Note: Names were altered, and I’m using the name “Bank of Springfield” (Simpsons reference, if a Bank of Springfield really exists and recruits at elite universities).
My friend Jimmy noted this about the Bank of Springfield (BofS for simplicity) recruiting event 30 minutes before its projected start time: “man, we are in a room full of desperate kids.” Jimmy decided the gourmet food served at these events made them worth checking out, while I just loved learning about incentives for choosing careers in finance. We ended up being both satisfied at the campus recruiting event. Jimmy got his gourmet sandwiches and fruit dipped in chocolate from a chocolate fountain, and I found a big reason why I thought so many students came to this BofS event: to find some sense of certainty in life.
“Why investment banking (ibanking)?” All investment banking recruiters ask this question. But when recruiters ask, they usually hear their elevator pitch. Here are a few I heard:
“My Dad subscribed to the Wall Street Journal, and every day I would spend the afternoon reading it with him. Since I spent a lot of my time with my Dad talking about finance, I slowly built an interest in that industry.”
in another, which I swore I saw on a website for making elevator pitches at some point…
“I have been interested in finance since high school. I make sure I read the Wall Street Journal everyday and talk with my peers about articles that catch my interest. I am a [some leadership position] in [name of school investment club], the school investment club. We manage [some number].”
Apart from an apparent fascination with the Wall Street Journal, a lot of the people claimed that they like to talk about finance on a daily basis. I’m sorry, but all too often people look at me with a really? look when I start talking about finance at the dining table. In fact, I can rarely remember that many people at all that showed interest in continuing finance conversations with me. Maybe I was just hanging out with the wrong people.
This event was actually when I started noticing a something wrong with my logic. I always thought people were in it for the money. Even some of my friends outright tell me, “Yeah, I’m in it for the money.” There’s nothing wrong with finding a good job to pay for your college expenses and live a good life (though there are some certain setbacks for the employers). I was extremely surprised when I started to unearth a variety of other responses. One of my closest friends, Stan, revealed to me for the first time that day that he really enjoyed the power all senior bankers seemed to end up with. Another student I met that day told me she likes the prospects of a steady path of progression. Many others noted the abundance of finance jobs readily available out of college. Everyone, it seemed, desired a high degree of certainty over where they ended up after college. I realized, given the diversity on campus, there has to be a good deal of people who don’t choose jobs based on money alone. And if they were in it just for the money, then why not work on an oil development project in a foreign country, start a company, or become a doctor/surgeon?
My theory is that college students, uncertain about their lives beyond college, seek certainty. Problem with the above three jobs: one has a good probability your life will be in danger (from kidnappings, shootings, or what not), one has a high probability you will end up back in your parents basement, and one requires you survive medical school. With financial services shoving benefits in their faces, and showing how within reach they are, they naturally attract top performers in college. Good grades doesn’t mean you are immune to the pull of a “stable, good life.” This almost creates a sad irony: the students making the riskiest bets in our economy may actually have ended up in finance because they wanted a low-risk solution to a good and stable life.
I’m not surprised either. After being in the protective womb of your family up until high school, and then being within the walls of college that isolate you from harsh society, you want something to be waiting to take you away to a “happy place” after you graduate. Never, after your undergraduate career, do you want to expose yourself to the harshness of the real world. This is probably why banks like recruiting other majors as well. Many kids understand the practicality of getting a job, yet want one last chance to study something they love. The banks know they are smart enough to do excel spreadsheets (or do you even need to be that smart to make models on excel?), so they give them the freedom to study what they want in college, and accept them into their “loving” arms after undergrad.
As I left the event with Jimmy, he complained: “what’s so attractive about making 100k? I didn’t enjoy this event at all, if it weren’t for the food.” I replied, “it’s not about making 100k, it’s about knowing you can make 100k.” No matter your university, if you had the privilege of being at a “target school”, the certainty of a good future was too hard to resist. They even outline specifics, and give examples as to what they want on your resume. The road is practically laid out for you, and anyone with a work ethic who can follow directions can easily walk into an ibanking job (well, I’m including non-tier 1 ibanks here too). Imagine this to yourself, and tell me if you can resist this offer:
After getting out of undergraduate studies, you are rewarded for your hard work with one of the highest salaries straight out of undergrad. You have a path laid out for you, and you work yourself up the corporate ladder, and get pay raises reflecting how hard you work. You will definitely earn more in a similar position at a non-financial firm. You will work many hours a week, but you will be rewarded with generous benefits and a large bank account full of money you saved so you can retire when you are 35.
Believe it or not, this is how my friend Bob justified why he took a path in finance. He added, “And it kinda sucks if guys who did worse than you in college were making 100k, while you weren’t.”
This kills me. Every time I hear this, I die a little bit inside. Again, I’m a proponent of people going into a job because they truly love the field. I simply can’t believe 30% of the University of Chicago is interested in finance when I can never find anyone at all to have a serious finance conversation with. I unfortunately have to impose upon you a rather gruesome analogy.
DISCLAIMER: If you represent a financial firm and are offended, I am very sorry for this metaphor, but unfortunately, my classmates’ stories make me feel this analogy rings true.
Anyways, here’s the reality check: financial firms are like the girls that are hot and likes playing with guys. You kind of enjoy sleeping with them, but you know you won’t stick with her for the rest of your life. You each gain benefits off each other, and you part ways. There is no love in your relationship. The power structure works in a similar way as well: she “recruits” you by seducing you into submitting a “resume”, and you see if she decides to hook up with you. If she decides to hook up with you, you begin a mutually beneficial but abusive relationship. She’s late for meetings, makes you stay up doing stuff for her, but gives you really, really good sex. She gains the power of controlling you and reinforces her image as a girl who can push guys around.
The state of finance just makes me sad: there are too many hook-ups for the sexual benefits, and not enough true love out in the industry. A rational mind would know that on the long run, a relationship like this is not beneficial for both parties. But then again, who can turn down good sex/good pay?
I hope college students can slowly begin to reexamine their preferences before they make the plunge into finance. I think recruiters should reevaluate their hiring techniques as well. The financial services recruiting process is has incentives as bad as the incentives in a bad college hook-up. I hope HR departments are bothered by this fact.