Sales of fancy houses, fast cars and other symbols of success are booming among Wall Street employees as banks and brokerage firms head toward another record year for profits and pay.
“We’ve been seeing a lot of Wall Street people, and I’m not expecting it to slack off,” said Jack Spiegelman, a salesman at Silver Star Motor Sports in Roslyn Heights, New York, one of the metropolitan area’s biggest Porsche dealers.
His clients include executives from the largest firms and brokers in their 20s who, he said, are doing well enough to pay more than $100,000 for turbo-charged Carreras that cruise at 170 m.p.h.
That’s a big outlay, considering the bulk of Wall Street compensation comes in the form of year-end bonuses that vary widely with changes in stock and bond markets.
What’s more, there’s little job security in the industry, which is why financial planners say younger bankers and traders, who haven’t had time to accumulate as much wealth as older Wall Street executives, should consume less and save more.
“Defer your gratification and build some assets,” said Carl Klapper, chairman of KLS Professional Advisers in New York, financial planners who count many securities industry executives among their clients.
Traders tell the story, perhaps apocryphal, of a banker at a securities firm who took out a mortgage some years back on a $3 million Long Island estate with a pool, tennis court and bowling alley. A month later he was fired.
One way for employees to build wealth is to set savings targets each year and then establish accounts at banks or investment firms with a mechanism for receiving the money on a regular basis. Those who burn the midnight oil making money might consider delegating investment decisions to a financial planner.
Wall Street employees in the market for such a professional need look no further than brokers at their own companies.
Lehman Brothers Holdings Inc. encourages its bankers and traders to use the firm’s brokers and offers employees reduced brokerage commissions and fees for financial advice. Morgan Stanley, Dean Witter, Discover & Co. employees also can get brokerage services and advice for reduced rates.
There’s no question real estate agents who deal in upscale homes outside New York City are doing brisk business with Wall Street clients these days.
“The market is strong, bordering on wonderful,” said John Cook, a real estate broker at Merritt Associates Inc. in Greenwich, Conn., 45 minutes by train from New York and where the average sale price of a home this year is more than $1 million. “The financial community is driving it.”
William Harrison, a Chase Manhattan Corp. vice chairman, paid $6 million earlier this year for a home in Connecticut, with 15 rooms, six fireplaces and a terrace overlooking a pond, according to town records and Realtors.
