Investment banks have slashed the number of research analysts by 10 per cent since 2012 due to increased regulation and plummeting profits.
Economists and stock pickers are among those who have been culled with the number of analysts working at the world’s 12 largest investment banks dropping to 5,981 last year, according to figures from data provider Coalition, the Financial Times reports.
Vontobel Asset Management’s CIO Matthew Benkendorf says he expects these figures to rise: “We will have massive cost pressures in an industry that is not ready for it at all. They’ll have to gut things pretty hard.”
The cuts are attributed to the rules surrounding analysts used within investment banks and how profitable they are, as well as incoming EU regulations that stipulate banks must be paid for the use of their research, prompting asset managers to hire their own analysts, which is likely to have a knock-on effect in the US.
The Coalition data analysed the reports of banks such as JPMorgan, Deutsche Bank, Barclays, Goldman Sachs, Morgan Stanley and HSBC.