There’s no doubt that people who work in investment banks are incredibly well paid. After three years in a front office role, median pay in London is typically around £75k ($114k). After seven years, it’s around £120k. That’s a lot, particularly considering the median salary across the UK is around £27k. With first time buyers now needing £140k salaries just to get on the UK housing ladder, banking is one of the only industries that will let you do that.
However, compared to the recent-ish past in banking, £75k isn’t much at all. Famously, Kareem Serageldin – the jailed ex-global head of structured credit trading at Credit Suisse, earned $7m in 2007, aged 35. Kweku Adoboli, the also incarcerated ex-UBS trader, earned £350k aged 31. It’s not necessarily that there’s a correlation between high pay and wrongdoing, it’s just that pay figures are made public during court cases.
Banks today are therefore having to disavow youths who would work for them of the notion that they’re going to get rich quick. Colm Kelleher, head of Morgan Stanley’s investment banking business, made this very clear yesterday during his presentation at the BAML banking conference.
Traditionally, banking was about building a long term future not making money in the moment, Kelleher said: “It wasn’t a business you joined where you got rich quick and could buy a Ferrari at age X. That happened… in those leverage years from ’97 to ’07.”
If you thought banking was a route to quick riches instead of a long and patient slog, you’ve therefore missed the boat. And Morgan Stanley wouldn’t want you anyway. Between 1997 and 2007 the company, “attracted a lot of people who probably should never have been in banking,” Kelleher added.
Photo credit: Albert