Author: Lynk – lynk.global

While most senior leaders in the investment management industry agree that flexible work arrangement will become the norm for some back office functions, trading from home is proven to be a challenge. But the longstanding issue of the lack of work-life balance among buyside traders is still waiting for a feasible solution.

In 2019, buyside traders called on the London Stock Exchange and other European trading venues to review trading hours across Europe in a joint letter issued by the Association for Financial Markets in Europe (AFME) and the Investment Association (IA).

European trading operates between 8am and 4.30pm, and those in favour of shortening market trading hours by around 90 minutes have highlighted benefits including a boost to diversity and market efficiency. But the Federation of European Securities Exchanges that represents 36 exchanges across Europe warned against shorter trading hours, and said other measures would need to be deployed at an enterprise level to improve the well-being of employees.

To understand how the global pandemic has changed the buyside to its entirety, we spoke to Anita Karppi, co-founder of the UK-based Buyside Trading Community, about the challenges and opportunities faced by buyside traders in Europe, and what could be done to boost the overall well-being of the industry.

L: Lynk | A: Anita Karppi

L: With everything that has happened in 2020, has this year shifted the focus of buyside traders in Europe?

A: It’s definitely a year we will not forget, especially in Europe. I know Asia has gone through the SARS outbreak but for Europe, there was a learning curve for us to overcome in terms of handling a pandemic.

Working from home is one of the enablers for gender diversity. Fathers can, for example, also take their children to and back from nursery so there is no expectation for mothers to always be the ones administrating the family life. Better flexibility for both parties to overcome long working hours in the city is also a great enabler. Additionally, people may save one to four hours in commuting time which hopefully can be reinvested in a better work-life balance.

But working from home has its drawbacks and is not a silver bullet. Some people feed off the energy of people around them, and the lack of informal face-to-face chats make it harder for some to make better decisions. As much as the capabilities of online technology has been highlighted throughout the pandemic, the biggest learning is how we all need face-to-face interaction with other people for our mental well-being and productivity in the long term.

So this year has been a balance between market efficiency, work-life balance, what benefits the industry, and technological advancements. It is also a confusing time for buyside traders to figure out how to make progress in their careers.

L:  While working from home might allow more flexibility for back office functions such as marketing, human resources and finance, many have said it will not work for the trading desk. With the current technologies and facilities that are available, is trading from home not an option at all?

A: Trading from home was not an option before the pandemic. But now, everyone has to trade from home because of the lockdown. Optimal trading from home is very difficult because you need to bounce ideas off each other, sit with your portfolio managers, and you need to be able to have that access to information.

The optimum will be having the option to work from home. Technology does enable teams to continue having meetings virtually, but water cooler conversations are crucial to maintain the well-being of employees and teams.

How will the trading desk look post-2020? No one knows. But I don’t see the trading function being done from home completely going forward. But of course this will spark different conversations around diversity and inclusion because there are working parents and disabled people in the trading community, what can the industry do to make the work environment friendlier for those people?

There will also be more conversations about people who cannot work from a trading desk due to a certain reason. For example, we looked at people with disabilities and are not able to commute into London every day, is there any opportunity for people who haven’t been considered for a role to have some access to the industry in the new normal? There have been more initiatives to make it easier for working parents, but there needs to be discussions and policies in terms of how to make the buyside a friendlier environment for people with different needs.

L: With the world slowly adapting to the new normal, has the buyside trading community in Europe begun coming up with any frameworks or more permanent new work models?

A: Some firms have been doing surveys to ask their employees about what kind of work environment they would like to have going forward, with Schroders having announced it will keep work from home and flexible working conditions in place for its employees on a permanent basis.

So all the discussions about work-life balance, working from home and commuting we had in 2019 have all gone out the window, and now we just have to do it. Increased flexibility is here to stay, and a partial work from home arrangement seems to be an ideal framework as buyside professionals get to have the kind of work-life balance that was never available before, while still being able to build relationships with their managers and team members.

L: What does the new normal look like for buyside traders?

A: An evolving regulatory environment has always been challenging for the buyside traders community. So the pandemic has brought about the uncertainty of whether there will be more regulations in a post-pandemic world, not to mention Brexit being a huge factor in Europe also.

The buyside head traders who have taken the opportunity to demonstrate their value-add throughout the market volatility by interacting and advising the investment teams would hopefully have raised their profile within the firm. Other buyside trading functions may risk coming under scrutiny of dramatic cost cutting exercises with redundancies and the potential threat of outsourcing.

This article was originally published on Lynk Insights.