Senior bankers have become archetypal curmudgeons. Get them alone, disentangle them from the corporate PR machine, and at some point a variation on the same refrain will appear from their lips: banking is less fun than it used to be, all the fun has gone from banking, bankers are being stifled by tedious regulation, banking is no longer exciting, no one really wants to be in banking any more.
Perversely, the de-thrilling of jobs in banking may be having the opposite effect to that intended by banking regulators. Now that working in banking has become less exciting than watching 24 hour news coverage of the royal birth, people are only really in it for the money. Banking is no longer about fun, it’s about functionality – collecting the big salary and going back home again. Paul Fraser Collard, the Deutsche banker who’s been writing novels on his commute suggested as much in his interview with Bloomberg yesterday: “Banking is still the big job that pays all the bills and looks after the children,” he reflected.
It’s not just regulation though, there are plenty of other reasons why banking jobs have become tiresome instead of titillating. They are as follows.
1. The workload is higher than ever
Following a period of intense cost-cutting, bank are doing more with less. Salespeople are covering more clients, researchers are covering more stocks, junior M&A bankers are being put into pools and picked to work on deals in sectors they may have little experience in. It is all taking its toll. Karin Peeters, a life and executive coach in London, says many of her banking clients are “struggling with an enormous workload” and would be very thankful if banks hired a few more people to help spread the burden.
2. There’s less chance of getting a promotion
Not only are junior and mid-ranking bankers working harder than ever, but they have less chance of making it to the top. Most banks have too many expensive senior bankers and are trying to address this by making fewer promotions. Goldman Sachs has reduced the frequency of its managing director promotions from annually to bi-annually. Morgan Stanley only promoted a few more managing directors this year than during the peak of the crisis in 2008.
3. Obsessive and über-competitive young people are pushing up behind them
If you get an entry-level job in banking now, you will have seen off 135 other applicants to get the role. The graduates who get a place on banks’ training programmes are therefore by definition very good and very competitive. The exhausted people already in banking jobs are under pressure from these extremely competent, extremely competitive, extremely energetic youths who want their jobs and are a lot cheaper than them.
4. It’s crazily political
Insiders complain that banks are even more political than they used to be. Although second quarter revenues have shown signs of recovery, the industry has been in shrinking and cutting costs for years. It’s become about watching your back and watching who you know.
5. It’s very stressful
In our survey two months ago, 57% of bankers in the UK complained that they’d become more stressed at work in the past year. 71% also said they had too much to do (see point 1).
6. They won’t be able to retire young
In the past, it used to be possible to work in banking for just over a decade and then get out. Geraint Anderson, the ex-Dresdner utilities researcher, retired aged 35 in 2008 with £2.5m of net assets after receiving £500k in cash bonuses for both of his last two years of work. Nowadays, bonuses are smaller, bonuses are deferred over several years and bonuses are subject to clawback even after you’ve left. Bankers still retire comparatively young, but retiring in their 30s is almost impossible. Chris Arnade, the ex-Citigroup foreign exchange trader-turned-photographer says ex-colleagues of his are retiring at 50. Banking has become a longer and more exhausting game.
7. They’re ignored at parties
Banking is no longer the kind of career that allows you to win friends and influence people. Anshu Jain, co-chief executive of Deutsche Bank, complained about this last year. “If you go to a party these days, you’re asked what you do and you say you’re a banker, people go all quiet,” Jain noted.
8. They’re ignored on dating websites
Bankers are not the average woman’s idea of a desirable date. A survey earlier last year by Match.com found bankers were missing from the list of women’s preferred professions and that most single females favoured firemen, teachers and musicians instead.
9. They’re getting fat
It’s hard to be buff in banking. A study by an American academic found that most young bankers work stupidly hard to the detriment of their health in their first three years in the industry. M&A is worst for weight gain. One ex-M&A banker told us he was only able to shift his M&A weight when he lost his job and finally had time to exercise.
10. They’re getting bald
Banking is not just a cause of weight gain – the U.S. study of bankers’ health also found it to be a cause of alopecia.
11. They feel stuck
Few other industries offer salaries comparable to those in investment banking. Once you’ve been in banking for a few years and have amassed big spending commitments, it’s hard to find an alternative high paying career. People feel stuck. They can’t even move to banking jobs in Asia any more.
12. They feel like accountants
Trading used to attract some creative, fun, zany types, who turned their intelligence into novel ways of making money. The end of that era may be no bad thing from the perspective of financial stability, but it’s ushered a new era of tedium. Working in banking has become like working in accounting – but with higher salaries.
13. They feel like corporate bankers
Banks like J.P. Morgan, Bank of America and Barclays have encouraged their M&A bankers to work a lot more closely with their corporate bankers. This has caused problems: elitist M&A bankers who don’t like having to fraternize with their lowly corporate banking colleagues.
14. IT geeks are earning more than them
Bankers used to be masters of the universe. Now, people who work for Google or Facebook have occupied that slot. When students express their preferences regarding the best companies to work for, Google regularly features above Goldman Sachs and J.P. Morgan. Earlier this year, Lou Motilla, a VP in commodities trading at Morgan Stanley in London, had his bonus dramatically eclipsed by his teenage son – Nicholas – who sold his technology business to Yahoo for £20m.
15. Technologists in banks are earning more than some traders
As more banking processes are automated, success is becoming less about client relationships and having great trading ideas, and more about knowing how to programme. The investment banking stars of the future will be in IT. Most banks now have dual heads for their trading businesses: one person knows about the market, one person knows about technology.
16. They’re being replaced by machines
Fixed income trading is going the way of equities and FX trading and is becoming automated. If you work in fixed income sales in particular, you are at risk of losing your job as clients opt to access markets directly, without your intervention.
17. Consultants are doing just fine
Bankers and consultants have an historic rivalry, with many attending the same elite universities and choosing divergent career paths. While bankers have been vilified and roundly blamed for the financial crisis, consultants have been doing just fine and have developed a strong line in restructuring banks. HSBC and RBS are among the banks to have called in the consultants. Morgan Stanley is now led by James Gorman, an ex-consultant with McKinsey & Co.
18. They’re led by grey men
Once upon a time, banking bosses were exciting and charismatic. One ex-Barclays trader says he witnessed Bob Diamond stand on the trading floor and rally his troops with a fluent hour long speech, for which Bob required no notes. Now, Barclays is led by Antony Jenkins, an ex-retail banker who likes Powerpoint slides and managerial platitudes.
19. They feel blamed
Bankers are everyone’s favourite villains. Even the Archbishop of Canterbury says they are victims of ‘lynch mobbism.’
20. They can no longer engage in outrageous chat
The foul-mouthed Libor emails and messages sent by bankers at UBS and elsewhere may have been symptomatic of cultural dissolution in banking, but they were also were also suggestive of the irreverent and (sometimes) humorous way (male) bankers addressed each other. There is none of that now. Some people will miss it.
21. There’s far less food
Costs have been cut, and with them meal allowances. Credit Agricole capped bankers’ spending limits on hotels and food earlier this month. Most U.S. banks still offer meal allowances, but they’re smaller than they used to be and you have to work late in the evening to get them.
22. Their parents are not impressed
Now that banking is no longer up there with working in Google or getting a job at the BBC, young bankers are having to persuade their parents that they’re doing the right thing. Old bankers are having to do the same: Stephen Hester, the soon to be ex-CEO of RBS famously said that even his parents thought he was overpaid.
23. Their children are not impressed
Even if you work in banking and have successfully paid for your progeny to attend private schools and elite universities, your career may not command their respect. Brad Hintz, a senior US equity researcher, said yesterday that he’d tried to persuade his 20-something son to take up a career in financial services, but failed. His son went into consulting instead.
24. They can’t move jobs for more money
In the past, it used to be possible to move from one banking job to another in return for a substantial increase in pay. Not any more: the UK banking regulator has specified that in London at least, ‘code staff’ can’t move jobs for an uplift in compensation – they need to earn the same in their new job as in the old job. This has reduced the incentive to swap roles and contributed to the feeling of being stuck (see 11). It has also led to bankers haggling over pitiful non-monetary extras, like parking spaces.
25. They’re being managed out
In the past, banks were lazy. If they wanted to get rid of someone, they’d simply offer that person a chunk of money to leave, ask them to sign a form agreeing not to sue for unfair dismissal and be done with it. Now, however, senior HR people in banks tell us organisations are more willing to go through the hassle of managing people out on the grounds of poor performance. In this instance, there’s no need to pay a severance package after all.
26. They’re spending the summer holiday in a friend’s spare room
Pay in banking is still high, but it’s not as high as it was. Bankers with existing spending commitments – from school fees to mortgages – are finding that they can no longer afford lavish holidays in Mauritius. One told us he broke the Mauritius habit and opted to stay in a friend’s empty room instead.
27. They can’t afford a flat
Junior bankers may be working 12 hour days and earning six figures, but this doesn’t necessarily mean they can buy a house within easy commuting distance of work. Traditional banker-spots like Kensington, Fulham and Notting Hill have been infiltrated by oligarchs. One French banker confessed that he’d been forced to move to South London instead.
28. Former colleagues keep linking in to them because they want jobs
Gary Cohn, COO of Goldman Sachs said two months ago that 80,000 people had lost their jobs in banking globally since the start of 2011. If you work in banking, those 80,000 people are all on LinkedIn ‘looking for new opportunities.’ A large part of your day could easily be spent thanking them for endorsing your skills as a credit trader, or responding to their invitation to link up and then meet for coffee.
29. Recruiters only call to map the market
In the old days, recruiters used to call with jobs. Now they only call to inquire who you’re sitting next to.
30. They’re inhaling mould on the way to work
There are fungal problems on London’s tube lines. Both the Central Line and the Jubilee Line have the highest proportion of fungal spores. Coincidentally, these are the lines to the City and Canary Wharf.