To ask about investment bankers

[draydee]

My DS wants to be an investment banker.

I would like to support him, but is it true there is a lot of nepotism in this industry? Or can an higher level apprenticeship or university suffice if you don't have connections?

Also why do they incite such vitriol?

Is it true they barely sleep and burn out?

I would like to give him the full picture from the experiences of others.

I disagree, and I have decades of personal experience.

IB can offer the most wonderful life style, especially if you can move into hedge funds and smaller funds that offer a much better life/balance. I would say there are plenty of opportunities to have a fantastic life, it is not all working to the bone on coke!! That was the 1980s version.
Outside of Goldmans and Citi etc, there are plenty of sweet spots that sit side by side with a more balanced home life (and still extremely well paid by any standard)

I used to work for one of the big US investment banks (in comms and PR). Most bankers have undergraduate degrees, masters and/or MBAs (sometimes all three!) from the top Unis…often European e.g. the Sorbonne, or places like Harvard and Yale. A female banker I was friendly with had a BSc in Maths from Brown and an MA in advanced maths (with honours) from Cambridge.

I don’t mean to sound negative but if he doesn’t want to do A-levels, it isn’t the place for him. The competition is ferocious and they pick the best of the best.

As someone said though, it is important to differentiate between working in an investment bank and being a banker. There’s a huge difference and other roles can be interesting and much more accessible.

There's no harm in aiming for the top jobs, even if it sounds too competitive. Even if you fall short, you'll still be in a position to out-perform people who didn't even try.

Also why do they incite such vitriol?

You can earn a lifetime's salary in a single year. Put simply.

Ok well don't panic, he's 16, he's got at least 5 years really before needing to make any truly critical decisions. At this age it's all about encouraging ambition and passion for me, plus getting the best GCSE and A level results they can, rather than worrying too much about degree and subsequent career choices. Yes schools careers advice can be mixed but really I think at his age it's more about understanding his strengths and weaknesses, likes and dislikes etc rather than pinning him down to any one specific career. I know they're much dirided but the psychometric tests and things they can usually offer are good for this kind of thing even if you then have to take the 'you are 100% suited to being a tree surgeon' bizarre advice they can spit out with a pinch of salt. If his schools careers don't do this you can do some for free online, myers briggs or the '16 personalities' is a good starter for ideas.

And rather than trying to get him to pick his 'job' now, can you help him work out what is it that appeals about the things he's mentioned, investment banking and accountancy, is it the high salary, the fast paced working, working with numbers and data etc? What other careers would also fulfill these things? What are the requirements for those careers, alongside investment banking and accountancy, what can he pull out as common themes e.g. maths a level, a degree, IT skills etc.

A levels in Maths and Geography are a really good start, can you help him by thinking through what it is that is putting him off the idea of uni, if it's common myths around loans and affordability etc then you can do some research with him on that so he has the facts. If it's more that he doesn't feel academically strong enough, then what are his other strengths and what careers can he look at to maximise those... If it's mainly earning good money he's thinking of then IT roles are probably a really good one to look at, it is possible to do quite well without going to uni if you have the skills and again there are a huge, huge range of different types of role, it's not all coding and software development, there's cyber-security, hardware, networking, operations, user experience, testing, data analysis - lots of apprenticeships too.

It would be almost impossible these days to get into investment banking without a degree.

20 years ago it was possible. Now a university degree is a must.

This ia correct.

IBs recruit only from top tier schools.

They will not even glance at his CV without a top tier degree.

He needs to read up on the type of role he wants. The big money in IB's are as a salesperson (traders to a lesser extent), or megers and acquisitions.
Would definitely require a degree for that economics or maths based are probably best.
However as others have said there are more roles in IB's than that - compliance, credit risk, market risk etc etc.
These roles can be very interesting, and whilst the pay would not be as good as the other jobs mentioned, they can still pay very well.

He won't get in without a university degree. What are his reasons for not wanting a degree? A degree proves you can research, which is what you do when you start in IB. It is a hard life but the rewards are huge. To succeed you have to be ruthless, ambitious and very smart. You also have to be obsessed with it to a certain extent. If it gets in your blood its hard for people to walk away.

It has changed a lot, with a bit of lip service now paid to work life balance and diversity.

There are some accountancy firms who have apprenticeships now. Have a look on the websites. I'm pretty sure Lloyd's do one on the IT side.

I worked as a consultant in the City for many years and the most interesting roles in my opinion are Insurance Broking, especially at Lloyd's, and Futures and Derivatives.

I would like to support him, but is it true there is a lot of nepotism in this industry? Or can an higher level apprenticeship or university suffice if you don't have connections?

I worked in investment banking in corporate finance (M&A, IPOs, disposals etc). 95% of my colleagues were qualified accountants or lawyers so joined with 3-5 years' work experience elsewhere. Most of 5% came in at analyst level straight from uni and worked even harder than the rest of us.

Corporate finance didn't have any nepotism that I noticed. Heavily male (I was one of two female fee earners in a department of 100) and public school dominated but everyone made to feel welcome irrespective of their school backgrounds. Complete range of degrees (geography for me, English for one of my friends) but partly because we had professional qualifications beyond Uni.

The pay was great (7 figure bonuses not uncommon for the more successful directors). The hours were awful at times due to deadlines on transactions. When I was pregnant I left at 6am one day and got back at 7pm on the next, having worked through the night.

I missed out on a lot of nights out with my friends and having holidays curtailed. Work was really interesting and a lot of flying by the seat of your pants as most of your contact is at board level. Very cut throat and hire/fire in tough times. You have to be able to cope with pressurised situations and absorbing a fair amount of shit as everyone is stressed a lot of the time.

I loved it but you have to go into it with your eyes open.

Oh and what degrees should he look at (if he does opt for uni) for something in the financial world, I'd say Maths would be ideal but can be quite challenging to do a pure maths degree, otherwise Economics, Business Studies, one of the sciences, any of the above combined with a MFL. IT/Computer Science good if he's looking into more IT roles within finance. You can do pure Accounting degrees which have pros and cons, usually the really top flight other graduate schemes wouldn't like them as much as pure Maths or a science from Oxbridge or a Russell Group uni, but equally if he goes down the path of becoming a chartered accountant his modules would count towards CIMA making the qualification easier...

Background is irrelevant - you can be from a solidly WC background with no connections whatsoever - as long as you have the necessary degree from a good uni (Oxbridge, RG, Ivy League, etc). Relevant degrees include Finance, Business Finance, Economics, Accountancy, Maths or something else that demonstrates a strong quantitative ability. Yes, the hours are long, the work can be very stressful, colleagues and bosses can be arseholes and it is dog-eat-dog competitive, but the rewards can be huge if you're any good.

So A levels are probably Maths, Further Maths and Economics (but Geography does fit nicely if he like the humand geography side of things).

Degrees - Economics or Maths

Entry is usually via internships for which there are online applications and multilayers of testing to be able to even get through. But all the best to him.

As others have said as they are very competitive roles if he does get into it it is a good springboard into other well paid jobs afterwards.

Complete range of degrees (geography for me, English for one of my friends)

I'm not sure this is still the case (although it definitely was in the 90s). I worked with one guy with History, another Classics, and some people in sales and marketing had different degrees, but now I think the majority have something relevant to banking.

Ok well don't panic, he's 16, he's got at least 5 years really before needing to make any truly critical decisions.

Five years? By 21 he would be completing a first degree? If he needs A's and A*'s in certain A-level subjects, surely he needs to know now what those critical subjects are?

Nepotism has all but stopped in banking a few decades ago, the screening is so rigid and water tight there is no chance of a quiet handshake, as a result everyone there is hugely talented and the diversity is fantastic from all walks of life and it is all the better for it in my view.

I’ve got a friend who is one (and I know several more people who did it for a year or two and quit) She’s late 20s everyone has a degree, mostly RG/oxbridge.
The hours are utterly brutal. She’s been told she HAS to go in at 2am before now. She makes insane money but I couldn’t do 80 hour weeks.

What degrees are good for getting a professional career in finances and analyst type roles, that are well respected?

Believe it or not, History

The vitriol is because unless working specifically in ethical investments an investment banker is playing a key role in causing or facilitating climate change, poverty, pollution, arms deals, and so on and is helping vast suffering for personal gain. In short, it is considered one of the most deeply immoral and antisocial roles society has to offer. I would suggest some deep reflection and perhaps therapy first to explore and understand the motives behind such behaviour. In psychoanalysis these people are known as 'desk killers,' as their aggression and violent impulses are somehow detached and they can appear caring and capable among friends and family while destroying the lives of untold others.

Nepotism isn't just handing jobs out to your mates kids, nepotism is still rife in banking, as in many professional sectors.

It takes the form of unpaid work experience, career guidance, connections, networking, knowing who to speak to, knowing what to ask.

It's silly to think there isn't still an issue in banking

So do premiership footballers...

Mostly agree when it comes to getting a interview.

But it can definitely hurt you in an interview.

Having a commom background with the interview panel usually helps.

I was an i-banker and I still know a lot of them.

First of all, i-banker is a catch all term that actually covers a huge range of vastly different jobs. I would advise your DS to do lots of research on the internet to understand the different roles and which one he might be best suited for. For example the investment bank grad scheme I joined had everyone from currency traders to equity research analysts to corporate financiers to portfolio managers. All those roles have completely different working hours, pay scales, types of work, personalities, career prospects…. He should read Bombardiers by Po Bronson, Liar’s Poker by Michael Lewis; Monkey Business: Swinging Through the Wall Street Jungle by John Rolfe and Peter Troob; and finally City Boy Fear and Loathing in the Square Mile by Geraint Anderson, which are great insights into what different types of i banking are like, pros and cons.

The good news is that most investment banks and big fund managers run open days for would be apprentices and graduate entrants (ie 17-21 year olds) where they explain all this stuff and your DS can ask lots of questions and actually meet people who do these jobs. Diversity and inclusion (D&I) is a huge deal now for financial services so most are making an effort to target these open days to groups that are traditionally underrepresented eg women or people educated in state sector. However it is still absolutely key to do research on the websites/read the Financial Times before you go, attend the open days, look smart, ask sensible questions, make some good contacts and follow up on these.

The next stage is applying for summer internship schemes, and then for either an apprenticeship or graduate entry depending on whether your DS wants to go to university. There are a surprising number of apprenticeships in FS - although most of the more technical roles eg economists or quant analysts are only open to people with degrees or even postgrad degrees. If you want to work in corporate finance (sometimes known as M&A) then you will need a degree too.

The other bit of good news is that nepotism is much less of a thing than it ever was - partly because of D&I and also because most of these schemes are run by HR and have strict processes and scoring in place for evaluating applications. If your DS is bright, hardworking, have plenty of self confidence, and show genuine interest in finance then he stands a good chance.

Having said that, due to sheer numbers of applications, there’s no doubt that it helps if he a) goes to a Russell Group university and is studying a mainstream academic subject (doesn’t have to be business or finance, but definitely not media studies) b) has excellent A level results c) speaks one or more foreign languages.

OK now the bad news.

In some parts of investment banks, some bad stuff happens. Much much less than it used to, because US firms are so worried about lawsuits, but still. Like football players or pop stars, if you give young people a lot of money and put them under a lot of pressure they tend to go a bit mental. (See: the BBC drama series Industry). Traders with plenty of spare time traditionally have done drugs, fast cars and strip clubs. Corporate finance types (which they started off portraying in Industry but then stopped because it is actually too boring for TV) do different kinds of drugs to help them work 24/7 and develop very unpleasant personalities. In the case of older male corporate financiers, that often turned into serial infidelity, preying on junior female staff, Weinstein style, and bullying.

I would not recommend corporate finance to any child of mine as it’s totally incompatible with having a family life. In corporate finance at Goldman Sachs they are expected to work “a minimum of five days in the office” a week - 100 hour weeks are not uncommon. Nor trading, because I think the trading mentality often leads into gambling problems. See this from the FT on.ft.com/3dJrnhL

However there are other front office roles which are better - eg being an equity research analyst if you are a thoughtful type can be not too bad. Being a portfolio manager is GREAT in terms of work/life balance. ESG is a growing area for people who want to use finance to make a difference in society. Or there are opportunities in operations, IT, finance, HR, marketing within investment banks…you will still be paid well and professional expectations will be accordingly high, but the remuneration and lifestyle isn’t so extreme.

I've worked in the city many years ago (not a trader) but worked alongside traders managing a retail banks figures for daily money in/out for money market placement.

There used to be 2 types of traders, posh moneyed ones with connections mixed in with a bit of Del Boy barrow trader types. That has changed. He will need a first class degree or if he's lucky an absolute minimum of 2.1 from a Russell group . A levels best in Maths, economics and IT . There are however some great roles on the peripheries , not as high paid but still well paid and dont demand as much if your life! Also good roles with advanced apprenticeships and not necessarily degrees but great A levels at the big management consultancies, check out PWC or KPMG, Deloitte etc

Not IB but in the commercial banking world I know of a couple of CEOs who started on the shop floor as cashiers/tellers. Enthusiasm, hard work and brilliance helped them move up quickly. The opportunities are there for hard workers, not the millions that IB offers but definitely enough to live on.

Risk and financial crime are two big and fascinating areas if he wanted something less stressful than IB.