Investment banks and other financial services firms like to paint their graduate recruitment programmes as meritocratic processes, suggesting that the nepotism and elitism associated with the sector in the past are now consigned to an ugly era of history.
However, a bountiful supply of relevant work experience is the best way of eventually securing a full-time role, so what if the easiest way of attaining this is to pay for it? Hedge fund Man Group and investment bank Oppenheimer have signed up to a charity scheme that auctions work placements to the highest bidder.
Jill Shaw Ruddock, a former investment banker, now runs charity the Second Half Centre, which offered a week’s work experience at seven firms – including the two finance companies above – to parents willing to pay around £5k.
A week at Man Group or Oppenheimer is more likely to provide you with a valuable insight into the financial sector, and some contacts, than it is a fast-track to a career in the City. However, it highlights how it helps to both be both affluent and connected to get the first leg up towards a finance job.
Paying for internships is not unprecedented; at the Conservative Party’s Black and White party in 2011, attendees paid between £2-3.5k for work placements for their children at hedge fund Caxton Associates, interdealer broker ICAP, Arbuthnot Private Bank and CMC Markets.
Putting a price tag on it may make the whole process more contentious, but nepotism still exists within the City. An overt example of this is at wealth manager St James’ Place, which last year started the ‘Next Generation Academy’, specifically aimed at the children of current partners.
Less obviously, though, the recruitment process is weighted towards those from more affluent backgrounds, whose parents are more likely to give them pointers on the various hoops they have to jump through – the right extra-curricular activities, work experience throughout, or even before, university, choosing the right college and subject – than those from poorer backgrounds.
Financial services firms are, at least, beginning to acknowledge this. J.P. Morgan launched its Residential Internship – aimed at A-level students from poorer backgrounds – this year, while Goldman Sachs spent nearly £600k last year providing scholarships to disadvantaged students. Credit Suisse, Deutsche Bank and Lloyds Banking Group all have similar schemes.
Still, only a few hedge funds recruit graduates directly and those that do are notoriously selective. Narrowing the candidate pool to those who can afford it doesn’t sit well.
The place auctioned by the Second Half Centre was just one of many internships offered at Man Group this year. A spokesperson said that: “Internships are available on a case-by-case basis to a range of applicants”. Oppenheimer didn’t immediately respond to requests for comment.