City dealers strike gold

Press, 8 February 1986, Page 21

City dealers strike gold

By

ROBIN CHARTERIS

in London Annual salaries of SNZSOO,OOO and more are being offered in the City of London. And here, in one of the largest financial centres of, the world, “Golden Hallo” payments of up to £500,000 (SNZI.3M) are replacing golden handshakes as career „ currency. K It is all because finance firms are in a great rush to attract expert Stock Exchange dealers and analysts in preparation for the “Big bang” in the City in October, when changes in Stock Exchange rules allow the creation of Wall, Streettype brokerage houses. No fewer than 45 big new investment banks are being set up by British and foreign banks which have bought out Stock Exchange firms of jobbers and brokers.

Head-hunting firms are now looking for top staff to man them. Few are available, hence the poaching of skilled dealers and investment analysts from existing businesses. Dealers in Government securities markets are the principal targets. They are being offered salaries of between £lOO,OOO and £200,000 ($NZ260,000 and $NZ520,000) as well as

signing-on payments of up to £500,000 in cash as an additional inducement

At present, 80 per cent of the Government securities market is created by three leading firms of jobbers, with half a dozen smaller firms handling the remainder. < < • %'.

Twenty-nine of the new investment banks will be primary dealers in these securities after the? change to the Stock Exchange rules takes effect in October.

The head-hunting operations and high salaries being offered are attracting growing criticism.

The chairman of Barclays Bank, Sir Timothy Bevan, said this week they were bringing the city into “political and social opprobrium.” Another critic of the high salaries said: “The philosophy behind them is that, if a dealer can generage £3M profit a year, he is worth a £200,000 salary and £500,000 as an inducement to join the firm, but not everyone agrees with this.”

A Bank, of England questionnaire completed by the 29 new firms that will handle Government securities shows that they are expecting a major increase in the market to at least twice its present volume.