firm you work for, you should think of yourself as an employee of your client, and their representative at your firm.

Anything you think they would be interested in, we should be posting to them constantly, which is a value add. Anything you think they would be uninterested in, by knowing them well, you should not be wasting their time with, which becomes a service in itself. A lot of the complaints are here for your clients who are covered by less experienced or junior people and the time they waste. If there are 10 to 15 counterparties they could use, they’re getting called by the others all the time and you don’t want to be in the 15th call.

It’s your idea of how to value their time and how do you really monetise that? Whether it’s a scarcity value of calling them once a day with the stuff that you think is interesting. Or only calling them once a week, depending on their activity. We should meet in providing your bank’s resources, whether it’s analytics or structuring to bring them up to speed on the trade to feel that if they are going to move forward, they owe you the first look.


Jamie: You mention the technical aspects of the role. Does fixed income sales require a technical background?

Russ: I think so. I have a strong technical background in both trading and analysis. I think that was the value I added for three years, to get an account plus and feedback, that they loved the way they were being covered. Whereas many career salespeople don’t have a technical background and struggle to understand how to do their job. I think that’s very rare.

I think the best salespeople I have seen can look through a document themselves and decide to trade, and decide whether it’s good or bad before they pick up the phone. Instead of having the business model of throwing everything in the wall and see what sticks, time is scarce. I think you need to develop some of the numbers depending on the business to decide. If it’s a good trade before you say it’s a good trade and understand that you have worthwhile opinions, then it can create value over time if you prove it.


Jamie: How long does that kind of knowledge take to build up?

Russ: I would think, three- to five years to have a basic to advanced understanding of relative value across an asset class as well as just globally. Obviously, anything a trader is long, he wants to sell in short, he may want to buy so you have to have your own opinion versus just repeating what you’ve heard; a client is not dumb, you have to understand very quickly, whether you’re just repeating what you heard in the morning meeting, or whether you truly have a view and they start to value your opinion over time.


Jamie: So a big part of your role is coming to the table with something they haven’t thought of before or something unexpected?

Russ: It doesn’t need to be something they haven’t thought of. But my view is that I’m a filter and by getting to know them over time, I’m able to filter out what’s important to them and make the phone call, if it’s a five-minute call value-add by filtering out what’s going to waste their time, versus the other institutions that were calling them – the stuff that they’ve told them three times don’t interest them. Now, maybe I didn’t have the pressures at my institution to sell the same product continually. But I looked at quality over quantity, because at the end of the day, nobody works at a company for 40 years anymore.

You need to think of your sales because this is your own franchise, and whoever you’re working for, that’s just the current logo on your pay-check. But your opinion and your reputation will travel with you.


Jamie: What skills or natural tendencies do you think a person needs to go into sales successfully?

Russ: You have to have a true enjoyment of people, and you have to be totally comfortable with hearing “No” or “You’re wrong” and take it on board. But you just really need to like dealing with people because you’re dealing internally with people and selling yourself internally, and you’re selling yourself externally of what you’re bringing your institution to your client. You have to enjoy that. If you don’t like going to catch up to someone over a beer or a coffee or a meal, or talking about trades or the market with no real revenue at the end of that call, then the job’s not for you because you can’t think you’re going to sell something every day or every week to your clients.


You know, there are hundreds of books written on the 80:20 rule, how you spend your time, and who your clients are. But at the end of the day, you can’t always just be focused on those top 10 accounts, and you need to be focused on your next 10 who will become your top 10 over the next three years.

You can’t just focus on the person you’re currently speaking to, you have to think about if that person leaves their job and who’s the person that’s going to take their seat. Even if you are dealing with your top 10 or top 20 accounts, that’s 40 to 60 people, because you need three contacts at every firm you’re comfortable with talking to, so that if someone leaves or gets promoted, you have two other people there to vouch for you to the next guy that takes that seat.


Jamie: What advice do you have on that internal selling piece?

Russ: There’s never enough self-promotion. If you think people know what you’re doing, you’re wrong. Everyone’s focused on themselves and their boss and managing upwards. So you need to make sure that people know what you’re doing.


Jamie: Do you have a medium by which you’ve been successfully doing that?

Russ: There’s nothing wrong with appearing weak. Offer to have people review your ideas. That’s impressive. Or after a big client meeting, include more senior people that you call to know if you think it’s something they might be interested in.


Jamie: How well-compensated is financial sales?

Russ: I think it’s a different country by country. I think in the US, it may be on par with lots of other careers and choices, IT, technology, and real estate. In the UK, I would say it’s one of the few career choices that can make you multiples of most normal careers in the UK.


Jamie: Why do you think it is so lucrative here?

Russ: I just think it’s by the notional basis of the product you’re dealing with. If you’re a real estate broker, and I’ve never bought or sold the house here, so I can only speak to the US, but you sign a 5% contract in the US when you sell your house. If your house is $100,000, that person gets paid $5,000, if that house is a million dollars, that person gets paid $50,000. That’s the basis of financial sales here, given the amount of corporate debt, loans, and bonds that can trade hands is in the billions.

Your production of the revenue you take can just be multiples of the turnover of a standard business in the UK, and it’s nothing to do with your own skillset. You can be the most amazing car salesman, but how many cars can 60 million people – as there are in the UK -buy? Or especially, you’re only dealing with one brand, how many Porsches will you sell? The same thing at a restaurant – how many bottles of wine or expensive steaks do your clients buy? But pension managers, hedge funds, mutual funds, and all the other institutional clients that are trading billions of dollars of corporate debt, even if you only assign a 1% value to that, and then take half of it, you’re still talking about millions and millions of pounds.


Jamie: Is that the same for all asset classes?

Russ: So recently, I’d say fixed income is not a lucrative sales job in the sense that the amount of bonds traded has decreased, which is why I said traders and origination are more interesting right now in the cycle. Equities, I think have become very technology prone where people will trade in algorithms. So, a salesperson isn’t a value-add there. Investment-grade bonds within corporate bonds are becoming very electronic.

What you need to do, which is always a supply-demand equation in economics through life, is finding more technically difficult things.

So, whether instead of investment-grade that’s a high yield, instead of high yield, it’s leveraged loans, which don’t clear electronically and need a person, for distressed bonds and claims which require a lot of documentation, as well as structured credit trades that require a lot of documentation. I think your value-add is there, which then involves going back to the beginning of our conversation, the technical side of it, anyone can sell an easy product. But for the more complex ones, you become supply-demand oriented, a very few people that can do the job, thus, you can get paid more money.


Jamie: So would you recommend learning about complex, illiquid assets?

Russ: Yeah, so if in 2000 to 2008, corporate derivatives was a lucrative business which now has reduced massively in volumes. I’d say now given the cycle of debt if you expect a lot of companies to start defaulting if the interest rates rise over the next five years, distressed debt and leveraged loans would be an interesting area to focus on. As there’ll be a lot of volumes going through and it’s not something that can trade electronically. So, there will always be the need for a human relationship manager, at least for the next 10 years.


Jamie: How does your industry treat its salespeople?


I think like anything else, in a growing environment, salespeople are the number one focus of management, and in a shrinking environment, they’re the number one expense item, and they get cut from the senior level to junior.

That is why they get paid better. It’s the cycle. Like the cyclical nature of the product, there’s a cyclical nature of the job.

When it’s growing, everyone’s being hired, and you’re getting paid more to quit and move to the next job. When it’s shrinking, they would rather just stick to calling the client. So. the juniors rise in the business and get rid of a more expensive senior person.

The issue of the 2008 financial crisis was that by capping bonuses in Europe, senior people have gotten very high base salaries, which becomes a very high fixed cost. The first people to get fired in the business pre-2008, it was based on their basic salary. When they were going to fire someone, they would obviously fire the junior person, because the senior person wasn’t much more expensive. But if that senior person produced, they would get a huge bonus. Now by the nature of how the compensation structure, the senior person becomes very expensive to have around for a full credit cycle. So, they have to get rid of them, which becomes a very boom-bust type of job cycle.


Jamie: Is that driven by a bit of a failure in terms of regulation?

Russ: Hard to say. I’d say it makes businesses much more unstable in the sense that they pay severance packages as they leave. Then, two years later, pay headhunting fees to hire people back. I don’t know if that’s been correctly accounted for because corporate may pay headhunting fees where the business pays the salary. Someone else in “restructuring” may pay the severance fee. Accounting wise, it may not get captured to an analyst or someone who’s analysing the business. But anyone with a semblance of math can understand.

If the business cycle is only three years, then you’re paying someone who’s been in the business for five years, five months’ salary to leave, and then a head-hunter two months’ salary again to hire them back. You really haven’t saved that much money over time, and you’ve created instability in your business.


Jamie: So it’s a good time to be a financial head-hunter?

Russ: I would say the next five years would be a very good time to be a head-hunter.


Jamie:  How seriously is training salespeople taken in the industry?

Russ: In banking, I think it’s a learn on the job mentality. Given their focus on costs, I don’t think there is anything organised. It’s sitting next to a senior person, use your phone and pick up their line and listen to everything they say, watch and learn, and develop your own techniques. Then it’s sink or swim. If you’re not generating money within a certain period, they cut you.


Jamie: Do all banks have these sorts of apprenticeship type systems and do they accept the three- to five- years that people need to get up to positions?

Russ: I think a lot of banks have what they call analysts programs where they just recruit top candidates from a lot of universities into a central program. A lot of these people rotate two to three weeks, maybe in sales, maybe an origination, maybe in trading, maybe in analysis, and rotate around the floor. Then based on who they’ve met, and the people that have met them, try and find themselves a permanent seat. There is somewhat about a two-tier hiring process to find your role, and people are invested in making it a success. That said, as recent headlines in the papers proved, they’ve then made decisions to cut the business and then fire those people. If your plan is to go work for a company for five years and build yourself, that’s great. I’d say the reality is to have at least three different employers over a 10 years plan.


Jamie: What are the options outside banks for getting to a sale financial sales position?

Russ: You can start as a financial analyst, which I think is a famous breeding ground for people to learn the trade in a deeper dive and then grow yourself internally in a more stable environment and then move into sales. But at the end of the day, there’s just no secondary substitute for either learning a product by being in the analyst or trading or sales seat. You have to be close to the business to understand the true technical side of what’s going on, and you’re dealing with humans on both sides; the person you want to take the product from to sell, and the person we want to sell it to. It’s not like you’re taking an iPhone and selling it to one person; you’re selling the camera to one person, and you’re selling the looks at the phone.

You need to decide for each different client what they’re after, whether it is the yield, or duration, or coupon or dollar price, or all the other technical parts of their equation of how they want to invest, in finding them who would be interested in buying it, and then the other side, convincing the person who already owns it, that this is the right time to sell. Maybe they’ve owned it from an earlier stage, it’s time to take some profits just to reduce part of their position. Maybe it’s time for the other person to just start building a position and trying to convince both sides that now’s the right time and leaving a little over in the middle for yourself.

That’s an ongoing conversation that not all the time matches up, even if you have one side of that trade. So again, an iPhone, you go to the warehouse, pick up the iPhone and ship it, however, there might not always be the bond or loan available that someone wants to buy or vice versa. There might not be the buyer available when you have the bond or a loan for the person to sell. That comes down to things that just aren’t under your control. You have to always be willing to re-engage people that have said “no” or “yes” in previous conversations and have in your mind a reason why these things might have changed, and they should take a second look.


Jamie: What are your thoughts on the change in banking and the overall finance profession overall?

Russ: Everyone wanted to be financial salesperson pre-2008. Expense accounts are huge and unlimited. Transactional values are huge and unlimited. Commission was huge and unlimited. It was not uncommon to hear of an American bank hiring someone from the European bank and guaranteeing their salary at a million or two million dollars. You never hear that anymore. That may or may not happen again. Regulations now limit how much you can spend when you see a client, they limit how many times you can see a client. They limit what you can do when you see that client. The clients now limit how much business they can send in one direction if it’s not best price execution. Much of the fun and money that was there and attracted people to it has gone. A lot of people have left the industry, which is why I say you really need to love being involved in the business to stay in it. Now, it’s still paced maybe a multiple or two versus other jobs in the big corporations in the UK. I have to say that the next great product has not come along.


Apple was close to bankrupt in 2000- a failure, with just the Mac, pre-iPod and pre-iPhone, but that’s turned into a massive corporation. Google was a start-up search engine, and Tesla was a start-up car company. There’s always a new product involved.

What can we do to get close to it is by already being interested in it. You’re not going to suddenly wake up and say, “I want to be a vegan and sell vegan products,” because you smell money. If you do, more power to you, you’re going to be rich no matter what you do.


Jamie: What advice would you have to people who are on the outside looking in and want to be in financial sales?

Russ: Persistence, and starting early. I think there is obviously a time in everyone’s sales career where they become specialised, and that product speciality helps. But again, it’s also about luck and timing. Maybe car sales don’t look interesting this year in the UK as car sales are going down. Maybe bond sales don’t look interesting as bond trading revenues are going down. You need to decide for yourself what the next interesting product or cycle is going to be and learn about it. Again, if you’re in sales, the first sale is to sell yourself and convince the person that’s going to hire you that you’re the guy or woman for that role now.


Jamie: Do you think there’s a particular advantage in terms of gender, race, or age in the industry?

Russ: I don’t. I’m sure if you read the Financial Times or the Wall Street Journal, or the UK press recently you’ll read about the lack of women in upper pay scales or upper management or boardroom roles. I don’t think that’s an issue when hiring. I think that is just the leftover product of the 1980s and 90s of it being a mostly male business, but I worked at a business where 40% of the employees were women. I had clients where the most senior people were women.

I have not viewed it personally in my small realm of the world. Obviously, you can spin any statistics to say whatever you want. But I truly think it’s the one great thing about finance is that the best people do rise to the top. I don’t think gender or race or religion can hold you back. They may perhaps in the short term, hold you back if you’re in a bad situation. But if you truly are talented, people don’t care. People want to maximise money. If they think you’re the person that can do it, by your past experience, and if your current place is holding you back, no one’s going to look poorly on a job change in the financial industry.


Jamie: How do you mentally prepare yourself to handle the fact that you’re going to have so many jobs if you’re going to finance?

Russ: Don’ take life too seriously. Actors do it all the time, and all the world loves to read about actors, and if you look at politics, people resign, get kicked out of the board and everything else they’re doing.

It’s just the reality of the world we live in now. Your grandparents’ generation took a job and worked there till retirement. That may sound great if you’re going through a lot of job changes in your company, but to me, it sounds boring.

Sometimes, the hunt is part of the fun, meeting new people and learning new things about yourself as well. If that’s something that discourages you, and then you know right away that, that’s not the industry for you.


Jamie: Right. What advice would you generally have to aspiring salespeople?

Russ: People will be mean to you, don’t take it personally. The other great piece of advice I ever got was, if you make a mistake, sleep it off, and come back tomorrow. You’re not working in a submarine, where if you commit a mistake, 100 people just died. It’s a job where you can make a lot of money and meet interesting, smart people, and do interesting things and have an interesting day. We’re being paid to pay attention to interesting financial trends and political trends and macro trends. If those things actually interest you on a personal level, and you’re getting paid to be involved in some of your interests. I’m not saying you’re always going to have fun. But if you don’t find macroeconomics, currencies, corporate earnings, sales trends, and global trade interesting, it’s not the job for you. Because those are all the inputs to the job that you’re constantly going to have to be reading about and be on top of.


Jamie: If you had your career again, what would you do differently?

Russ: I would have started in sales sooner. I spent a lot of time on the technical side because of the credit cycle. I got caught up in a high compensating technical role earlier in the credit cycle. I don’t think it’s hindered my sales career, but I’m having a lot more fun in my sales career.


Jamie: Can you tell me about a time when you failed to make a sale, but it taught you something really valuable?

Russ: I think a lot of the failed sales in finance come down to if you have a buyer, but no supply or you have supply and no buyer. There have been times where I’ve had both sides, but both sides are just too far apart in the press. Again, you’re not dealing with an iPhone where the price is £699 unless you’re going to wait a year until it’s old technology and it’s £499. You’re dealing with things, and everyone has their own opinion of a price. It’s not stock on an exchange where you look, and there’s a price every five seconds or even currency. These are things that are semi-illiquid securities, and some people could wait for a 2% to 5% discount in price. Again, what you learn is not to try and force one side to hurry and get the trade done to ruin the next 10 years.


Jamie: Can you tell me about a specific example?

Russ: I can’t. I came from a guy who was on the buy-side, and who had 20 salespeople. I hated certain things people did. One of the benefits of my job history is I think I knew when to take the hard sell-off, and you realised it was pointless. Maybe, I could have tried one more time that got it close. I took the safer nature of, “I want this person not to be unhappy.”

I don’t think everyone’s ever going to end every conversation happy, seller, buyer, and salesperson. If so that’s great. But you really don’t want someone getting off the phone, and 24 hours later, after they slept on it feeling like you pressured them into doing something they didn’t want to do. That’s a balancing act for your own internal production you need to monitor if both sides of the trade were your clients, if it’s not, then it’s very easy to protect your client. If a different sales guy has the buyer and you have the seller, very easy to protect your account.

Again, I think some people will say, “I work for my bank, I know what’s best for my bank, or company.” I take a different sales approach of “I work for my client.” The reason these clients could pay me, be my job reference, and ask me to come to their birthday party and everything else is, I truly, hand on my heart, and they know it, have their best interest in mind. By having that protective nature, they’re going call me if all prices are equal in five places they knew they make a trade, I’m going to get the call because they owe me a favour.


Jamie: Did that service mindedness that customer-centric focus, did it help you perform better?

Russ: Absolutely. I got the trades. I would be sitting there reading the morning paper not asking for a trade,

and the call would come in, “Based on today’s price, Russ, I want to execute this bond, and everyone looks the same price. I’m giving this to you because I owe you a trade or past service.” So, don’t be surprised how much people pay attention to what’s deposited in the favour bank. It’s an unspoken currency. But on days when you think it’s going to be slow, it comes through and pays you.


Jamie: Can you tell me about a time when you know the specific skills and knowledge have helped you to make a sale?

Russ: It is just about experience and getting lucky. It’s a beautiful business, maybe the main person is out, and you’re dealing with the backup person at the account, and you’re not being a dick, or trying to squeeze them because they’re junior, and help them through the process.

When their boss comes back, they get that feedback. The senior person calls the next day and thanks to you. Perhaps there’s someone else, maybe another institution was trying to be a little more opportunistic with that junior person. Suddenly, you go up three notches on their league table of people they want to deal with going forward. You can’t put a price on that. Maybe your employer can, but you can’t because that’s going to travel with you. No matter who you’re working for, no matter how many years go on. You know, my father was in sales, and that was one thing he always told me in life.

When I was a little kid, there was just this only one thing that you take a lifetime to build and five seconds to destroy, and that’s your reputation. So, if there’s one thing you’re going to protect, it’s that: every day and all day long.










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