Wanted: the FX sales team of the future

Recruiting foreign exchange salespeople used to be relatively simple – the ideal candidate would promise strong client relationships, and good market and product knowledge. But now it is becoming far more complicated, as sales teams are required to understand and explain effectively to their clients the extra costs arising from the credit valuation adjustment (CVA), clearing and reporting, all of which will ultimately have to be priced into an FX transaction.

“There is no doubt that salespeople need to be much more conversant on the implications of changes in regulation. We don’t necessarily need to be black belts in the entire minutiae, because we have a team of experts upon whom we can rely. That said, we do need to know the kinds of questions to ask, what to listen for in the conversations we are having with our clients, and we must ensure we are introducing the right expertise to the right parts of the organisations we cover,” says Adrian Boehler, global head of institutional forex sales at BNP Paribas in London.

The fundamental role of a salesperson is to deliver the bank’s full value proposition, including risk management and regulatory-compliant processing, rather than focusing purely on the day-to-day moves of currencies, Boehler adds. In the future, a cleared market model might drive clients to reduce the number of counterparties they trade with, he says, and banks need to be ready for that.

“The most valuable salespeople know how to institutionalise a client relationship so they understand the process and value of connecting with all the key touch points at an organisation. The more connections there are with portfolio managers, the execution desk, research analysts or strategists, the quantitative teams et al, the stickier the relationship becomes. When clients say they don’t need as many counterparties any more, then we increase the chances that the client concludes that they need BNP Paribas on their counterparty list,” says Boehler.

Meanwhile, Gerald Dannhaeuser, global head of FX sales at Commerzbank in Frankfurt, says he now expects his salespeople to have a particular speciality, ensuring they retain a valuable set of skills in an environment that is driven increasingly by electronic trading and regulation. At a recent client workshop on regulatory change, the German bank received far more interest and questions from its clients than at a similar event last year, he says.

We don't necessarily need to be black belts in the entire minutiae, but we need to know the kinds of questions to ask

“When hiring, I look at what relationships a salesperson has, how he can execute business, his understanding of the market and what his dedicated or specialised know-how is in regulation, derivatives, accounting and electronic commerce. Ideally a salesperson has strength in all pockets, but experience tells me you will be stronger in one area than in others,” Dannhaeuser says.

While banks consider how their sales teams need to be re-trained or restructured to make them more relevant to their clients, some suggest the regulations are also driving changes on the buy side, to the extent that clients no longer just look for the best price or platform, but are also looking for their counterparties to take more of an advisory role.

“It is now about providing structuring advice and options and, in longer-dated deals, there are capital charges. It means when we are hiring we might start to look for people with a more quantitative background. This could be people who typically might have ended up working for British Aerospace or Nasa for their maths skills,” says the head of FX institutional sales at one bank.