5 min read

Generation Next: Empowering Tomorrow's Traders, Today

Generation Next: Empowering Tomorrow's Traders, Today

there must be an emphasis on skillset development and personal fulfillment, along with connectivity and engagement.

By Hugh Spencer, Head of Equity Trading, Asia Pacific, Janus Henderson Investors

New entrants ushered into the world of trading are often told that the tangible skills they require cannot be found in a textbook, or by sitting in crowded lecture halls at college. To learn to be an effective trader, one must spend hours toiling in the seat, learning the craft in an extended baptism of fire.

Many seasoned traders are guilty at times of viewing this ‘on the job’ education as a rite of passage that all young traders must embark upon to earn their stripes and along with it the respect of their teammates. Sadly, it’s just this thinking that not only turns many would-be traders away from the industry, but also is responsible for stifling the innovation and essential perspectives of a new generation of talent that sits amongst our numbers, simply waiting to be unlocked yet too often ignored.

In Asia and globally, to ensure that Investments remains attractive to the best and brightest new talent available, efforts must be made to make careers more attractive and rewarding to all. Beyond materialistic measures, insisting that young traders feel valued and confident in their career paths can only galvanize the desire for recent graduates to enter the industry. Recognition must be made that as an industry we cannot rest on the laurels of financial rewards; rather, there must be an emphasis on skillset development and personal fulfillment, along with connectivity and engagement within the network of next-generation traders in Asia.

By creating a more structured pathway for members of our trading community to expand on their skillset, we feel as though we are increasing the probability of retain talent across desks within the region. Buy-side trading desks have historically maintained notably lower staffing turnover relative to other desks and departments within the ecosystem of front office investments. We have now started to see this trend begin to waver in Asia, most notably for traders with three to five years’ experience.

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ATF Takeaways

The recognition of the need to invest and retain recently manifested itself into hugely constructive conversations amongst buy-side desk heads and senior traders across APAC as members of the Asia Trader Forum (ATF). One discussion saw the ever-talented Jane Koh of First Sentier Investors raise her hand to help reestablish and reconfigure a junior trader program in region, with a goal of providing less experienced traders with the tools to navigate modern markets, trading floors and career paths along their journey to success. To effectively assist newer entrants into the finance industry through their personal evolution into thought leaders and drivers of change, it was made clear that we need to look beyond traditional technical skill development.

Specific elements targeting responsible, respectful, and ethical behavior sat at the top of the list when the ATF began constructing the syllabus. As representatives of our firms, clients’ best interests and broader community we as a group are compelled to ensure that at all our members act in a way that is ethical and inclusive. Seeking the outside counsel of Catalyse Singapore – experts in the field of diversity, tolerance, equity and inclusion – we were able to take the junior traders through an eye-opening session on acceptable behavioral practices. The benefits of this type of education are plain to see, by ensuring that our traders continuously shine a positive light on our industry through their behavior, we as a group become standard bearers for other industries within our respective regions of operation.

Through establishing a set of expectations centered around behavior, client centric responsibility, and positive interactions amongst our next wave of traders, we are moving towards creating a code of conduct for our community. Achieving self-regulation as it pertains to these expectations should be an ongoing goal for industry and buy-side market participants globally. Thus, we encourage the notion and imagine that at some point in the near future, there will be a more structured stance on the subject of conduct as part of the acceptance into forums and membership organizations. By engraining early on in peoples careers the importance of positive behavior, and consideration for the impact we all have daily upon those that we work with, as an industry we are paving the way for a more inclusive and diverse environment for individuals to willingly grow and be part of.

Shared Learning

This recognition of not only the need to educate the next generation of traders, but also to ensure their voices and innovative perspectives are heard, has encouragingly grown in the APAC region. We have seen more trading community, and industry collectives, endeavoring to construct committees solely dedicated to highlighting the insights of our junior traders. Supplemental to many existing internally run training courses for less experienced team members, the formation of the ‘group setting’ across multiple firms creates a mind share dynamic that is undeniably beneficial. Traders can compare approaches and bring their own personal and widely varied experiences to the table through a series of interactive sessions conducted in psychologically safe methods. Combined with existing leaders in the space, such as TP ICAP / Liquidnet with their Gateway Training initiative run by the esteemed educator Jeff Schwartzman, it’s natural to be optimistic about the prospects for only seeing only growing focus on development of talented individuals and the expansion of the community resource constructed through each trader’s shared learning experience.

Technology may be responsible for driving a lot of change within our industry, yet we are left with the choice of being either reactive or proactive in our approach to this change. By investing in the rising stars amongst us, we avoid the suboptimal outcome of having change dictated to us. Having team members confident in their ability to add value to ever-important conversations that steer the direction of change on a trading desk is an invaluable asset. Achieving this buy-in and creating a forum of acceptance is only possible by demonstrating to each team member of their worth to the firm and the broader industry. Investment in education and establishing a network of traders on a similar career trajectory is a simple and extremely effect method of achieving this outcome.

Another consideration recognized by the ATF was the mismatch between the next generation of traders with both role models and key industry voices within Asia. Realizing that when traders project forward their career using the benchmarks of more seasoned professionals, it becomes increasingly difficult to do with confidence when you feel asynchronous with these individuals. Disconnection becomes commonplace, potentially pushing traders to seek alternate industries seemingly more aligned with their own characteristics and beliefs. Thus, from an industry perspective, it is imperative to not only continue to create training programs that engage with our next wave of traders, but additionally sculpt a lineup of subjects driven by subject matter experts that represent a broader more diverse range of backgrounds and subsequent experiences. This goes along with making a concerted effort to connect new entrants into the industry with a pool of role models that are truly representative of the widely diverse communities we work amongst.

Following the launch of the program in July of this year, we are greatly encouraged by the early success and positivity the initiatives have created. Jane Koh and I remain focused on the challenge to expand the footprint, frequency and access to these pathways for more traders in Asia. Taking on this challenge has brought the upside of its power to unite both buy- and sell-side trading communities on a path to our common goal of nurturing and retaining talent. Working with recognized industry experts like Maya Frommer (Jefferies), Winnie Khattar (BlackRock) and Stuart Baden Powell (Macquarie Group) in true partnership was imperative to delivering a worthy education platform. Only by leaning on such engaging, dynamic and diverse minds will we be able to deliver the lasting results the industry needs to ensure that the untapped talent of today, become our leaders of tomorrow. 

(Photo credit: Edmund Chew, www.colouredsketch.com)

 

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