In the aftermath of the "Greg Smith" phenomenon, where now a variety of sources (for now of the terminated kind, but soon likely from those still on the payroll) have stepped up against the Wall Street and D.C. omerta, it is assured that we will see many more such pieces before the coolness factor of public employer humiliation. It is our hope that these lead to an actual improvement in America's criminal corporate culture (such as in "How a Whistleblower Halted JPMorgan Chase's Card Collections"), which is nowhere more prevalent than in the corner offices of Wall Street, long a place where "obfuscation" and "complexity" (recall that it was none other than the Fed telling us that "Liquidity requires symmetric information, which is easiest to achieve when everyone is ignorant") have been synonymous with legalized wealth transfer (after all, we now know that nobody ever read the fine print, and when the chips fell it was all the rating agencies' fault). Alas we are skeptical. But while we wait, here is a slightly lighter piece from the Globae and Mail's Tim Kiladze, who while not exposing anything new, shares with his readers just what the transition from "soulless banker" to a "less demanding, more fulfilling life" entails, and that it does, in the end, pay off. As Tim says - "The latter is a real option: I’m proof of it." Here is his story for all those 'wannabe Greg Smiths' who are on the fence about burning that bridge in perpetuity.
From the Globe and Mail
Why I gave up my six-figure salary and quit Bay Street
I still vividly remember the call that landed me on Bay Street. It was 2006, and on an overcast October morning, someone from the investment arm of the Royal Bank of Canada offered me my dream job. As I took in the news, I stared out the window of my tiny bachelor apartment that overlooked McGill University’s sprawling campus and couldn’t help but think: I finally made it.
For as long as I can remember, I wanted to work in finance. Though Gordon Gekko wasn’t exactly my idol, I yearned to be rich like him. The funny thing is, once I got what I thought I wanted, including a robust six-figure salary in my early 20s, I wasn’t nearly as enamoured.
As a junior banker or trader, you may not have much responsibility, but you see everything with fresh eyes. What I saw was an industry unbelievably out of touch with reality. The problems weren’t confined to the places I worked, RBC Dominion Securities and National Bank Financial; they were widespread. Retail investors are routinely gouged for ridiculous fees, and the Street is so clubby that rivals gang up on each other when someone tries to undercut the advisory fee schedule.
The Street’s culture was rotten. I once saw an investment banker become enraged when his plane ticket was booked economy instead of business class. “I’m not sitting in the back with the proletariat!” he declared.
I’m not the only person who was disillusioned. Whole books have been written about the recklessness of Wall Street, and Greg Smith’s op-ed in The New York Times is nothing less than an indictment of the culture of Goldman Sachs, his former firm.
While Mr. Smith and I had very different experiences, we made the same decision: to flee finance. I know so many others who wish they could do the same. Yet they never make the move because they are scared to part ways with their large paycheques, or they feel trapped by their big houses and private golf club memberships. When I left, one typically unemotional 30-something trader e-mailed me privately to say: “Good for you for having the balls to do this.”
Here’s the thing: it’s not so hard. Once you leave the office towers, you quickly realize that there is meaningful work beyond Bay Street.
When someone hears that I left banking behind, there is only one question that comes next: How big was the pay cut?
Big, I say. So big that after being hired by The Globe and Mail, I no longer met the $60,000 minimum salary for the Infinite Visa I once used to pay my bar tabs at Bymark and Vertical.
Almost three years later, I still miss the money. I probably always will. I miss not having to fret about my weekly budget. I miss not having to worry that someone at my dinner table will order an expensive bottle of wine, forcing me to opt out and drink by-the-glass alone. Sometimes I even have moments of rage when I hear rumours that someone I know has signed a new contract that guarantees a salary plus bonus of more than $300,000.
Then I remember why I left.
No longer do I arrive at my desk at the crack of dawn to mindlessly enter bond yields into a convoluted spreadsheet. No one tells me that my Banana Republic cardigan is too fashion-forward for the office. No longer does a superior tell me that I leave the desk to pee too many times during the day.
When I left Bay Street, I left something else behind: a sense that I was living in denial. Back then, I had to pretend that I didn’t hear or see certain things. While working on the Street, I heard people say that even if clever institutional investors like pension funds realize that a new deal isn’t worth buying, unsophisticated retail investors won’t know any better. I saw investment banks get paid millions of dollars to offer fairness opinions on proposed takeovers, while rarely raising an objection to any deal. And I saw research analysts getting paid enormous money, even though their predictions are so often wrong.
Having said goodbye to all that, I now get a certain pleasure out of hearing bankers, traders and corporate lawyers grumble about their bonuses, even though the annual cheques are worth hundreds of thousands of dollars. Unlike them, I no longer have to use that number as my main measure of self-worth.
My friends on the Street know I’ve got it good now, too. Last year I watched the Super Bowl with a few of them, and during our post-game chit-chat one turned to me and said matter-of-factly: “You literally put a price on happiness.”
This doesn’t mean that investment banks or corporate law firms are the root of all evil. A number of my best friends still work on Bay Street, and some people I truly respect have been in the game for 30 years.
Most people in shiny office towers mean well. They really do. They love their kids, and they give loads of money to charity. The way they see it, every now and then they do something that is just a little offside, but it can’t be that bad.
What they don’t realize is that when everybody does just a little something wrong, it creates one hell of a mess. Rating agencies who bear some of the blame for the financial crisis relied on mathematical models that assumed widespread defaults weren’t possible. The analysts who trusted those models didn’t mean to nearly crash capitalism as we know it – they just took a shortcut.
In all fairness, no industry is perfect. (Have you ever met a car salesperson willing to offer you their wholesale price?) Journalists, too, deserve some blame for not raising more red flags about the excesses of the financial business, before the crisis reared its ugly head.
The big difference, though, is that bankers and traders make millions, and their poor due diligence can bring down financial markets.
Will Bay Street or Wall Street ever change? Probably not. Michael Lewis wrote Liar’s Poker to demonstrate just how crazy the 1980s were, and he’s since acknowledged that things only got worse.
Financial professionals who are as fed up as Greg Smith have two choices. They can try to stay the course, or they can opt for a less demanding, more fulfilling life. The latter is a real option: I’m proof of it.
A few weeks ago the Globe sent out a new job posting for our finance department, so I re-posted it on Facebook. Someone from Bay Street inquired about it and I initially laughed it off, telling him we could never match his current salary. But he was serious.
“You starting to feel like your soul is dying?” I texted to him.
“Starting?” he replied. “Dead my friend.”