Client Dismissals at Investment Banks
There are plenty of ways to get fired as a client from a large investment bank. For instance, issues related to compliance or political risks can be red flags. If a client has paid significant fees in the past or creates conflicts with more lucrative clients, they might be shown the door. Sometimes, simply being difficult can lead to a client being blackballed.
In one notable case, it seems some bankers had been itching to cut ties for years, yet felt unable to do so with a high-profile client. According to Donald Trump, shortly after he left the White House in 2021, JPMorgan informed him they were closing his account. He later approached Bank of America, describing how their CEO, Brian Moynihan, had been quite accommodating during his presidency, but they also didn’t want his business.
Trump mentioned his struggle to find a new bank, stating, “I went to another person, another, another person.” This might have included interactions with a German bank that also severed ties around the same period.
The challenge with removing clients who pose more problems than they’re worth is that dynamics can shift. After the January 6th attack on the Capitol, the calculations regarding risk versus reward must have seemed fairly evident. Yet, remarkably, a significant political comeback has unfolded since then, leading to a scenario where the once sidelined politician now has a hand in shaping banking laws. Consequently, many of the banks he mentioned appear to be in direct conflict with him—despite claims that they don’t close accounts for political reasons. This situation serves as a lesson for bankers to carefully consider their client choices from the outset, as outcomes can differ significantly across industries.
In another interesting turn, despite some clear market indicators earlier this year, 2025 is shaping up to be a surprisingly rewarding year for bonuses in the banking sector. Recent data from Johnson Associates shows that bonus pools might mirror those of 2021, with an expected increase of around 5% from last year.
However, these rewards aren’t evenly dispersed. Certain sectors, particularly financial sponsors, are still in a slump and can’t afford to compensate like it’s a booming market. Johnson Associates forecasts fluctuations in compensation across various areas: a 5% rise in total payouts for advisors, while stock capital markets anticipate a decrease. In contrast, bond and stock trading could see increases of 20% to 30%.
Some industry veterans might find it odd that specific sectors are reporting success. Historically, it’s relatively rare for sales and transactions groups to come out ahead in these situations. Even though the revenue environment is tough, the job market for consulting bankers—especially at top levels—remains surprisingly vibrant. Financial sponsors might downplay poor years by focusing on solid pipelines or revenue results.
Yet, the lack of activity in these pipelines is undeniable. Private equity bonuses have stagnated, according to Johnson Associates, with “compensation expectations somewhat misaligned with the realities of the market.” Even private credit managers, who have experienced a substantial influx of assets in recent years, have only noted growth in the 5% range. The few who stand out in terms of bonuses are perhaps those working in the “secondary” market, which mimics elements of sales and trading.
Meanwhile, the secondary market illustrates just how active things can be; for instance, a team of four bankers from Morgan Stanley’s Private Equity Secondaries unit recently transitioned to HIG Capital for a new fund launch.
In a different area, Intesa Sanpaolo, another major Italian bank, has made its mark by engaging in 15% of infrastructure deals last year. Its head, Mauro Mishiro, is known for his connection to English-speaking circles and a fondness for Wimbledon and Oxford University.
They have demonstrated significant research capabilities, which is essential for roles often requiring a PhD in economics. While the annual salary of $195,000 is quite competitive, it also brings along specific political complications, particularly in light of a sudden vacancy for a key position at the Labor Statistics Bureau.
In unrelated news, Neil Woodford, once a prominent financial advisor, is now facing consequences after being fined £6 million and barred from senior roles following an investigation concerning a failed equity income fund.
Phil Falcone, a name some may recall from past financial crises, has gained attention again, not for another big win but for ongoing legal issues related to loans against his art collection. It’s possible he won’t own that Picasso after all.
KPMG has introduced a training facility known as “Lakehouse” in Orlando, Florida, designed to offer employees a cost-effective and appealing space for client engagement, surpassing typical hotel or restaurant options.
Lastly, in a troubling incident, the former CEO of US Bank Flagster is facing legal issues tied to a video call where sensitive information was discussed while a junior employee sat on his lap.
