Newsletter, November 2018

by Nathan Fuller

November 2018 Newsletter

In The City This Month
Movers & Shakers

Tom Carey proves loyalty pays off at Broadridge, while LSEG continue their growth trends with a new appointment in Bucharest.
In Focus

How worried should contractors be about the impending changes to IR35?
Fun Facts

There's only one road in the City, and more...

Tom Carey, promoted to President of GTO at Broadridge 
Tom Carey, recently announced as President of Global Technology & Operations at Broadridge, has an interesting career profile that bucks the trends of the vast majority of executives at his level. On the face of things, Tom has had 3 employers in his c25 year career to date. This is more stable than most but dig a little further and we find something seldom seen in today’s market.

Tom graduated in Artificial Intelligence and Machine Learning before most of us realised either of them existed. In 1992 he joined Wilco International as one of the earliest hires in their new Post Trade Technology division. In 1995, ADP, the global business solutions LLC, acquired Wilco as part of a move towards capital markets technology solutions. Tom survived the acquisition, being promoted to Head of Technology in 1996 and COO of the international business in 2004.

2008 saw the division, by that time named Brokerage International, spun off as the independent trading company Broadridge Financial Solutions. Again, Tom profits from the change and by 2009 he is President for International Technology & Operations, a post he held until his recent promotion.

Tom’s career is old fashioned, in the best way possible. He has demonstrated a quarter of a century of loyalty to his first employer, and in return has been rewarded with career development and promotion to an enviable level. This is unusual in today’s gun-for-hire career mentality, where so many achieve their next step through seeking glory in other, often competing companies. I’m not complaining, if it wasn’t for the uncompromising ambition of City professionals, and the desire of businesses to seek out the best people from anywhere they can, Kite would be stranded in a certain well-known creek with very limited rowing equipment.

Regardless, it’s great to see an executive who holds the rare crown of achieving career growth and company loyalty all at the same time.

Cake had and eaten.

Andreea Stanescu announced as General Manager for LSEG BSL, Bucharest

Andreea Stanescu has been announced as the General Manager for LSEG’s new Business Services Centre in Bucharest, Romania.

LSEG has been growing aggressively since March 2009 when previous CEO Xavier joined the business. They’d already made some headway with the Borsa Italiana merger, but the strategy to increase share value and fend off potential buyers through acquisition was clear.

Since then, LSEG has grown from a well-known but small business, to a global capital markets player. Major M&A activity includes FTSE, Russell, LCH (and of course SwapClear, the jewel in the crown), with recent moves including a stake in Arcadiasoft and the acquisition of Yield Book from Citi. With such significant and successful growth, it is natural that the Group begins to look at shared services and company wide efficiencies.  Led by LCH veteran Dee Liyanwela, LSEG’s BSL has been achieving exactly that for several years.

London is spoilt for choice for talent and is a melting pot for awesome people in general. Any business facing expansion outside of the major global finance hubs faces the question of how they will source and attract the right people. No surprise then that the new office, set to employ over 200 staff, is based close to the local Polytechnic University.

It isn’t difficult to see why LSEG have chosen Andreea, who holds a Master’s in Economics from the Bucharest University of Academic Studies. Her profile includes an impressive and long-term executive career at Vodafone for nearly 14 years, and a proven track record in BPO and technology change management, including 7 years in the global outsourcing heavy weight Stefanini.
Are contractors an endangered species?

The anticipated next wave of attacks on the contractor market has begun, with the Red Book placing the target firmly on the chest of nigh on every contractor in the City as of April 2020.

This is the latest blow in an 18-year onslaught of tax amendments designed to scupper flexible working in the City. IR35 originally graced our shores in April 2000, armed and hungry it sought out disguised employment across the country on behalf of the government.  But IR35 didn’t come alone, over the years it has brought several friends to the party including the Settlements Legislation, expense audits and MSC rules.

IR35 is a tricky one. On the one hand, why should someone doing effectively the same role as a permanent colleague earn more pound-to-pound and pay considerably less tax? On the other hand, the financial markets is the most competitive industry in the world and it needs reliable access to short-term flexible experts.

As you’re no doubt aware, the same (expected) measures were launched in the public sector in April 2017. The move was hit with buckets of criticism amid reports of up to 40% of IT departments walking out, additionally nearly a third of public sector companies admit to having to pay higher rates to the remaining workforce to retain them. The result? The end client paid more, and the contractor got less, nobody won. Nobody of course except the government who banked more tax. In the case of the public sector it’s an interesting game, since it’s all public funds any way HMRC is simply increasing cost in one area to benefit another. 

So, we have until April 2020 but what’s the plan?

There is still a consultation due to start imminently, so at this point we can’t go setting anything in stone. That said, we can learn a few things from the public sector and a few things from some people in the know in recent weeks.

The public sector teaches us that it’s a badly managed process (the CEST online assessment tool is about as reliable as a chocolate teapot), but that the government thinks it works. This is bad news for contractors because it suggests this could be the final blow.

People in the know seem slightly more optimistic. Seb Maley, CEO of Qdos, who are increasingly the people our contractors turn to for advice, encourages us to start planning now because “contrary to speculation – these changes are manageable”; and APSCo has publicly announced it’s concerns over the model working in the private sector at all.

So, in a sea of uncertainty, here’s something we know for sure. We have Brexit looming, and whatever result May’s government and/or its opponents delivers us, London is going to need to come out fighting to hold its spot as #1 in the financial markets. The market is heavily regulated and arguably the most competitive sector on the planet. In order to succeed, London needs access to short-term and flexible specialist professionals. Consulting firms have never truly provided a solution to this need (and frankly a significant portion of their people are Ltd company contractors anyway), so in order to stay nimble we need to find a way through this jungle and out the other side.

Also, I can’t help thinking that the group of people who accept the risk of a short-term and fickle career structure, deserve at least some benefit for taking that plunge.

Enough IR35 doom and gloom. Let's get back to loving London. Here are some pub facts to make you look clever next time you lift a glass...
  • The City is exactly 1.12 square miles, making it the smallest city in England.
  • There is only 1x road in the City, everything else is a street, lane, way, square et al
  • The population of the City is 7,375 and hosts the oldest government in the UK.
  • Dragons guard every entrance to the City (but they haven't kept the tax man out)

And finally...

More next month. For both of you who got this far - thank you and see you again soon.


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