Getting a job in financial services has undoubtedly become more meritocratic as diversity programs at large institutions take hold. But in a world where relationships and personal connections still matter, do firms secretly prefer to hire the upper classes?
Financial institutions still want people who can connect with the blue-blooded wealthy in the UK, the powers that be in places like China, the sheikhs and family offices in the Middle East and the top level of society in the US.
A case in point is illustrated by author Oliver James in his book “Office Politics.” James tells the story of an investment banker called ‘Charlie’ working for a US institution in London who tries to fool his lower class boss into believing he is well-connected to “old money” in the UK
“He wasn’t a complete impostor – he’d attended Cambridge and a top UK school – but his boss made it clear that in order to have his ‘dream team’ he wanted a well-connected toff, so Charlie played up to this and dropped in fake references to weekends at grand country houses,” said James. “The City is much more global than it was, but its spine remains very upper class.”
Plenty of UK gentry work in the financial sector. Lord Frederick Windsor, son of Prince and Princess Michael of Kent, is a vice president at J.P. Morgan in California; Matthew Oakeshott, or Baron Oakeshott of Seagrove Bay, is investment director of Value and Income Trust plc in the UK and David Freud, a life peer and great grandson of Sigmund Freud, was formerly vice chairman of investment banking at UBS in London.
Upper class connections also count outside Britain. In China, the so-called ‘princelings’ - descendants of Mao’s generals who wield massive influence in the country – are prominent in the financial sector. A number of the second generation have risen to senior positions in local institutions. Liu Lefei, son of Liu Yunshan who is in charge of ideology and propaganda in the Communist Party, was until recently chairman and chief executive of Citec Securities. Liu Xiaoyuan, daughter-in-law to economy reformist Deng Xiaoping, is vice general manager of Beijing Investment Consultants.
The grandchildren are also taking positions in western locations. Li Wangzhi, the forgotten son of expelled Chongqing leader Bo Xilai, worked at Citigroup and Chen Xiaodan, granddaughter of Chen Yun, attended Harvard, worked at Morgan Stanley in New York and was recently recruited by private equity firm Permira Advisers in Hong Kong, while her brother Chen Xiaodin is a Stanford MBA who was formerly at Citigroup.
Wall Street is, of course, littered with examples of successful bankers who weren’t born into prominent families, but have pulled themselves up with their bootstraps. John Mack, Morgan Stanley’s former chief executive, started out as a clerk after gaining a football scholarship at Duke University. Sandy Weill, the former Citigroup CEO, began as a runner at Bear Stearns.
But even in the US, which prides itself on equal opportunity, the financial sector prefers the privileged. According to a 2012 study published by Lauren A. Rivera from Northwestern University, the recruitment process remains slanted towards those from an upper class background. Rivera, assistant professor of management and organisations at the school, interviewed over 100 Wall Street professionals for her research.
Most banks only visit top universities for recruits. They then spend more time screening applicants on their extracurricular activities – rather than skills or qualifications – to ensure that the candidate is the right cultural fit, something which is also assessed through the interview process, according to her study. This essentially means the people recruited are similar the people doing the hiring.
“Successful candidates therefore needed to possess enough cultural breadth to establish similarities with any professional with whom they were paired, but also enough depth in white, upper-middle-class cultural signals to relate to and excite their overwhelmingly white, upper-middle-class, Ivy League educated interviewers,” she writes. Rivera declined to be interviewed.
James said in an interview this same cultural hegemony is encouraged in the UK in the City. “If you look at the expensive, tailored suits and shirts, it’s essentially the uniform of the Sloane Ranger – something that was written with good humour, but has been taken seriously by too many people. British people not from a privileged background adjust their accents and behaviour – there’s a real pressure to conform.”
Another way to succeed in finance if you're not from the upper classes is to marry into them. Wedding royalty is even better. Sometimes, given the circles finance professionals travel in, the marriage vows come after the finance job.
Prince Willem-Alexander, who is set to succeed the throne in the Netherlands after the abdication of Queen Beatrix last week, is married to Maxima Cerruti, previously an investment banker at Deutsche Bank in New York. Chris O’Neill, partner and head of research at hedge fund Noster Capital, is set to wed Sweden’s Princess Madeleine this year. Kelly Rondestvedt was working as an investment banker at Morgan Stanley in New York until 2009 when she married Prince Hubertus, the Hereditary Prince of Saxe-Coburg und Gotha, who himself worked in wealth management in New York.
The financial industry wants to employ people who can network effectively with those in the upper classes and invariably this means taking on people with similar backgrounds, said William Hanson, a royal family expert and etiquette consultant.
“The upper classes, particularly royalty, will be very aware of those people trying too hard to network and advance themselves or their business and will not take kindly to it,” said Hanson. “What’s more they’re sticklers for etiquette and will note any social faux pas.”
In other words, to get ahead in finance, it helps to be rich and privileged already.