What sort of people work in finance?

posted in: Careers, Economics, MFin | 1

Cambridge University’s Judge Business School has a strong collaborative ethos. So for example students are not “incentivised” by being told their grades relative to each other. We tell them the actual mark, the class mean and standard deviation but no ranking. The view is that there is plenty of competition out in the rest of the world and there is more to be gained by learning together while here.

This has worked fine on the MBA for some years. But we think we’ve noticed a more competitive spirit on the MFin. As we only have two classes of data to go on, this is rather provisional. But it would not be surprising given that we recruit mainly from the finance industry.

Some (not mutually exclusive) hypotheses.

  1. It is more competitive to get into finance in the first place so only very ambitious people succeed.
  2. The work content and culture in finance encourage people to be more competitive than in other industries.
  3. The kind of people who want to take a year out to study finance further are particularly ambitious and competitive.

I’m not sure if one or more of these apply and it may be something to do with our interview process in any case (we tend not to take people who are very quiet or shy, simply because they are unlikely to succeed in this business in the future).

At one famous investment bank I worked for,  senior managers would send out their thoughts about success. One vice chairman emailed us all to say that the only way for junior staff to distinguish themselves was to work harder.  He argued that, since everybody was pretty intelligent, you were unlikely to be able to stand out by being or looking smarter. Only working harder and longer hours would work. But of course if everybody does this you end up with the sort of long hours tyranny so common in corporate finance departments (though not so much elsewhere).  He was unfortunately partly onto something, which is the fact that individual contributions to output (revenues, client satisfaction, deals etc) are very hard to assess, especially at the junior (pre-associate) level. Economists are familiar with this problem, which is by no means confined to finance. Personally, I was always grateful to work in the markets area of an investment bank, where there was more potential to get direct client impact earlier on and so to have some tangible link to success.

So there is a danger that some of that culture leaks into the MFin degree and I see some evidence of what to me looks like unnecessary competitiveness. But perhaps that is just an inevitable by-product of selecting from the finance sector. And it has to be said that equity analysts (which I used to be) are among the most hyper-critical, hard to please and competitive people you will find in finance. Not so different actually from academics.

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