William Cash pens an ode to the financial private client Zeitgeist ahead of the publication of the Spear’s 500 2017.
The Big Bang City revolution of 1986 — exactly thirty years ago — was a game-changer that allowed the City to become not only de-regulated but a brave new world of graduate opportunity. Today, it is very different: with much tightened regulation, tough new ‘ring fencing’ of the old casino banking system (separating investment banking and retail banking), salary dives, banking scandals of the Panama Papers and Libor, and ‘the War on Wealth’ giving lawyers and politicians the upper hand. Banking holds nothing like the appeal it once did for graduates.
The American, Japanese and European banks transformed London 30 years ago from being a Square Mile of City men to the global financial capital of the Metropolitan Moneyman. Since the Big Bang, London has not only enjoyed a new financial renaissance but also experienced something nobody expected when they attended graduate career fairs in the mid-1980s: the ‘recapitalisation’ of London, not just culturally but also architecturally as the stage was set for an invasion of global banks (led by the Americans) that changed the social landscape of London.
People sometimes carp that the financial services community don’t ‘contribute’ to society in the same way, say, as entrepreneurs or other middle-class professions. But I disagree. The financial services revolution that began with the Big Bang in October 1986 was every bit as radical and important as the cultural and social revolution of ‘Swinging London’ in the 1960s (Carnaby Street, Chelsea, and the Beatles), which captured the Spirit of theAge just as the film Wall Street and Tom Wolfe’s novel The Bonfire of the Vanities did in the 1980s.
The 1980s and 1990s invasion of London by an armada of foreign banks, private equity houses, asset management boutiques — and later hedge funds —created not only the largest new graduate job market since 1945, but also nothing less than a new professional class with its own dress uniform and professional tribal habits that have reinvented the idea of what it is to be a ‘banker’, or to work in financial services today.
The biggest change today is that whereas 30 years ago, every graduate wanted to be an investment banker, now the best graduates are not so much pursuing careers in investment banking, but in wealth management. That is a major revolution in itself as ‘wealth management’ was long seen as the Royal Navy of the financial services industry as opposed to the glamorous crack SAS troops of investment banking. In the 1980s it was easy to see why people wanted to work for big American banks as they were so well paid.
In Liar’s Poker, Michael Lewis described life working in New York and London as a young investment banker for Salomon Brothers in the mid- to late-1980s, at a time when a generation of Ivy League graduates barely considered any career other than banking. Having read art history at Princeton, Lewis admits he only applied to dozens of banks as ‘I was frightened to miss the express bus on which everyone I knew seem to have a reserved seat’.
This was exactly the feeling I recall from watching my friends and contemporaries stampeding to attend the banking ‘milk rounds’ at Cambridge in the 1980s. Whilst I thought it mad that anybody would want to spend their summer holidays working as a slave-like intern for an American bank, this was the norm. Just as the idea of selling bonds as a career choice would have seemed incredulous to any college-educated East Coast Wasp in the 1960s or ’70s, so it was that very few top graduates in the 1980s or ’90s would have applied for jobs in the wealth management industry. They wanted to be hedgies, corporate raiders or investment bankers.
But that has all changed now as our new 2017 edition of the Spear’s 500 (launched at the Dorchester on November 1) proves with so many of the highest graduate achievers shunning investment banking for private client service work.
This post-Big Bang generational migration to London was not just an Oxbridge or Ivy League graduate affliction. Following the Big Bang of 30 years ago, it was the same at universities across Europe — from Barcelona to Paris, Zurich to Milan. All business or economics degrees led to London, whose de-regulated stage made it the new global capital of upward social and financial mobility. In 1986, Lewis recalls being asked to address a group of LSE students on the bond market. After his talk — packed with students — he was besieged ‘not with abuse but with questions about how to get a job at Salomon Brothers’.
By 1987 the firm was employing over 900 people in their vast glass aerodrome of a trading floor beside Victoria Station. Indeed, what has changed perhaps most notably since 1986 is the Americanisation of London. The towering glass skyscrapers of Canary Wharf and the City have come to represent the Wall Street-ification of London. Which is why a recent social report that banks discriminate against graduates who turn up to interviews in brown shoes and ill-fitting suits is not simply trivial.
The media who reported it as evidence of elite snobbery against the working class missed the more important point about money men dress codes: the navy suit, white shirt, Hermès tie and black loafers look has been the global uniform of the international money man class for nearly three decades now. Turning up for an interview in brown shoes would be like saying you have never heard of the FT. No would-be banker to a global citizen wears brown — that much even I would have known back in 1986.
William Cash is editor-in-chief and founder of Spear’s magazine. The Spear’s 500 2017 edition will be launched on November 1.