Investment banks are used to losing their juniors to private equity after a few months, they expect them to eventually embrace their inner entrepreneur, but what if they quit for…just another job?
The new thing among analysts and associates in investment banking is to leave the industry to work for a tech company. These are not small start-ups, or precocious ex-junior bankers running the show – they’re simply switching into regular roles at established firms.
The latest example is Alex Robinson, an associate in Citi’s equity capital markets team in London. He’s just taken a role as a business analyst at ‘ridesharing’ app Gett. This follows Bank of America Merrill Lynch analyst Ilja Moisejevs quitting in March to join payment firm GoCardless as a project manager and a whole host of junior bankers quitting to join food delivery firm Deliveroo.
What gives? One junior banker who has just quit for a tech company tells us it’s a combination of factors. “When you reach associate, you hit a learning barrier,” he says. “I see senior associates and VPs and they’ve just stopped progressing. It’s the same with work-life balance – it doesn’t change as you move up. Not a life I want to lead in the long-term.”
Tech firms, by contrast, offer the “chance to learn about real business decisions, corporate growth and development at a very young age”, he says.
The recent moves suggests that analysts and associates are heeding the advice of former senior bankers who say that the glory days are gone and clever, technically astute 20-somethings should better utilise their time elsewhere. Kerim Derhalli, the former head of global equities trading at Deutsche Bank, told us recently that students should target companies that are “disrupting the value chain”, rather than working for a bank.
“A traditional career in an investment bank doesn’t make sense any more – yes, go and get some training there, but then leave and find a part of the industry that’s ripe for disruption,” he said.
More pragmatically, junior bankers say they make the leap in their early career before they become tied down by fixed costs like mortgages and kids.
“My generation is about developing a broad skill set and expertise in your 20s rather than a specialised defined skill,” says the former associate. “This has become increasingly clear to me in my new role.”
Banks are wise to the fact that more juniors are heading out for something new. They’ve accelerated promotions for analysts, promised less spreadsheet grunt work and made their senior bankers more available to feedback from juniors.
Still, the associate who left for technology tells us that banks’ main technique is to “throw money at the problem”.
“Straight out of university, I think that people blindly make choose a banking job without any real comprehension of what it entails,” he says. "The analysts that really get it tend to excel. Some make the choice to stay, whilst the majority look at alternatives.”