Lynn Strongin Dodds of Best execution looks at the skills traders take with them when they change direction.
Trading is often seen as a young person’s game due to the high intensity environment of the dealing room. They are remunerated for the stress but they can burn out by their mid-thirties. While there’s an argument that experience means knowledge of various market cycles, the early years of a traders’ career are often the most formative when they learn skills that can be leveraged for other roles.
Below are the experiences of some of the City’s leading lights and the lessons they carried into diverse roles.
Darren Fancourt, 7iM
Darren Fancourt started his career as a multi asset dealer at Brown Shipley between 2007 and 2010 before moving on to become head of trading at 7iM where he led and developed a large team across multiple functions including multi asset retail & institutional trading, an execution-only front office service offering, and security static data functions. In 2017 he changed gear to become head of trading and operational change which at the fund manager involves responsibility for commercial strategy and change implementation oversight.
“One of the most important skill sets I learned as a trader was how to manage people and to be flexible,” he says. “The ethos on a trading desk is to beat the market by obtaining the best price for our clients and this involves managing egos and making sure the traders understand what they are trying to achieve. This means, for example, understanding the risk tolerances and delivering the best possible results to clients.”
Fancourt also says that being on a trading floor taught him how to deal with pressure. “During periods of volatility, it is very important to have a level head and keep calm.”
The changing regulatory environment was also useful especially with the advent of MiFID I and the requirement of best execution. “There was a great deal of focus on technology and automation of flow to ensure we had the right tools to achieve best execution,” he says.
Fancourt adds, “As head of trading I had exposure to all streams of trading as well as the regulatory and operational headaches of distribution and fund management. We had to embrace technology to help us move the trading desk away from a traditional, custodial-based desk to a full STP (straight through processing) model achieving the highest execution quality at the lowest cost and risk to our end-clients.”
These skills have held Fancourt in good stead as he moved to a more operational role. “I wanted to get more involved in the wider business target operating model and how we could offer tangible benefits to our clients through technology,” he says. “I had to learn the softer skills as one of my jobs was to build a team from different parts of the business and mould them together to achieve the business goals and required culture. In the trading world, it is all about how to survive until the close, but the emphasis now is on delivering the long-term business strategy.”
Mike Garcia, Invesco
Mike Garcia joined Invesco in 2019 as a fund manager within the equities portfolio implementation team. This is a standalone portfolio management team used by active fund managers for single order and flow management activities. Before joining Invesco, Garcia was head of equities dealing operations at M&G and managed the equity trade support function.
“I would say the most valuable thing I learnt was transaction cost analysis (TCA),” he says. “This really formed the bedrock of my market and regulatory knowledge. Given I was not directly executing orders, this was the next best thing in terms of learning how to manage orders. It offered insights into broker performance and PM trading styles as well as market structure,” says Garcia.
He adds, “The lessons I learnt from TCA monitoring have remained with me in my current role. In terms of skills I think the ability to work at speed with a high degree of accuracy is highly valued by my current employer. We manage over 70 accounts, so accuracy and the ability to work under pressure is paramount.
“I had been at the same company (M&G) since I was 23. I would have ideally liked a role as an equities dealer, however, turnover was very low so I eventually decided to look externally for opportunities. I was initially interested in looking for a more senior management role or something transaction cost analysis (TCA) focused. I knew someone who really enjoyed working at Invesco and they advised me to look at their open positions.”
He says, “I applied for the role of Implementation Team Fund Manager but thought I would not get very far in the process, believing it to be beyond me in terms of relevant experience. However, the hiring mangers viewed my background in equities dealing support and operations as transferable and luckily for me gave me an opportunity.
“The change presented a steep learning curve coming from what was essentially an operational background. I was fortunate to start in a small team where my colleagues had many years of experience (my manager ran active mandates for over 20 years and my colleague came from an ETF background.) The main adjustment and skill they taught me was decision making.
“Previously I was always led and bound by a set of procedures or a well-trodden process. Although there are still processes and procedures, there is also the requirement to make decisions on how to react to events.”
Mark Montgomery, big xyt
Mark Montgomery is head of strategy and business development for big xyt, a smart data and analytics solutions provider to the trading and investment community.
Prior to joining the company in 2018, Montgomery was director of electronic trading sales at Barclays Capital following the Lehman acquisition. Other notable positions during his 30 year career include vice president at AllianceBernstein, where he was responsible for establishing a European portfolio and electronic trading dealing desk as well as head of sales and trading at ITG, and head of trading at Hoening. He began his career as a trader at Ackroyd & Smithers before moving onto SBC Warburg.
“I worked at the ever-changing trading coalface which exposed me to the evolution of markets during an extraordinary time,” he adds. “I was very lucky in that I stayed close to technology as I saw the early days of market making and the final days of trading on the London Stock Exchange and the move to upstairs.”
He adds, “In many ways my job at big xyt is not that different from the other roles that I had, in that it is about developing trust and delivering what clients want. This means focusing on minimising risk and enhancing performance. Look at algo trading, there is a fine line between all the players and their performance and it is important to find the differences.”
Montgomery also learned the value of challenging decisions. “If someone wants to buy a name but you think it is about to implode, your job is to make sure they are not exposed to it,” he says. “The best traders are disciplined and can back their judgements and justify their decisions.”
Although moving to big xyt may seem like a change of direction, it is keeping in line with Montgomery’s interest in technology and data analytics. He also cut his teeth while at Barclays working in the fintech team at Rise – the Barclays Global Fintech Accelerator platform. “From a business perspective I was asking questions no one else was asking,” he says. “I then had the opportunity to move to an embryonic company and to leverage my rolodex and my experience. When you trade you give as little away as possible but in this role it is all about transparency and providing a consolidated view of European equities and ETFs (exchange traded funds) so people can see which trends are emerging.”
Paul Humphrey, BMLL Technologies
Paul Humphrey is a 30-year veteran who joined BMLL Technologies as CEO in January 2020. His early years were spent at Garban, trading corporate and government bonds as well as European rates. He has since had several senior positions, including interim CEO of Euronext London, as well as global head of FICC at Euronext NV, and CEO of electronic broking & information at Tullett Prebon. He was also global head of eCommerce with ABN Amro, a business & strategy consultant with Thomson Reuters, head of fixed-income with Van der Moolen, head of fixed-income sales & ecommerce with SLK/Goldman Sachs and managing director of European fixed-income with ICAP.
Given his background, it is not surprising that Humphrey says “I fully embrace change and I have not paused for breath. Nothing stays the same and it’s important to accept that. I always wanted to make sure I rode the wave of change and took the skills learned as things evolved. In my early career I saw change; the launch of SETS (Stock Exchange Electronic Trading) in 1997, which was one of the biggest developments for cash equities at the time, and later on the collapse of LIFFE to Eurex in 1997 which meant the end of traders in ‘ice-cream’ jackets walking around the City of London.”
He adds, “my career as a broker, as well as my other roles, has given me the ability to look at the bigger picture to see what is coming over the horizon. I was once told that I was able to look around corners. But I think it is important to be able to step back and look at the areas where we may need to pivot and which ones to avoid.”
This foresight has been an important competency to have at BMLL which started right before the pandemic hit. “I am able to dig deep and use all my skills here in terms of building and motivating a team as well as developing a strategy during a pandemic,” he says. “However, the most important thing is to be able to make decisions quickly whether you are trading or head of a company. In fact, the worst thing you can do is not make any decisions at all, which is why you need to give your team the confidence to make them.”
Adam Toms, OpenFin
Adam Toms is Global COO and CEO Europe at OpenFin, having joined the then start-up in 2017 after more than 20 years working in the City. His job is to drive industry-wide adoption of OpenFin’s vendor-neutral platform, which enables rapid, secure innovation for all market participants. Prior to OpenFin, Toms served as CEO of Instinet Europe and before that he was co-global head of electronic trading at Nomura. Toms was also a non-executive director on the board of RSRCHXchange.
“People may have different opinions about working in financial institutions but the implicit training, whether it be a trader or managing director in a highly regulated organisation, gives you a phenomenal combination of skills,” says Toms. “I learned the critical aspects of risk and reward while operating within the constraints of the business and its resources which can be applied in almost any business environment or company.”
“There are parts of trading that are relatively stressful,” he adds. “For example, on a large quarterly index rebalance day, you can be exposed to extreme situations such as the algorithm you are using failing or losing connectivity. That would be a very bad day and you need to fully prepare and fortify your systems to make sure that you minimise all potential risks.”
Toms was able to leverage these skills when he moved to OpenFin in 2017. “I felt like I had done everything I could do in equities over the past 20 years and while I could have gone back into banking, I wanted to do something new. OpenFin gave me the opportunity to build a business and change how the financial industry works. There are risks in every business but it is part of my DNA as I already had experience managing the growth and risks of new innovative businesses in the bank.”
“What you also learn along the way, is that some people need and perform well in a stable and steady business while others excel in times of stress and chaos. OpenFin has experienced rapid growth and it is important to ensure that our team scales, evolves and adapts to this success.”
