Investment banks would have you believe that they’re hammering ethical behaviour into their employees to ensure it’s no longer all about the money. However, if finance professionals wanted to find a vocation that genuinely has a social impact, there are now decidedly more career options available.
Previously it would have largely meant moving out of finance altogether, taking a side-ways step into the charitable sector or getting involved with schemes like Pilotlight, which encourage executives to pass on their skills to charitable organisations. Now, however, there are more options in social and sustainable investing.
“You will still have to take a significant pay cut if you want to move from investment banking into social financing, but it’s no longer such a step in the dark,” says Ben Rick, former head of Bank of America Merrill Lynch’s European prop trading division who founded Social and Sustainable Capital earlier this year. “There are more people making the switch from a range of finance roles – investment banking, commercial banking and private equity – into the sector in order to do something more meaningful and escape a career where it’s largely about personal enrichment.”
The pay isn’t bad, but it’s still a long way behind the sort of packages being offered in investment banking, asset management or private equity. A senior role in sustainable finance is likely to pay £100k, says Rick, so there will be a lot of positions paying decidedly less than that.
As Rick told us previously, people don’t go into this for the money and after years being motivated by big packages working in the prop trading sector, he decided that he wanted to do something more with his life than purely chase profit.
With investment bankers often caught in a vicious circle of long hours, reliance on large pay packages and an increasing lack of career opportunities, the sector has lost its sense of ‘fun’, according to former investment banker and head of social impact venture capital firm ClearlySo, Rodney Schwartz. Social finance is the very opposite, he says.
“With many experts expecting the sector to grow by 30-40% a year, this is an exciting place with the sort of buzz that was once so much a part of life in the City,” he told the Guardian. “With this growth has come pay levels that are nothing like banking levels but no longer require an oath of permanent poverty.”
There are numerous examples of senior investment bankers making the switch into sustainable finance. As well as Rick and Schwartz, Big Society Capital’s chief investment officer, Jeremy Rogers, was formerly head of European high yield at JPMorgan and Edward Siegel, director of investments at Big Issue Invest, spent much of his career at Credit Suisse.
Now, there are an increasing range of companies to work for in the sector – ClearlySo is recruiting for advisory staff, and Social and Sustainable Capital has been building its team. Then there’s Big Issue Invest, Bridges Ventures, FSE Group, NESTA, PURE Leapfrog, Ananda Ventures and Charity Bank to name but a few.
“There were very few of such career opportunities just a few years ago. We have seen considerable interest from high quality candidates in the jobs we have advertised,” says Keith Starling, CFO at Big Society Capital. “We are seeing an increasing interest from people in the City, both young professionals and more experienced individuals. Generally there is an increasing recognition of now being able to marry up the skill set of a financial professional with the value set of having a career with social purpose.”