Bad advice, degrees and a career in banking

My reader Delia Toh has drawn my attention to this piece on Facebook. I shan't cut & paste the whole article as it is too long, but it boils down to some really bad advice that a young Singaporean student has been given. I bemoan the situation whereby teachers and others involved in education are so far removed from the working world that they end up giving really bad career advice. Trust me, my parents are teachers and I had to politely ignore their advice most of my life. It's not that my parents were deliberately trying to sabotage my career by deliberately giving me bad advice - far from it, there's no malice involved whatsoever; it's just that after working in a primary school environment for a good part of four decades, they have absolutely no idea goes on in another sector, such as financial services. Yet in Singapore, students have this culture whereby they naturally turn to their teachers and other figures of authority in their schools for career advice - if you want career advice about a job in say, the financial services sector, you speak to someone who has worked in banking for a few decades, not a teacher who has never worked a day in his/her life before in this industry. You can read Charlotte Yong's full post here but the line that made me groan in agony was this:

Is Charlotte genuinely barking up the wrong tree?

My interviewer said, "If you want to work in a bank, you should be applying for courses like Banking and Finance instead." Alamak. Aiyoh. WTF. Like seriously. And this poor student actually believed what the goondu interviewer said. That is why I feel such a desperate sense of frustration with Singaporean youths - they are still so trusting when it comes to adults in positions of authority, this young student Charlotte Yong didn't question whether or not this interviewer knew what s/he was talking about. Allow me to deal with the issue since Delia has kindly invited me to do so (thanks Delia) as I feel that this is something I wish someone had spoken to me about when I was Charlotte's age.

Firstly, Charlotte's ambition was to one day become the CFO of a bank, in about 20 years. She is actually pretty realistic in terms of that time frame, because you need to start at the bottom - at an entry level position, gain experience and slowly work your way to the top in a big organisation like a bank. In fact, 20 years might be rather ambitious - this list is slightly out of date as it is from 2008, but conveniently, it lists the ages of all the directors of HSBC in Europe and the ages of the directors range from 40 to 68. The vast majority of the directors are in their late 40s to late 50s - so to be realistic, it may take Charlotte up to 30 years to achieve her goal of becoming the CFO of a bank; especially if her parents are not already senior figures in the banking industry, able to open doors for her and help her career with a big dose of nepotism. And unfortunately, it doesn't sound like that is the case for young Charlotte.

Charlotte wants a career in banking.

And no, you don't need a degree in banking and finance to get an entry level job in a bank. Here's how it works - the big banks will have a graduate recruitment programme every year, to milk up the best graduates entering the working world each year. Anyone can apply in principle, but in reality, practically all of these places in the graduate recruitment programme will go to students from top universities. I am going to be talking about the UK as that's where the vast majority of my work experience in banking is based and I have worked as a gatekeeper in this industry before. Say the gatekeeper receives two applicants: one did an engineering degree at Oxford whilst the other did a degree in banking and finance from Sunderland - which applicant do you think the gatekeeper is more keen to interview? Here's a hint: Oxford is usually ranked 1 or 2 (swapping places with Cambridge - we often just accept them as equally good, in joint first place) on the university league tables, whilst Sunderland's ranking in 2016 is 116th (out of 127 universities). The Oxford graduate would almost certainly be offered a job whilst the Sunderland graduate would probably not even get past the first round of the selection process. In short, it's all about league tables: the quality of your university matters far more than your degree. Make sure you do your research before committing to a degree!

I can't stress this enough - when you start your first job, let me give you a dose of reality with a slice of humble pie. You start at the bottom, you are a small cog in a big machine: you will be taught what to do in your role. There will be a manager telling exactly what is expected of you, you will be given training and plenty of support as you adjust to your new role - this is standard practice in any big company. Nobody expects you to hit the ground running and certainly, whatever you have learnt in university is going to be so general that hardly any of it will be useful or relevant to your new role. The fact is your university simply cannot predict what your future job is or whom your future employer may be, so they cannot possibly adequately train you for the job. All your degree does is to prove that you're smart enough to gain entry to a university at the top of the league tables and can pass some difficult exam: on that basis, the banks will want to hire you because they believe you're smart enough to learn how to do the work they want you to do.

Which degree does Charlotte need then?

Be careful whose advice you take. I'm extremely skeptical about people who teach banking and finance in universities - like if they were such experts on the topic, why didn't they go get a lucrative job at some big bank and make loads of money then? Why are they stuck at some third-rate university teaching a course to students who had mediocre or below average A-level results? It is a classic case of the blind leading the blind: these lecturers don't have a clue what the hell goes on in the real world of banking and these students don't really have much hope of landing a good job in a big bank anyway. Yet so many of these students blindly put their faith in their lecturers because they want to believe that their degree will count for something in the real world - boy, they're in for a really rude shock when they do eventually graduate and meet gatekeepers like myself. I don't care what the students did at university - all I need to know is that they're intelligent, that's all. We'll give you the training you need to do the job we want you to do.

A good university will have a careers office where they will arrange the chance for you to talk to professionals who have been working for over ten years and they will then be in a good position to tell you what gatekeepers are looking for. These are the kind of people who are able to guide you to your first job - at my university, the teaching staff regularly encouraged us to use the services of the careers office so we could prepare ourselves for the working world and make this transition from being a student to being a member of the workforce. Now in Charlotte's case, clearly the woman who tried giving her advice wasn't qualified to give such advice in the first place - I don't think she was deliberately trying to sabotage Charlotte. Rather, she simply didn't understand how the banking sector worked because she works in a university, not a bank. Big difference. Please learn to shrug off bad advice when you hear it.

Be careful whose advice you take.

Given that it will take you 20-30 years to reach the rank of a CFO in a big bank, the banking industry would evolved beyond recognition by 2036 or 2046. I think back about what banking was like 30 years ago, in 1986. I have memories of those POSB pass books and never mind online banking or telephone banking, ATMs were still very much a novelty then. Hardly anyone paid for anything with cards, if you wanted to make a buy a car, you wrote a cheque. If you wanted to do any kind of banking transaction, you went down to your local branch in person and spoke to a person behind the counter. I still remember queuing up with my parents, looking at the very bored security guard in the corner of the room who was about to fall asleep on his feet. I was waiting for him to fall asleep so he would fall over and we would all have a laugh - but that never happened. Yeah that was banking for you in 1986 - so anything you could have learnt about banking in 1986 would be utterly useless to a CFO today for it would be so woefully out of date. The technology we used for banking in 1986 belongs in a museum today, where those of us old enough to remember the 1980s can laugh at what we used to use in those days.

We cannot predict what technology the banking technology will use in 2046 or 2056 - all we know is that it hasn't been invented yet and thus the universities cannot teach you about something that doesn't yet exist. The technology we use today in 2016 would be totally obsolete in 20-30 years. The concept of internet banking was totally alien back in 1986 and even though we started using the internet in 1996, hardly any transactions were done online. Now you may say, I want a career in banking, not IT - surely the fundamentals of banking are the same even if technology has progressed? The answer is no - the advancement of technology has revolutionized the whole banking industry and those who cannot keep up with the changes have either retired or changed industries. Besides, this change isn't solely based on technology per se - it is also based on innovation within the banking industry. Back in the 1990s, there was only a limited number of investment products available to investors and you had to go through a broker/IFA - nowadays, the range of products available is bewildering and you can trade anything from ETFs to derivatives or indulge in a spot of spread betting all from your laptop or phone. Just imagine what we can do in ten or twenty years.

What technology will you be using in 2046?

The banking industry has changed so much because of the new investment products being developed all the time, the way business is conducted has changed so much with the help of new technology and the expectations of the customers have changed a lot. Back in the 1980s, most Singaporeans were more than happy just to be able to use an ATM to withdraw cash - but now, they perform a whole range of complex financial transactions on their smart phones. The CFOs of today who are in their 50s went to university over 30 years ago, in the mid 1980s when none of this technology was available - even if they could actually remember what they studied 30 years ago, none of what they did learn back then would be applicable to the banking industry of today. Instead, they rely on their far more recent work experience as well as a team of experts to help them perform their role as CFO. That's right - did you think that a CFO would micromanage every aspect of the bank? Clearly not, an important aspect of that role would be to delegate responsibilities to the right people with the right expertise and manage them properly.

Now what should young Charlotte do then? I am not sure what to suggest as she has already completed a diploma in accountancy at a local polytechnic and was planning on moving onto SIT. I would have thought that this was already a big mistake and I'm not sure how to undo the damage. If she had wanted to become a CFO (rather than an accountant), then I would have suggested that she should have done her A levels (instead of a diploma) with the aim of applying for a top university like Harvard, Oxford, Cambridge, Yale or LSE. Given that SIT is a rather new university, it would have a rather low global ranking compared to a more established university like NUS. So really, even if she did go on to get a degree in accountancy in SIT like she had hoped to do, it wasn't really going to bring her any closer to the kind of job in banking that she had hoped for. It may have led to a job in accountancy eventually - but if she didn't want to be an accountant, then I wonder why she chose to study it in the first place? That is rather confusing.

Get a crap degree and risk being unemployed.

Allow me to move on to something Charlotte wrote: Being told indirectly that I shouldn't be applying for a degree in Accountancy, if my ambition is to be a CFO, is like telling a child that he/she shouldn't be a pilot if he/she has myopia. We are in the 21st Century, anything is possible.

Allow me to use a poker analogy: it is possible to win with a bad hand, but it is a lot easier to win with a good hand. What does that mean? When you play poker, you have no control over what cards you are dealt - sometimes you get good cards, sometimes you get bad ones. Trying to win with a bad hand is like trying to get a job in banking with the wrong degree from a university at the wrong end of the league table. Whilst it is not statistically impossible to do so, you can't deny the fact that the odds are very much stacked against you. But when you are dealt a good hand in poker, then it is a lot easier to win because the odds are the stacked in your favour: that's like arming yourself with a first class degree from Oxford. Such a graduate from Oxford can pretty much apply for any entry-level job at any bank and get it because every company will want to employ someone who has proven himself to be that intelligent.

How good are the cards you hold in this game?

So do you want a good hand or a bad hand when you play poker? Obviously we want a good hand - likewise, when we enter the working world, we want a degree that will impress employers and gatekeepers. We don't want to be begging them to give us a chance to prove ourselves. Play your cards right and they will be the ones making you lucrative offers. Do you know that in the UK, big banks are offering first year (that's right, first year - not final year) students at Oxford and Cambridge jobs. They don't even need to wait for these students to graduate - the banks are that keen to hire these high calibre students. "Promise you'll work for us when you graduate, we'll support you as students as you finish your degree and there'll be a job waiting for you at our bank the day you graduate - just sign on the dotted line here." Yeah, that's what having a good hand is all about - you'll have banks begging you to work for them. Cos right now Charlotte, you have a bad hand - the odds are not in your favour at all and SIT isn't going to help your situation.

Let's not beat around the bush here - I don't want to sound discouraging but Charlotte's groundless optimism in claiming "we are in the 21st century, anything is possible" - well, that's bullshit Charlotte. And on young Charlotte's Facebook page, her young friends who have probably never worked a day in their life (never mind have any experience with recruitment in the financial services sector) are saying nice, encouraging things to her to make Charlotte feel better. Sorry to be the wet blanket here, but uncle Limpeh is much older and has seen a lot more of the working world - I prefer to be pragmatic and ground myself in reality. Charlotte, if you are genuinely sincere about becoming a CFO, then you need to enhance your chances of making your dream come true by making strategic choices about what degree you pursue and at which university. So many factors can affect your chances when you enter the working world - do you want to start your working life with the odds in your favour or with the odds stacked against you? Because the way things are going now, you're making some really bad decisions which will lead to the odds being stacked against you and your blind optimism, your "anything is possible" attitude is harming you rather than helping you because it is preventing you from being pragmatic. Pragmatism trumps optimism in the real world.

Charlotte is young. I don't blame her for having made some poor choices along the way - I am frustrated when I see her situation: this poor young person has either been given bad advice or no advice as she pursues her further education. In desperation, she turns to her equally clueless peers for help and they offer her blind optimism - not based on any evaluation of Charlotte's situation, but no more than a desire to make Charlotte feel better about herself. Oh dear. It's the blind leading the blind and whilst I may be able to step in and help this one person by offering her some practical advice - I do wonder how many young Singaporeans out there are just like Charlotte and are totally clueless when it comes to making such important choices in life? I don't have a magic wand to wave to help Charlotte improve her situation, but I do hope she will become a lot more pragmatic in her approach to this issue.

So that's it from me on this issue - what do you make of Charlotte's attitude and her situation? What advice would you give her? As always, please leave a comment below and do let me know what you think. Many thanks for reading.