Will NYC still be the financial capital of the country?

[Anonymous]

It feels like every week there’s an article in the NYT about how people are in their second homes or in their hometowns with their parents. With covid, remote working trends, and a progressive state legislature, do you think that the financial industry will stay concentrated in NYC? Or other niche industries common among the affluent like fashion.

[Anonymous]

It’s too entrenched to change. New York will always be the US financial capital, even if things diffuse a tiny bit.

[Anonymous]

They call CT the capital of the hedge fund world, but Wall St will be number 1 for a very long time.

[Anonymous]

Not if they pass the tax proposals they are considering.

All the people I know making $500+ that worked in NYC have moved to Florida in the last 12 months. The loss of the state tax deduction killed them.

[Anonymous]

Charlotte, NC

[Anonymous]

Work at home will not last forever for everyone.

[Anonymous]

Anonymous wrote:Charlotte, NC

Nope. Taxes are too high. Companies (or the super rich people who own/run them) aren’t moving from one high tax place to another.

[Anonymous]

Anonymous wrote:Work at home will not last forever for everyone.

It will for many in financial services industry (and other service based office industries like accounting and legal). There’s zero need for a fund manager to be physically located in a specific location. They only need reliable, high speed internet. And the real estate these companies select is the highest premium locations. Why pay that rent if you don’t have to and the benefit is an immediate uptick to the bottom line? They won’t go 100% virtual, but at least 1/2.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Work at home will not last forever for everyone.

It will for many in financial services industry (and other service based office industries like accounting and legal). There’s zero need for a fund manager to be physically located in a specific location. They only need reliable, high speed internet. And the real estate these companies select is the highest premium locations. Why pay that rent if you don’t have to and the benefit is an immediate uptick to the bottom line? They won’t go 100% virtual, but at least 1/2.

There is something to be said about in-person collaboration and debate. For example, portfolio management. Most investment strategies don’t happen with one guy sitting in a room all by himself. A person pitches the idea to other colleagues, gets challenged, refines their strategy, models the strategy, pitches to the Investment Committee, etc.

Can you do all of this over Zoom? I guess. But it’s not organic and spontaneous. Zoom isn’t great for collaborative banter.

Finance is still relationship driven. It’s hard to start new relationships over Zoom.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Work at home will not last forever for everyone.

It will for many in financial services industry (and other service based office industries like accounting and legal). There’s zero need for a fund manager to be physically located in a specific location. They only need reliable, high speed internet. And the real estate these companies select is the highest premium locations. Why pay that rent if you don’t have to and the benefit is an immediate uptick to the bottom line? They won’t go 100% virtual, but at least 1/2.

There is something to be said about in-person collaboration and debate. For example, portfolio management. Most investment strategies don’t happen with one guy sitting in a room all by himself. A person pitches the idea to other colleagues, gets challenged, refines their strategy, models the strategy, pitches to the Investment Committee, etc.

Can you do all of this over Zoom? I guess. But it’s not organic and spontaneous. Zoom isn’t great for collaborative banter.

Finance is still relationship driven. It’s hard to start new relationships over Zoom.

182 days provides sufficient time to bounce in and out of New York for meetings to build and maintain relationships. I guess that means it will stay the capital, but many won’t call it home.

[Anonymous]

Well, completely anecdotal, but I am in finance and have been interviewing since January hoping to get a job that I could work not even remotely, but from DC satellite offices, and have had multiple offers with the caveat that I 100% have to be in NYC. Covid hasn't changed anyone's minds and they all want to relocate me. So I would say this idea that we are all going to be remote forever is not bearing out as true in my experience.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Work at home will not last forever for everyone.

It will for many in financial services industry (and other service based office industries like accounting and legal). There’s zero need for a fund manager to be physically located in a specific location. They only need reliable, high speed internet. And the real estate these companies select is the highest premium locations. Why pay that rent if you don’t have to and the benefit is an immediate uptick to the bottom line? They won’t go 100% virtual, but at least 1/2.

Some, but not all.

Investment management and hedge fund types are not all willing to let their employees work remotely from wherever they like. A lot of those businesses do not want access to their proprietary strategies, investor information, etc. to be scattered and outside of their control.

Last year, I moved to DC for DH’s promotion. I worked in Finance in our previous location. When moving, I was hoping to keep my job, and work remotely. Everything I did could be done from home. When I proposed this to my then-boss, there was no hesitation before I was told No. Why? They were concerned about their trading strategies and confidential client information being compromised. I was told “what’s to stop one of our competitors from paying you to come into your house and look at your computer?”

In fairness, nobody from that firm ever worked from home (or “teleworked” as people in DC like to say) unless there was some major storm or disruption that temporarily closed our office.

[Anonymous]

NY will always remain the center...already there are nodes of finance all over the country (Charlotte, SLC for example.) But the intelluctual capital of banking and trading is NYC. The bankers themselves will always continue to live in tthe NYC Metro area, and will spend the time they already spend in their second and thierd homes (FL, Maine, Wyoming, LA) but the offices and desks will remain in Manhattan.