Repelled by rampant crime, high taxes and exorbitant housing costs, financial firms managing $2 trillion in assets have left New York and California for Texas, Florida and other Sun Belt states where the cost of living is as much as 40% cheaper, Bloomberg reports.

In the three years through March 2023, 370 major investment firms with $2.7 trillion in assets under management—2.5% of the total assets managed by investment firms in the U.S.—moved their headquarters to a new state. Even North Carolina and Tennessee saw more than $600 billion in assets seek refuge, primarily due to AllianceBernstein’s jump from New York to Nashville in 2021 and Allspring Global Investment giving up San Francisco for Charlotte in 2022.

The mass migration is taking a toll on California’s and New York’s tax revenue base, as well as career prospects for financial professionals. In 1990, 33% of all U.S. financial industry jobs were in New York, but by last year, New York’s share of these jobs had shrunk to 17.6%.

Other giants on the move have been Charles Schwab, trading in its San Francisco HQ for Dallas; Icahn Capital Management and Cathie Wood’s ARK Investment pulling up stakes from New York for Florida; DoubleLine moving from Los Angeles to Tampa; and, the splashiest of all, Ken Griffin’s Citadel giving up Chicago for Miami.

The mass flight is also hurting New York, Los Angeles, Boston and Chicago commercial real estate, already struggling due to the realities of hybrid work.

“The Sun Belt is continuing to change—no longer just a place of traditional industries like oil and gas, no longer just focused on tourism, or the retirement community,” says Amy Liu, interim president of the Brookings Institution and an urban policy researcher. “These pandemic moves reinforce that the major metros in these states are certainly becoming a destination for new industries.”

Some financiers also relish living in Republican-leaning states like Texas and Florida, where there is a movement to reinstate legal migration, restrict late-term abortion, and recalibrate diversity and green initiatives.

David Blumberg, a member of Tiger 21, a global network of high-net-worth individuals, moved from California to the Florida barrier island of Golden Beach in 2020. As a conservative, Blumberg feels more comfortable in his new home.

“People don’t drop cocktail glasses at a party just because you said something,” Blumberg says.

The coronavirus pandemic up-ended traditional beliefs about investment management careers, says Nitin Motwani, a former Goldman Sachs trader.

Before COVID, financial giants were remiss to move outside of their San Francisco or Wall Street footholds, for fear of not being seen as major players, says Motwani, now a principal with real estate firm Merrimac Ventures in Fort Lauderdale, Florida.

“They all came for two weeks, and now they’ve stayed for three years—and they’re not going back,” Motwani says. “Everybody loves the story, wants to be part of the story and wants to tell everyone how great it is.”

In terms of the number of jobs New York and California have lost, Florida now has 470 additional high-paying former Wall Streeters, Texas has 1,200 more investment professionals, and Tennesee added 1,000.

These include traders, portfolio managers, financial technology executives and other high-ranking C-suite members—many of whom earn seven or eight figures a year.

New York state, nevertheless, is still the financial capital of the world, managing $25.6 trillion—10 times as much as Florida and far exceeding California’s $15.7 trillion assets under management.

Still, it is worth noting that these mammoth AUM have been helped by market appreciation in the recent years.

In other, regional financial hubs in the U.S., Washington state’s assets were sapped by 19%, largely due to the departure of $211 billion money manager Fisher Investments. Connecticut, a favorite haven for hedge funds that like the proximity to New York, has fallen behind Florida in terms of AUM.

Financial executives also point out that Florida and Texas (along with seven other states including South Dakota and Tennessee) have no state income tax.

One intangible but significant advantage Wall Street bigs like about living in sprawling Texas and oceanfront Florida is the lifestyle that they and their families can enjoy. That includes fishing or horseback riding with their children, or hosting bigger dinner parties, sometimes by the pool.

“In Manhattan, even if someone has a super large apartment, you can’t get like 10 families in very easily,” says Charles Hwang, who oversees $40 million of assets as chief investment officer for Lightning Capital.

“In Florida, you’re able to go to people’s homes,” says Hwang, who now resides in West Palm Beach.

“Several families will show up, and the kids can play in the pool while the parents are able to have conversations.”

Mattie Parker, the Republican mayor of Fort Worth, says having major banks and investment firms like JPMorgan Chase and Fidelity Investments, already in Fort Worth before the COVID-spurred migration, has helped the city attract other investment firms.

“We feel really good about our financial services industry focus,” Parker says.

Banks and financial services firms also like the more diversified customer base they gain by moving offices or headquarters to a nontraditional location, adds John Cummings, chief administrative officer at Texas Capital Bankshares.

“Qualitatively, I think the Texas business environment is very optimistic,” says Cummings, who moved to Dallas in January 2022 after working in finance in Manhattan for 30 years.

“It’s a really diverse economy now,” he continues. “It’s not entirely predicated on oil and gas. There’s obviously a significant amount of inflow of Fortune 500 companies.

“Talent tends to follow opportunity,” Cummings says.