There are good jobs on Wall Street — and there will be many more in the future. But the majority of them will be for technologists, not for traditional traders.
That’s according to Jim Swartwout, President of tradeMONSTER.
“I told my son not to get into this industry unless he’s going to become a technologist,” Swartwout told StreetID. “When I started in the industry, the New York Stock Exchange probably had 500 to 600 people working on the floor. What are they down to now, 100, maybe? It’s all automated.”
Before joining tradeMONSTER, Swartwout served as the Chief Operations Officer / VP Order Management at E*TRADE. He was also a Trading Risk Manager at Fidelity, the VP of Brokerage Services at AmSouth Investment Services and a Trading Supervisor at Charles Schwab & Co.
“Part of the reason you had a huge boom in the early 2000s was because everyone went to the Web, which gave customers the ability to give ‘em orders a lot faster, and they got more customers so we had to hire up,” Swartwout added.
Swartwout was originally hired at E*TRADE because the company had trouble processing all of its morning orders before the market opened.
“At the time, [users] entered it on the Web, which looked like you were doing it electronically,” Swartwout explained. “But it spit out on a ticket at the backend because that’s how they had always operated. There was an order room somewhere that got a ticket — a paper ticket. So they literally had guys who got the paper ticket and would re-type them back into the backend system to get ‘em out to the Street.”
This led to a massive increase in hiring.
“I came to E*TRADE, opened the Atlanta office, [and] within three months I had 100 brokers working for me just doing that,” said Swartwout. “But over the next year and a half we automated it all. It was like there was a lack in the firm’s view of automation and the way things had always been done. You just hired more staff.”
Over time, the company began to realize that it had no reason to hire employees to perform this task manually. E*TRADE (and others within the industry) could hire technologists to build a system that would handle this job automatically.
“When I started at E*TRADE, we had 200 people doing just that function, both in Atlanta and in California,” said Swartwout. “Today there are 15 people in Chicago doing that job. They’ve way more than quadrupled their account base at that time. We did 13 acquisitions while I was there. I think they went from having 400,000 or 500,000 accounts to having 4.5 million or whatever their current number is.”
But the staff was still reduced — thanks to automation.
Swartwout has seen similar results in the back office.
“The back office used to be like a bank’s back office — you got more business, you hired more people,” said Swartwout. “Now, if you get it automated correctly, it’s all straight through processing. In the full service side of the business it’s gotten harder and harder because there’s more discount guys like us [tradeMONSTER] that’ll give you all the tools you need to do it yourself.
“So to be a broker like when I first started, making phone calls — cold-calling people — nobody does that anymore. I don’t see (on the pure brokerage side) a lot of upside. But I do see a huge upside for quant-type guys, algorithm guys, tech guys — because the infrastructures are getting bigger and bigger as we add more and more complexity to the systems.”
In time, Swartwout thinks that the new tech jobs on Wall Street will eventually replace those that were lost during the industry’s evolution.
“You will eventually end up with firms like ours — I have (rough numbers) 25 people on the brokerage side, 60 technology guys,” said Swartwout. “Technology is always hiring because we’re always wanting to do more and roll out more products and roll out more services. I think in the long run it will [make up for the lost jobs]. I just think what people think of as a Wall Street job won’t look at all like it did when I joined the industry in 1987.”
That said, there may still be some opportunities for brokers.
“As more and more baby boomers retire, there will be an opportunity for brokers,” said Swartwout. “[Baby boomers] are not as comfortable with technology as my son is gonna be. They’re not gonna wanna sit down with my platform with no one talking to them and start trading — you know what I mean?”
Swartwout suspects that there will be more and more people who are just looking for assistance. They won’t necessarily want (or need) recommendations. Instead, they’ll want help with their portfolio and how to execute whatever it may be that they want to execute.
“There’s some room for growth there, probably five or 10 years out,” said Swartwout.
Swartwout also expects job seekers to benefit as the industry becomes more global.
“There’s been talk forever of the exchange going to a longer session or even a 24-hour session,” said Swartwout. “I think that will happen because eventually people are going to demand it. Which, obviously, gives you some potential for job growth, too — you gotta cover another 12 hours every day.”
Get Hired Now
These days, job seekers have a million options, but we know where they should turn: StreetID. We built StreetID (a financial career matchmaking website) from the ground up to accommodate Wall Street’s growing community of financial professionals. In good times and in bad, current job seekers and those looking to move on in the future can turn to StreetID and sign up for a free account and make a direct connection with relevant candidates and employers.