I don't see why a 4 year degree is necessary
I've been thinking about this over the past few days as I reflect on the jobs I've had in the industry. I'm having a hard time understanding why a candidate who didn't have the financial resources to go to college or had to go to work straight out of hs, but has good leadership on the job and e.c.s wouldn't be able to do many of the finance jobs that we do with a bit of training (and most banks have formal training programs anyways). A few of my courses have helped but nothing to the extent of a full-time 4 year program. Needless to say, I don't understand why the 4 year degree requirement is actually necessary.
What are your thoughts on this?
Edit: To clear things up I have a 4 year college degree. This isn't about myself - I'm just wondering why this is a hard requirement.
You won't get into any IB, HF, or PE (any reputable one, at least), without a college degree
I have a college degree but I don't understand why it is a hard requirement.
BC u actually need critical thinking skills. Not saying college will give you that, but finance doesn't require any physical skills, just human capital
How about a two year degree?
To break in anywhere reputable and be able to eventually succeed in raising capital on your own in 99% of cases, yes. More often than not, someone with a degree is more qualified than one without one unless they've got prior experience to bring to the table already. Finance is a small world that a lot of "qualified" people want to get into, so most firms that have a structured recruitment process will be working to narrow the pool as much as possible. One of the easiest pre-recs to keep the list small is a college degree.
This isn't to say it couldn't drastically change in the next 10-15 years. College is becoming less and less valuable, and if they actually make it free for all I think it'll become even worse. Most universities have shifted from being neutral centers for challenging ideas and teaching facts into basically being an echo chamber resort run off of tuition money where you also go to learn things. Get the government out of guaranteeing loans so they can't be discharged in bankruptcy and lets see how many go under.
But see even in your response you're admitting that there are exceptions which is the point I make in the OP as well. However, at least for the shops mentioned on this site there are no exceptions - the 4 year degree is necessary even for your app to be looked at which is what I don't get.
Why are you focusing on there being exceptions? This is the same line of thinking as liberals who point at people who are intersex and using that as a justification in an argument for there being more than 1 gender. A abnormality, an oddity, something that is statistically insignificant or rare within a population (such as the # of people getting into PE/HF/IB/AM/VC who don't have a college degree) is never considered by the rule, because it is the exception.
All odds point to you not being exceptional (from a statistical standpoint you as one applicant, I'm not saying this as an attack). Exceptions will usually have things like their own network, personal relationships to people involved with the firm (investors, family friends, related to someone senior), or something else that makes up for them not having a degree. Or maybe there's that one story of a kid who just interviewed so well and had such a passion, it didn't matter to hiring manager who knows they're picking someone to support the management of potentially billions of dollars.
Do you still have trouble understanding why any institution of quality would want to go with the most successful signaling tool for competence and drive to learn/succeed of the last 100+ years?
It's the exception because the industry is structured that way. The point of the OP is asking why it is structured that way (and ultimately stating my opinion that it shouldn't be).
Also since banks are already pushing for diverse candidates, my proposal seems like a better solution than the systems we currently have in place as it actually selects people who come from difficult/non traditional programs who got their act together as opposed to some arbitrary criteria like skin color or gender.
No, the industry is structured this way because of the fact that overwhelmingly, people with degrees are going to be smarter and more likely to have relevant experience (internships). It is not that they just dislike people without degrees, it is that people with degrees are by and large more competent than those without. College is a choice people make to pursue further education to add to their skill sets beyond what they would have received in high school both in a classroom and relevant internships, co-ops, etc. The average applicant will be older (if you open up applicants to people without degrees you can get 18 year olds applying) in which case also more mature, and when people are just finishing school is the easiest time for most to pick up and relocate to somewhere new.
Or we could just try fixing this idiotic diversity push in the first place? Even with their idiotic new selection criteria considerations and all the other added BS that's in the system now, the above argument by and large remains the same. People with a degree more often than not the more qualified, better person for these types of jobs.
You're either overthinking this or just thinking about it wrong. If you're seriously bewildered by this question I take it you don't actually work in industry?
Because you're managing money and processes in the range of millions to billions of dollars. You really think clients would give you, a random person, the money over a Harvard graduate? The degree gives you credibility, which brings business for the bank/fund.
The actual number of people calling the shots and managing those processes is relatively small. If you're arguing that a kid who isn't a college grad will have difficulty reaching IB MD I hear you, but that's true for most people entering the field as well. There are still all the lower ranks (analyst/associate/etc.) positions which your response hasn't accounted for.
Interesting question. I think it helps filter the candidate pool, such that the interview yield for firms increases. Same reason there's a list of "target" schools - it's driven by a desire to minimize the resources of the firm while finding new talent. You could scour the country for community college students able to do IBD, or you could got to a select group of schools to get more or less the same results.
Yes but if someone was to network in like a non-target that wouldn't really cost the bank extra resources. I'm not saying non colllege grads should be treated like college kids, I'm just saying the hard requirement to not even get an interview doesn't make sense given the many finance roles aren't exactly rocket science.
On a one-off basis, it doesn't add much time, but on aggregate it does. In 2015, Goldman received >313K applications for 9.7K summer internship roles (~3% fill rate). if they granted every candidate a 1hr interview, they'd have to spend 36 years' of time on just the first round. As you said, most of these jobs aren't rocket science - spending a massive amount of time on this endeavor doesn't make sense IMO. The interview criteria is meant to save firm resources, not to select the absolute best candidate for the role.
It's not necessary but this industry is very conservative and focused on prestige and brand names. This industry is also focused on filtering people out rather than taking chances on people.
Filtering someone out because they didn't go to college is just the lowest hanging fruit for not considering someone for a job.
You could have built a company up from nothing and sold it for $5-10 million at 18-22 but BB's/HF's/PE/CO firms are going to take the kid from Targets/Semi Targets that are box checkers over you every single time because there's no perceived risk. Nobody ever got fired or scrutinized over hiring a kid from Duke, U of Chicago, Northwestern, or Wharton that didn't pan out. If you hired a non-traditional candidate that doesn't work out then you're opening yourself up for risks that just aren't worth it.
The university you go to and how you perform in said university acts as a barometer for work ethic. This signal gives you an idea who is going to eat shit and arrange logos at 2am for two years vs. someone who is going to quit within the first few months.
Yes but can't work ethic be seen through someone who worked 4 years full time and maybe took a few finance classes on the side at night or created a business and then sold it? I agree that college is a reasonable criteria and shouldn't be tossed out but I don't get how there aren't other ways to measure this.
No offense, but what use is there in reinventing the wheel?
The supply of applicants for prestigious jobs far outweighs the demand, thus the companies get to choose on arbitrary metrics to thin out the pile. It's just not economical for these firms to fully map out the skills, background, and capabilities of each and every applicant, when, like you said, they retrain these kids anyway so might as well pick the ones with the best backgrounds who are likely to continue performing well. Same reason why many firms set an arbitrary minimum GPA to apply.
Good employees are generally smart and disciplined. Admission to a good college shows that you're smart enough to get good high school grades and standardized test scores. Graduation from that college shows that you're reasonably disciplined. This is the Signaling Model of Education. The better the school and the more difficult the major, the stronger the signal that you'll make a good employee.
In this model, it doesn't matter if you spend your time in college studying something totally irrelevant and then forget everything you learned immediately. What matters is that you got in and that you graduated. You could spend four years at Yale studying ancient Greek and then go on to a successful career at a hedge fund. Ancient Greek verbs have nothing to do with financial derivatives, but the type of person who can graduate from Yale with a Classics degree will probably pick up the finance stuff pretty quickly on the job.
To your point, four years of college is a really slow and expensive signaling mechanism. The main reason there isn't an alternative is probably the federal subsidy of student loans. Since every kid can borrow the full price of attendence for any school that accepts him, employers assume that anyone who's accepted to a good school goes to one, and therefore that someone who didn't go is inferior in some way. Either the kid wasn't smart enough to get in or is incapable of working hard.
College is to prove that you can follow instructions. Nothing more nothing less. The better you are at following the instructions the higher the GPA.
That's why employers look at it.
you've broken the bubble - anyone with a 1500 SAT could do an IB job. they filter on colleges for the signalling. this is why getting through 3/4 years of college is not worth 75% as much as finishing the degree.
however, because they have so many more candidates than spots, they allocate according to prestige.
you can see this bc in programming, where there are more seats than candidates, they will take people who prove they can code, with or without degrees.
Aliquam necessitatibus minima similique ut quod omnis eos. Nesciunt vel dolor numquam et magni sed nam.
Cupiditate modi numquam numquam hic ducimus modi. Reprehenderit nihil harum est provident debitis nostrum a. Eos voluptas eius harum eum tempore vitae. Tempora quisquam quidem quo sit sunt quam minima. Nihil sint quo consectetur aut.
Tenetur sunt officia omnis quo doloribus velit ut. Vel assumenda sed accusamus qui cumque sit omnis. Tempora et quaerat iste suscipit. Et animi est illo. Et saepe possimus incidunt ad aut consequatur.
Consequatur soluta doloribus et aut. Repudiandae laboriosam cupiditate est eaque sunt quia sunt. Est nisi alias nisi est aspernatur. Est maxime dolor optio saepe magni qui officia.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
In minima voluptates eveniet enim a ut soluta. Praesentium aliquid nihil nostrum. Velit beatae vel totam non voluptates rem unde. Iste voluptas excepturi veniam adipisci ipsum magni sunt. Occaecati illum eum porro adipisci nobis rerum. Possimus nam sit ut laudantium. Eos rerum dolor consequatur asperiores aspernatur mollitia voluptatibus.
Laboriosam vero nihil sequi ducimus eum neque. Voluptatibus qui aut consequuntur placeat.