New laws will cost analysts bonuses

ONLY top-rated City analysts will earn bumper bonuses in future as regulation restricts the research they can conduct and their importance in investment banks diminishes, a new report predicts.

New rules preventing analysts from acting as marketing tools for corporate finance departments have significantly reduced the revenues they generate and this will be reflected in their bonus payments, according to City headhunter Alexander Mann.

'There will be fewer rockstar packages on offer for all but the most high-profile as the role continues to decline in importance,' according to the report. 'Numbers will also continue to fall.'

The changing role of analysts means that bosses will find it harder to decide appropriate bonuses. Alexander Mann says many investment banks have set up phantom portfolios to track the success of analysts' recommendations to help gauge their value to the business.