New York City weather is currently hot and muggy. Financial services professionals are dealing with a “summer of hell” commuting into Manhattan, with the MTA scrambling to repair Penn Station after a series of train derailments, leading to ripple effects slowing down the entire transportation system. Many believe that it’s the best city in the world, but it’s also one of the more expensive places to live.
You may have considered moving to a more affordable, less intense city elsewhere in the U.S. – or your employer may have informed you that your job is moving to a lower-cost city whether you decide to move or not. That is a growing trend as more banks move back-office and middle-office roles away from Wall Street and grow satellite offices in other parts of the U.S., including some with front-office roles.
The fact is that financial services organisations are moving jobs to lower-cost destinations regardless of whether their personnel want to move – largely because they want to cut costs. For employees, this means taking a lower salary in a cheaper location. Alan Johnson, the founder of compensation consulting firm Johnson Associates, says that pay is typically 15-20% down in locations where banks are moving jobs. But this isn’t necessarily all bad.
“Companies used to apologize to employees but they don’t do that anymore – they say, ‘The sticker number of your comp will be less, but factoring in the cost of living, you actually may come out ahead,” he says.
Right now, employees leaving NYC are looking for a slower pace of life, plus the opportunity to stay in banking without the frantic Big Apple lifestyle, says Jeanne Branthover, a managing partner at recruitment firm DHR International.
“I am finding that quality of life has become a major factor for candidates at all levels – those that are going to have children, those that have children and those that are looking for their last job with an eye towards finding a place to retire,” she says.
So, what are your options?
1. Dallas/Irving, Texas
Banks with a presence in the Dallas/Fort Worth/Arlington metro area, of which Irving is a part, include Goldman Sachs, J.P. Morgan, Bank of America Merrill Lynch, Citi, Wells Fargo, UBS, Deutsche Bank, BNP Paribas and Jefferies. Morgan Stanley is there too, although it has bigger corporate offices in Houston and Austin.
Goldman Sachs’s Dallas and Irving offices have a combined headcount of more than 1,000 employees, making it the firm’s seventh-largest location globally and third-largest office located in the U.S., behind New York/New Jersey and Salt Lake City.
But while Salt Lake City primarily houses support functions, 13 of Goldman’s 16 divisions – including investment banking and securities – are represented in Dallas/Irving. Other divisions housed there include real estate/realty management, lending, wealth management, equity sales and risk management.
There is also a host of local and regional investment banks based there, including boutiques specializing in the energy/power sector.
2. Salt Lake City, Utah
The second-largest Goldman office in the U.S. is in Salt Lake City, with over 2,000 employees, although it mainly houses back-office and middle-office roles.
Other banks with a presence there include Morgan Stanley, Bank of America Merrill Lynch, UBS, Wells Fargo, KeyBank, Silicon Valley Bank and local firm Zions Bank.
By some accounts, it is a great place to start your career, especially if you enjoy skiing, snowboarding or mountain biking.
3. Jacksonville, Florida
Deutsche Bank, Bank of America Merrill Lynch, Citi, J.P. Morgan, Wells Fargo and Macquarie have all moved operations to Jacksonville. It makes sense: Corporate office space is much cheaper there.
Deutsche Bank’s office in Jacksonville has been expanding rapidly since it launched in 2008, housing most of its major divisions and approaching 2,000 employees.
“Jacksonville has a much lower cost of living and the climate is good, plus there are lower costs for the companies and a high quality of life for families,” Branthover says. “Florida has no state income tax, which has become a serious positive with candidates having so many more choices of being successful in their career outside of NYC.
“In the lower-cost-of-living cities, companies can pay employees less, which saves them their largest cost…people,” she says. “A positive for companies is the tax incentives to lure talent out of New York and into these other cities as well.
“For companies, it improves their profitability with lower costs for personnel, as well as real estate.”
4, Other high-cost cities like San Francisco, Boston or Chicago
Maybe you’re being transferred to another city against your will, or you don’t really care about a high cost of living and want to leave New York for other reasons. There are plenty of financial services job opportunities in other high-cost cities such as San Francisco, Boston and Chicago.
“Chicago has fintech companies, divisions of most large banks and the Chicago Mercantile Exchange,” Branthover says. “Boston is an asset management center, with money managers like Fidelity Investments and Putnam Investments.
“San Francisco is as high cost as New York, but it is the finance capital of the western U.S. – most financial services firms have either major divisions or headquarters there,” she says. “Venture capital, privite equity, technology investment banking and fintech have a large presence there, and the climate is also a draw.
“Many financial services firms are now [in one or all of those three cities] so you can move and stay there to move up the ladder within the industry.”