The plight of anyone who becomes too comfortable with their banking pay

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complacent banking

If you work in banking, my warning to you is this: don't get too comfortable with your pay. It will be your undoing if you do.

I spent nearly four years working in the structuring team of a major bank in London. And then I got out. Today I work for a successful technology start-up. It was a risk, but in my case it paid off.

I'm in my late 20s. If this is you too, you need open your eyes to the fact that the big money in banking just isn't there anymore for people of our age group. Personally, I think this is good, it means a lot of natural talent is flowing back to areas of expertise (my background was in astrophysics and satellite remote sensing but I ended up in Markets), which will create value.

In any case, when you step outside banking, the world looks very different. The payouts of A-list actors and the wolves of Wall Street just aren’t that impressive among the London/Silicon Valley tech elite. Managing directors at top-tier investment banks may pocket a million a year and be worth tens of millions after a long career. But early employees at tech firms like Uber, Airbnb, and Snapchat can make many times that amount of money in a matter of years. Celebrities such as Ashton Kutcher, Jared Leto, and Leonardo DiCaprio have jumped on that power train and now make personal investments in tech companies. The basketball great Kobe Bryant started his own venture-capital firm. LeBron James has rebranded himself as not just an athlete but also an investor and entrepreneur. This is where the cool is now.

In the meantime, the plight of senior bankers (and part of the reason there is little market for them) is that they become comfortable at excessive salaries that are not market. This means there is no way for them to transition to other sectors whilst maintaining cash earnings.

If you work in finance, you need to be aware of this happening. It creeps up on you in your early 30s. - You will, at this time, earn more than most industries would pay somebody of that age. But unless you are an absolute superstar, you will be hitting the ceiling for what your company will pay you a few years later. When this happens, you need to get out. Your early 30's largely represent the latest time at which you have few financial dependencies, meaning you can take the upfront financial hit in order to have a longer term financial gain.

As one person I know put it "the equity you own in high growth tech is a lottery ticket that you can influence". So should you sacrifice a few £100k of short term earnings for the chance to make tens of millions? - Of course. You also have much more fun whilst doing that with frequent dinners with billionaires, interviews on TV, lunches with top government ministers and constant travel to meet interesting people. You are also hedged, the experience and contacts you get in high growth tech are so valuable that even if the endeavour fails you become professionally very valuable.

Ambrose Archer is the pseudonym of a former junior banker who now works in a tech firm

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com in the first instance. Whatsapp/Signal/Telegram also available.

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