Thank goodness for MiFID II. The new regulations may be causing problems for some salespeople who can no longer persuade potential clients to even pick up the phone for fear of being charged, but they’ve also delivered a big advantage: the relentless cycle of client entertainment is fizzling out.
MiFID II comes with some strict rules on inducements. These followed the UK Financial Conduct Authority’s own restrictions on entertainment that doesn’t directly enhance the quality of service provided to clients. In combination, these two developments would always have made client entertainment less important than it in the past. However, the real blow has been MiFID II’s stipulation that trades must be executed in the most efficient way possible. It’s no longer possible to give business to a broker just because he or she entertained you the night before. And it’s therefore no longer worthwhile for brokers like me to bust their livers drinking with clients until 3am.
This is a good thing. Client entertainment can be both messy and exhausting. Restraint is often not an option: I have known head traders give business to brokers who injured themselves and ended up in an ambulance. This is bonding, at an intense level.
It’s bad for your health. In my career, the typical evening with clients began in a steakhouse, sushi or fusion-food restaurant and progressed to a bar or club in the City or Mayfair. Nights were long and the calorific intake was huge. Try staying healthy when you’re up until the early morning eating and drinking, and then sitting at your desk again for 10 hours from 6.30am.
There were times I didn’t go home. When you’re out late and you need to be in early, it can make no sense to commute back to London’s zone three. I have slept at work rather than waste valuable hours in a taxi: if you wake up at 5.30am you can go to the gym and shower before everyone else arrives. It’s not ideal, but it can be preferable to getting no sleep and no exercise.
Thanks to MiFID II, this is all in the past. I would like to compliment the regulators on rescuing my health and giving me my evenings back – and so would my family.
Bruno Beauvais is a pseudonym
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