Who Cares About Wall Street Anymore? Why You Should
We’re just getting started in the new year, which means you’ve got plenty of time to think about job changes, creating a feasible budget, and other related financial and career decisions you might want to make in the coming months. Depending on your situation, some of those decisions could be impacted by the economy at large, or by how certain industries are performing.
On a day to day basis, Wall Street might seem like thousands of miles away, perhaps literally and in terms of how relevant it is to your life. But by taking a look at general expectations for the financial industries in 2016, we’ll also get a good idea of predictions for the economy at large, and how that could impact your life.
Bloomberg compiled a list of the eight most in-demand jobs on Wall Street in 2016, many of which can tell us a few things about how the economy as a whole could perform this year. If you work in some of the industries mentioned, your job could look very different by the time we’re welcoming 2017. In other cases, you’re more likely to be affected by a few price changes on certain products, or shifts you’ll see your company start to make. In any case, it’s worth taking a look at these jobs, even if you’d rather have nothing to do with the wolves of Wall Street in your typical routine.
1. Oil and gas bankers
You might not know much about the oil market, besides the term “OPEC” and the fact it’s been a little cheaper to fill your gas tank in the past few months. It’s great for your wallet, but not so wonderful for companies like Chevron and BP that are trying to make a profit. In order to stay afloat after a year or so of dropping oil prices, we might see oil companies begin to merge or consolidate on a larger scale.
“When an industry blows up, you usually get a couple of really good years,” Brian Foran, a partner at Autonomous Research LLP, told Bloomberg. “It’s similar to banks in 2008 and 2009, when you had some of the biggest acquisitions ever and it was phenomenal for financial institutions bankers.”
The U.S. Energy Information Administration expects a slight rebound on crude oil prices at the beginning of this year, but nothing that will spell significant relief for oil companies. As a result, we’re likely to continue to see favorable gas prices at the pump, but hear more about the woes of the companies selling it.
2. Restructuring bankers
You might be able to make a little bit more money with rising interest rates thanks to the Federal Reserve’s recent shift away from rock-bottom base rates. But companies won’t want to pay the higher interest associated with that, often bringing restructuring into the conversation. That coupled with debt and rising defaults means people working at restructuring desks will have plenty on their plates in 2016. One analysis says business could increase by 24% this year.
3. Rates traders
Raising interest rates is one indicator the Federal Reserve is tightening its monetary policy, while the European Union is loosening the reins on theirs. Major central banks didn’t differ in strategy in the years following the financial crisis, but recovering economies means we’ll see some differences in financial ideologies.
“You finally have an outlook where major central banks are going in different directions,” Foran told Bloomberg. “That just creates a lot of activity.”
You might not be getting a 15% increase in billable fees, like some rates traders expect to in 2016. But this does signal more confidence in the economy, meaning your chances to succeed increase as well.
4. Electronic trading personnel
Banks aren’t as good at cross-trading and getting you the most money possible, when compared to hedge funds. But they’d like to be, and they’re making moves to give you better investment options in the coming years. To do this, they need to hire traders equipped to manage multiple assets and markets, all on electronic platforms that weren’t used just a few years ago.
If you don’t have the funds to put your money in a hedge fund, or you’d simply rather keep your money in the local bank you’ve always trusted, there’s a good chance you’ll still have options to see your money multiply. Those traders could be getting a 25% raise if they jump from a hedge fund to a bank, Bloomberg reports, which means they’d better be earning that paycheck by getting you more bang for your buck, too.
Banks don’t want to be the equivalent of taxi cabs, who get left behind when Silicon Valley startups disrupt the system and use technology to offer consumers better alternatives, a lá Uber. As a result they’re starting to direct more resources toward automated investments and technology related to bitcoin’s blockchain, a software ledger that can speed up financial transactions, Bloomberg explains.
“Banks are really aggressively hiring IT and data-management to do anything around blockchain” and other financial-technology areas, said Robert Dicks, who runs the human capital practice for financials at Deloitte Consulting LLP. “They look at this as part of their infrastructure, part of the capabilities they need.”
What does this mean for you? Whether you’re in the banking industry or not, it might finally be time to learn a little bit about what bitcoin actually is, and how it works.
6. Corporate finance
Last year saw a record-breaking number of mergers and acquisitions worldwide, a value of more than $4.304 trillion at the beginning of December – a figure eclipsing the previous record of $4.296 trillion in 2007. This included Pfizer’s $160 billion takeover of Allergan, and Anheuser-Busch InBev’s $110 million acquisition of SABMiller. Fortune doesn’t expect another record-breaking year in 2016, but believes there’s a potential for other big names to enter the M&A books – Macy’s included.
Behind every takeover is a room full of Wall Street execs taking their cut, which is why they’re expected to have a good year in 2016.
7. Junior employees
You’ve got to start somewhere in any career, and Wall Street is no different. Firms cleaned house and stopped hiring in the wake of the financial crisis, meaning there’s plenty of spots to fill for analysts, associates, and vice presidents. If you’re looking to break into the financial world, you’ll still have plenty of fierce competition, but your chances could be greater as firms look to restock their ranks with positions toward the bottom. You won’t be competing with senior-level management for those roles, but you’ll have plenty of time to make a name for yourself before you come up for a major promotion.
8. Wealth management
We know baby boomers are requiring ample attention from wealth managers as they enter or prepare for retirement, but that’s not the only reason there’s a demand for them. Younger people are facing an enormous load of student debt payments their parents might not have dealt with, all while they’re trying to save for a down payment on a house and for their own children.
It’s never too early to ask for financial advice, no matter how much money you have in the bank. For wealth managers there’s always more money in large accounts, but many banks are shifting away from just depositing your checks to offering comprehensive services, including wealth management. Even if you’ve got a starter nest egg, you’re going to be able to find a reputable person to give you advice about how to reach your financial goals.