It’s easy to fill a room in New York, particularly if there’s networking.
In the lead up to Christmas last year, the Australian American Association held some holiday drinks at the office of the Australian Consulate General New York on 42nd Street, from which there’s a brilliant view of the Chrysler Building.
Veteran expats recall that in 2007, events of this ilk were packed with young hotshot bankers and lawyers, mixing it with older versions of themselves who had come over from Australia with a plan to return home in five years, only to win a promotion and never look back.
Some young Australian elites are still here, but in much smaller numbers. You’re far more likely to find our more recent Commerce/Law graduates in New York around December in the Australian NYC Bar on 38th Street. Late on Christmas Day, these travellers packed out the place to receive a mighty gift from the time zone gods – the first delivery of the Boxing Day Test at 7:30pm. With a month of annual leave up their sleeve, they are attracted by cheap US dollars and maybe some whisper of a job opportunity. They’ll find the first in fistfuls, but not the second.
The Australians on Wall Street that survived that GFC are almost universally formidably qualified and experienced. In many instances the word ‘experienced’ doesn’t seem adequate.
James Boland has worked as a financial adviser for Merrill Lynch and Morgan Stanley; the former of course now has a new home at Bank of America. He recalls the subprime crash as an "out of body experience,” incomparable to anything before it.
"In 2008, a lot of people kept their adviser even though their portfolio was down,” Boland recalls. "It’s because their adviser was there, talking to them on a daily basis. They were hand holding them through that whole crisis. The people who lost their clients were the ones hiding under their desk and not returning their clients’ calls.”
Boland also confides that much more was lost than dollars, clients and jobs. As the extraordinary pressure that only a 7,500-point reversal on the Dow Jones can produce was unleashed, he witnessed a suicide. It’s the most violent reminder that crashes of this magnitude destroy so much more than ‘value’.
And the crisis that brought all this to bear is not over yet. Between the complicated political jostling and enormous debt burdens that frame the ‘debates’ in Washington and Brussels, Boland says this is no time to relax. "I’m very concerned right now. I’m very concerned for my clients,” he warns.
As demonstrated aptly by MF Global and its former superstar chief executive John Corzine, it’s a bad time to be dialling up the risk. But while the American political classes continue to wage war about whether Wall Street ‘gets it’ when it comes to risky investments, crucially investors do.
"If you took a scale with 1 being the most conservative of investors and 10 being the most aggressive, people who were a six or a seven are now a three or a four,” says Boland.
It’s a change that’s been witnessed by another Australian, Jeremy Norton, co-founder and managing principal of financial technology company CAIS Group. Norton adds that US investors haven’t just become more attuned to their risk profile, but how it's framed. That’s having an impact on their advisers and it’s something Norton is taking advantage of.
"What we’re seeing in the industry after '07 and ’08 is advisers are becoming less comfortable with a lot of the major banks they’ve worked with in the past,” explains Norton. After watching Bear Stearns fall, followed by Lehman Brothers, many advisers started thinking about going independent.
In fact, independence is a bit of a buzzword over here.
"There’s a lot more focus on independence, whether it’s an independent administrator, independent pricing of portfolios, independent oversight within firms, independent board of directors within firms,” says Norton. "No one’s going to rely on a hedge fund that prices their own securities or prices the fund themselves.”
The problem facing those advisers is they can lose access to the research and investment products from the major banks when they venture out on their own. Granted, they weren’t keen on these instruments to begin with, but it’s hard to sell financial advice when you’ve got no products to play with.
CAIS provides these advisers with an open platform that delivers an array of services including independent research, and funds that have had investment and operational due diligence performed by Mercer. This is a crucial tool that allows financial advisers to serve the growing need of their US clients for independent advice from a boutique wealth management firm or private bank.
To some degree, Norton has had one of those New York experiences that many of today’s Commerce/Law graduates are after. By the age of 21, he had his first Wall Street gig.
"I really did have a baptism of fire,” Norton recalls. "I started out at Fuji Bank (now Mizuho) sitting on the fixed income desk trading US treasury bonds, fresh out of university… My second job was in the hedge fund industry and I was getting there at 6:30 in the morning and leaving at 10:30 at night.”
Wall Street is famous for this work ethic and while Australians aren’t exactly known for their short days, the work practices over here are cranked up a couple of notches, as Ernst & Young Australian tax desk leader Michael Anderson explains.
"We (Australians) tend to see ourselves as reasonably laid back and timeliness is important but without quite the precision. So if someone says that they’re meeting at 9:00am, in the US it means starts at 9:00am. And to get there at 9:02am is to be disrespectful to the host.”
Those young Australians sinking back a few brews in the early hours of Boxing Day would do well to remember that annual leave works differently for New York workers.
"Other than the fact that they call it vacation here, it’s a shorter amount of time you get to take away from the office at any one stretch,” says Anderson. "It’s still pretty common to take two or three weeks' break in Australia, put the ‘out of office’ on and really be able to get a chance to unwind. That’s pretty hard to do here.”
But Anderson speaks matter-of-factly about the tighter work culture and glowingly about the opportunity to sit in a financial hub that remains the most powerful, connected and competitive on earth.
The Australian tax desk has become particularly busy since the Australian government created the Investment Manager Regime late last year, an important step towards making it easier for foreign fund managers to set up shop Down Under.
According to Anderson: "There is keen interest here in the US for investing in the Australian financial markets and that initiative by the government is hopefully going to see further interest in the US going forward.”
The Australians on Wall Street speak with even more gratitude of the opportunities they’ve received, because they’re noticeably harder to come by today. It’s still good work, if you can get it. But a shift is underway that should inform future career choices; in fact it’s been underway for some time.
While CAIS gets the majority of its business from the US, some of the best growth prospects that Norton expects to find are in Asia.
His new assignment is to fill a room, with the ingredients of an Asia-Pacific office for CAIS, based in Sydney.
Alexander Liddington-Cox is Business Spectator's North America correspondent.