News Column

Wall Street Workers Tone It Down

June 4, 2013
Wall Street bull

It's the end of another typical workday in May, with the Dow closing up and Wall Street workers heading to happy hours that include mixed drinks, bottled Heinekens, oysters and sliders.

They gather al fresco at downtown joints such as Ulysses on Stone Street, sip $17 martinis at Bobby Van's and line the bar at financial district institution Harry's, a steakhouse known for an extensive wine list that includes Chateau Petrus vintages for $2,700 and $2,225 a bottle.

The mood is jovial at these popular watering holes, which are within walking distance of the storied New York Stock Exchange. But the talk -- and spending -- is rooted in reality, at least by Wall Street standards.

Wall Streeters talk of diminished bonuses, sliced expense accounts and how they wouldn't hand the wine list to the client during a business dinner -- as they once would -- for fear of running up a too-high tab.

Here in an area considered by many to be the financial capital of the world, the once-prevalent culture of spending big, taking risks and living large is evolving, and in some cases, dissolving.

There is a lot less swagger and a lot more caution.

Before the crash, "it was nothing for someone from Wall Street to take eight to 10 people out and spend three grand," says New York State Restaurant Association CEO Rick Sampson.

Restaurateurs now say, "We won't live to see that era again," he says.

In the financial district, after-work crowds have thinned. Many brokers and traders relocated to Midtown Manhattan and New Jersey following the Sept. 11 terrorist attacks, as well as after more recent bank mergers. Layoffs liquidated thousands of security industry jobs from this area, as well as across New York City and the country.

Those remaining inherited increased government regulations and scrutiny by everyone from Occupy Wall Street to President Obama. Fear of unwanted attention keeps patrons at Wall Street bars from talking on the record with a reporter.

The S&P and Dow have hit record highs, but industry observers doubt the glory days of Wall Street will return soon, if at all.

"The culture and the overall business model is forever changed. I would classify it as the new normal," says Katherine LaVelle, an Accenture managing director of talent who works closely with Wall Street firms. "It's not going to go back to the heyday of 2004 to 2008; the regulations alone have guaranteed that."

Back then, many Wall Street professionals assumed their future "was endless," says financial industry compensation consultant Alan Johnson.

People splurged "like billionaires," even though they weren't in that income bracket. "They would spend $1,000 on a bottle of wine or take friends and rent a boat in the Aegean Sea for a week."

Well-paid workers still buy designer handbags and big apartments, he says, but they're not ostentatious. "Now, it's more sober."

Conspicuous consumption is no longer socially acceptable, says Gary Goldstein, founder of Whitney Partners, an executive search firm for the financial services industry.

"It doesn't mean it doesn't exist, it's just not as prevalent as it once was," he says.

Wall Street executives now try to stay under the radar, and expect employees to lay low, too.

"They don't want the young guys being written up in social media as uncorking $1,000 bottles of Champagne or going to strip clubs," Goldstein says.

There are also tighter guest lists at industry parties and a drop in the number of gift baskets going out to clients during holidays. Over-ordering at business dinners is much less prevalent.

"Expenses are more controlled now," says Bobby Van's managing partner Vince Alessi. "Everyone looks at receipts."

Compensation consultant Johnson thinks some of the "fun" will return as the economy continues to improve, but the lessons learned will remain. Those who saw colleagues and friends lose their jobs now spend less and save more, he says.

The challenges "makes us all run a bit harder," he says. "And that's not bad. There's nobody sitting with their feet up."


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Source: Copyright USA TODAY 2013


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