There is an arc to a banking career. Do well and you'll be a vice president by the age of 30, a managing director by the age of 35 and a head of business 10 years later. Do badly and you'll be out - maybe in your 20s, maybe in your 30s or early 40s. The later you're ejected, the worse it will be: if you're going to build a career in a different industry, you might as well start young.
Recruiters, bankers and academics, point to three key phases of finance careers. If you want to own your career and to thrive and endure, here's how you need to play them.
The first years of a banking career - the post-university phase in your early to mid-20s when you're an analyst or associate, are all about excellence, attention to detail and hard hard grind.
"As an analyst or associate, you need to be excellent at the technicals of the job," says May Busch, a former COO of Morgan Stanley Europe who now provides careers advice to finance professionals. "You need to nail the day-to-day job. If you're in M&A, that's building financial models. If you're sales and trading, that's understanding the financial markets."
Linos Lekkas, head of corporate and investment banking for CEEMEA at Citigroup, said much the same when we interviewed him several years ago. "In your early career you really need to establish yourself as a reliable and safe pair of hands. If you can’t get that right and get the recognition you need as a solid base, you’ll be seen as talented but possibly unreliable," Lekkas explained.
Pitfalls: Burnout is an omnipresent issue during the technician stage of a banking career. A study by University of California academic and ex-banker Alexandra Michel found that young bankers compete against themselves and others so intensely that they suffer from symptoms of physical collapse in the first three years. Years four to six are then characterized by actual physical breakdown, said Michel. Thereafter, young bankers either learn to manage the workload and their physical needs, or drop out.
If you can survive physical exhaustion, you may also succumb to mental fatigue as a technician. The work of analysts and associates can be boring - especially in investment banking divisions (IBD), where you'll be forever building financial models. It's not uncommon for people to leave the industry because they're bored as well as exhausted.
If you can survive as a technician and can the master requirements of your role, you need to start looking around at where your talents can be put to best use.
"Figure out where your natural home is," says Busch. "You need to be 'good enough' at your core job and then you need to be exploring the organizational landscape and looking at where you're really going to work best. You don't want to end up in a job that emphasizes your weaknesses - look to the roles where you have natural ability and lean in to those."
The explorer years, which start when you're a mid-ranking associate and continue until you're a junior VP, are also about building relationships and networking within the organization. At this stage you need to be looking for mentors and sponsors who will support you and help give you exposure to the roles where you can really excel.
These are also the years when you should think of swapping firms. If you're in second or third tier firm, move to a bigger brand. If you're in a team that's not executing any deals, move to one that is.
Pitfalls: The biggest pitfall for an explorer is not exploring. It's easy to get bogged down in work. Don't. If you fail to find sponsors or to position yourself in the right role, you'll regret it later.
Starting in your late 20s-early 30s and lasting until your 40s, the marathon running years are the crucial phase of a banking career. With luck, they will take you through from junior vice president (VP) to managing director (MD). At this stage you need to, "hit the ground and run hard," says Busch.
This is when you need to start generating revenues for the bank. If you're in IBD or sales, this is when you need to develop your own clients and relationships. You need to become known for your deep knowledge of a particular sector and you need to build a 'track record of success'. If you're in trading, you need to establish yourself as a product specialist who can be trusted to make a good P&L within the bank's defined risk parameters.
Throughout the marathon period you also need to network across the organization and build relationships with sponsors and stakeholders.
If you move jobs as a marathon runner, you need to put in some heavy due diligence. You don't want to move to a role where you cant cover the ground. Do as much as you can to ensure that you will have resources and support in the role you're moving into. "It can be a matter of luck," says Clive, an ex-J.P. Morgan managing director. "I changed jobs twice into senior roles where I'd been promised big things by the enthusiastic and reassuring people who hired me, only to find that they left within a matter of months and the business didn't have the appetite they'd claimed."
Ideally, if you're swapping jobs at this stage, you need to move into an organization where you already have an established sponsor - the ideal is moving to work with a previous boss or colleague who's already part of your network.
Pitfalls: Careers falter at this stage if the 'explorer' period didn't involve any decent exploring. - If you're in the wrong job at the wrong firm without people to support you, you won't progress.
Busch says careers also falter due to a lack of patience and a lack of understanding of the need to continue building internal networks. "I see people derail at this time because they haven't built relationships with colleagues," she explains. "They think that just putting your head down and doing the job well is enough - it's not." At this stage you need to start managing your career a lot more proactively: "As an analyst and associate you're in a sort of managed pastoral programme. This changes when you're a VP - there's not that career support," says Busch.
Marathon runners are also susceptible to bad luck. If they're running with a product like credit derivatives that falls out of fashion, they'll be off the track. If their sponsors leave the organization, they'll find it difficult to progress and the pace of their career will slow and eventually stop. "There's a lot of luck here," says Clive. "You're either in a business area that's doing well, or you're not. You either in a position where there are promotional opportunities, or you're not - in which case you'll need to swap firms."
Sages are at the pinnacle of banking careers. Established managing directors with a strong client base, they have learned to network both internally and externally. "It's a mixture of application, luck and aptitude," says Clive. "The people who get here work hard, do well and don't annoy people. They are the people who, when things are rocky, are well-regarded in the organization and seen as a pair of safe hands."
Sages are typically in their late 30s or 40s. "They have internal sponsors," says Busch. "They have received feedback along the way and have acted upon it so that they've grown and improved. They will have a combination of excellence in the role and strong trusted relationships with both internal and external stakeholders. And they will have delivered results."
Busch says bankers who have achieved the position of sage are adept managers of human emotion. "They have learned how to disagree without becoming disagreeable and are good at influencing things constructively. They don't whinge or complain and they don't present things in black and white - they say here's a problem and here's the solution and the opportunity."
Pitfalls: For all their attributes, Sages can be vulnerable because they're expensive. If their area of the market experiences a downturn, they will be out. Life as a sage is all about prolonging your earning potential for as long as possible. At this stage, it may be apposite to switch firms and to go for a lower tier organization in need of your wisdom - but only if they pay you. "If you're excellent and a second tier company is prepared to pay you a lot, it can be worth moving," says Clive. "But there's a big risk - you might never come back to a top bank and it could end your career."