Investment banking has never been an overly-friendly career choice for those with a few grey hairs, but junior bankers are now viewing their seniors less as mentors and more as competition.
Call it the rise of Generation Y, which is notoriously impatient and unwilling to wait its turn, or simply investment banks’ habit of empowering junior employees early in their career, but senior bankers need to start looking over their shoulders.
Not only have banks been displacing managing directors and replacing them with more junior staff, particularly at places like Morgan Stanley, but some relatively young financiers have been employing Machiavellian tactics. The case of Tony Shiret, whose exit from Credit Suisse was hastened by an allegedly elaborate campaign by junior team member Assad Malic, is an example of how far some are willing to go to progress their career.
In fairness, Malic wasn’t exactly a young upstart – he was 35 at the time, and wanted to earn more money after buying a new house and starting a young family. It’s a familiar dilemma for banks; how to offer a new opportunity to a younger employee with potential without completely stabbing older workers in the back.
Increasingly, though, younger workers want more experienced staff out of the way. Older workers are now viewed as an obstacle to a career progression, according to a July survey by KPMG, with nearly half (46%) of those surveyed believing they should make way for the younger generation.
“There’s generally a greater sense of entitlement among the analysts signing up to our graduate scheme these days,” said one investment banking MD who declined to be named. “Experience no longer automatically generates respect. In some cases it merely fuels the ambition of younger workers.”
Not surprisingly, employment lawyers are expecting a raft of age discrimination cases in the wake of Shiret’s successful suit against Credit Suisse. It’s questionable, however, whether it’s a particularly wise tactic ousting experienced bankers – even if they are more expensive. Shiret was earning £350k a year, but banks were targeting people earning over £250k last year for redundancy.
In sectors like sales and trading, where survival is all about performance, juniors “naturally feel a bit of resentment if they’re doing better than senior colleagues” said the investment banking MD, but in the capital markets and investment banking divisions it’s a different story.
Philip Southwell, the new CEO of emerging markets investment bank, Exotix and former managing director at Deutsche Bank and Bank of America Merrill Lynch, told us that the early part of an investment banking career “is essentially an apprenticeship” and “getting good deal exposure” is essential. This doesn’t mean getting too involved too early, however.
Similarly, Bradford Gibbs, who spent 13 years at Morgan Stanley before moving to private equity firm Mara Group earlier this year, said that some senior M&A bankers "made me realise they could be role models and I aspired to operate like them...These people created a step change in my development which really put my career on the right track."
“Organisations are not paying for the technical knowledge, they’re paying for deal experience, and this is not something you can learn from a book,” said Andrew Pullman, managing director of People Risk Solutions and a long-standing investment banking human resources professional. “A good advisory professional, just like a good investment professional, usually develops over time. It’s like being in the army – you can’t become a general after a few of years.”
The investment banking MD says that most banks are not simply promoting wet behind the ears juniors to director level: “It used to be possible for wunderkinds to make it to director or managing director in their 20s, but banks want to see both experience and loyalty, and are demanding a minimum tenure at the bank of 6-8 years before handing out promotion to the upper ranks.”
Nonetheless, Shiret’s case demonstrates that investment banking is not kind to those over 50. He has apparently applied to 20-30 brokerages since leaving Credit Suisse with no success. Chris Carpmael, formerly Shiret’s boss and now CFO for EMEA at Credit Suisse, said that employing a small number of over 50s is the “nature of the industry”.