We’ve been here before. Three years ago, Frank Yeung, an ex-Goldman banker who fled the industry to launch a chain of Mexican restaurants, Poncho No. 8, issued an ominous warning to young bankers: if you stay in the investment banking industry for too long, you get trapped there.
“It became clear that deferred bonuses contributed to people’s tendency to continue in roles they didn’t find fulfilling,” Yeung wrote. “In my first year, some of my bonus was set aside as shares which I wouldn’t be able to access for another two years. And in those two years, I’d get twice that again, and again…Before you know it, you’ve amassed too much money to walk away from.”
Three years later and another banker, who’s also left Goldman Sachs, is warning much the same thing. Except he puts a date on it: if you stay in banking beyond 30, you’ll probably be stuck there forever.
“I resigned from Goldman Sachs willingly,” Arnold (not his real name) told us. “I felt the need to do something different and more meaningful. You’d be surprised how widespread that feeling is at Goldman – especially among the young guys.”
According to Arnold, the number of junior bankers resigning from Goldman in London this year has been unusually high – something which the bank has not corroborated and didn’t immediately respond to a request to comment on. “At the end of the day, people know that the good years are pretty much over,” said Arnold. “Ten years ago, you could earn an insane amount of money in banking but now the opportunity cost of getting out and doing something you feel really strongly about is just not that huge any more.”
With quantitative degrees from some of the UK’s top universities, Arnold would be a big catch for any other bank. However, he has no intention of going back into finance. Instead, he’s been volunteering in Mexico and plans to move to Silicon Valley. “I’m not married, I don’t have kids and at the end of the day I’m not addicted to any kind of expensive lifestyle. I have the freedom to make these changes.”
Like Frank Yeung, Arnold said it helped that he didn’t have any stock at Goldman to walk away from. He’d only worked at Goldman for a few years and was paid entirely in cash. That was fortunate, he said: “It becomes a lot more difficult to leave banking once you hit 30. Once you have stock and you have a family and a mortgage, it’s almost impossible to get out. I saw a lot of older people there who felt very trapped.”
Dom Jackman, founder of website EscapetheCity, which helps bankers and other corporate types leave their desk jobs for something more interesting, said around 70% of their escapees are under 30. However, it’s not so much age as procreation that restricts escape options, said Jackman. “It’s children that really stop people from doing anything extravagant” he told us. “We had one man and his wife who took their child to Nepal, but that’s the only example of a parent escaping the City that I can think of.”