geTTIng In
InvesTmenT bAnKIng
FInAnCIAl servICes
EMPLOYERS
the overview
www.efinancialcareers.com/students | Careers in Financial Markets 2014
43 Financial Services
Global Custody safe-keeping experts handling ever-more complex tasks
Global custody used to be simply about the safe-keeping and administration of securities for pension funds and fund managers. But, as markets have become more electronic and investors more sophisticated, the role has evolved significantly. The range of products and services they offer clients has snowballed in recent years.
Fund managers now invest in equities, bonds, cash, derivatives, hedge funds, real estate and private equity. Global custodians have to support these different asset allocation strategies, as well as develop cutting-edge technology to stay ahead of their competitors.
Core functions in global custody include fund administration and fund accounting (calculating how much income funds are making and spending), settlements (delivering securities to the buyer and the money to the seller), and corporate actions (keeping track of dividend payments for equities and coupon payments for bonds).
Roles and career paths
Client-facing – you will schmooze with clients, ensure they’re happy with existing services and, hopefully, sell them others. Firms rarely offer client-facing roles at graduate level.
Delivery – includes ‘core functions’ like fund accounting, settlements and corporate actions. Graduates usually get a grounding in all these areas before specialising.
Technology – custodians spend hundreds of millions of dollars on technology, which is central to profitability, so they look for the right IT staff from a graduate level. Firms hire programmers, data architects, business analysts and systems integrators.
Pay and bonuses
Client-facing roles in global custody are the most lucrative, with base salaries for relationship managers in the UK coming in at £50-70k ($80- 113k) after three years’ experience and £80-90k ($130-145k) at the senior end, according to figures from Robert Walters.
Fund administration starting salaries for roles in settlements are £25-35k ($40-56k) in the UK, €27-35k ($35-45k) in Dublin, a key centre for global custody, and S$40-60k ($50-77k) in Singapore.
key players
Top five global custodians by assets under custody ($bn) Company
1. BNY Mellon 2.
J.P.Morgan 3. State Street 4. Citi
5. BNP Paribas Securities Services Source: Institutional Investor
Skills sought
Most roles in global custody, away from the client- facing positions, tend to be fairly quantitative and therefore graduates with mathematical degrees gravitate towards them. Nonetheless, graduates will also need to demonstrate softer attributes. “Asset servicing professionals also need organisational management and communication skills to effectively articulate complex needs into strategies that people can relate to and understand quickly,” says Paul d’Ouville, global head of product management for corporate & institutional services at Northern Trust.
Although only some roles in global custody are directly ‘client-facing’, all roles require some degree of customer service, and graduates need to demonstrate that they have these skills.
“Increasingly, our institutional clients also rely on us to provide data and reporting solutions to help them make informed decisions; analytical support to monitor investment performance and understand portfolio risks; and technology solutions that automate complex, manual processes and pull together different streams of information in accessible formats,” adds d’Ouville.
Assets 26,300 17,868 16,387 12,470 6,366
You need organisational management and communication skills to effectively articulate complex needs into strategies that people can relate to and understand quickly.
Paul d’Ouville Global head of product management for corporate & institutional services, Northern Trust
Client-facing roles pay more than core custody functions
Custodians are big spenders on technology
Customers are demanding more complex data, and sophisticated technology
Opportunities Kudos Money How hot?
6/10 5/10 6/10 6/10
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