Why do so many extremely rich kids end up in banking?

1) Training

2) Network

3) Clout / Keeping up with the Joneses

4) Money (people generally like to earn their own money as it gives them a feeling of self-worth)

5) Probably have career goals that can be accelerated by a stint in banking

I think this is an interesting question - went to a semi-boarding school in Switzerland and had an international education and career afterwards. Met a few wealthy kids, a few high net worth families and, rarely, also UHNW.

1) Why work at all?
When I saw what their parents owned, operated or made all-in, I couldn't help but wonder why anyone in their family would have to work in any capacity. I was told they are doing this to teach their offspring the value of money, curate a work ethic, and build character. They don't really need the network aspect of it, most of the families already have that. But learning how to deal with your management, clients, staff and peers.. those are valuable social skills your parents wouldn't be able to teach you.

2) Why banking?
From what I have seen, it is because of the social aspects of it, or because financial knowledge is seen as advantageous for the family/the kid.
Even if your parents are wealthy, you'd still want to be proud of your job, title or employer.
If you are planning on taking over the family business one day, a few good years in banking are very helpful to understand the details.
Also, wealthy families are the ones who have an easier time getting their kids into the better schools and are more likely to have internal referrals within banking.

Prestige 

Interesting. Know of a family worth 9 figures or so (father created an extremely lucrative tech company - not software/"futuristic tech", think hardware).

Both sons went into finance. One works at the company and the other works in a corp dev role at one of the big FIG institutions.

I always assumed the one at the FIG role had some influence from his father's reputation. His father was a paid tech industry advisor for a billionaire's HF (a name we'll all know on these boards).

Father also runs the company very lean and underpays his employees severely. I'd imagine he wants his children to have a heavy financial understanding and ability to financial engineer costs once they take over.

Prestige. They'd also want MBB prestige but they're not intellectually curious enough to break into MBB. So they find BB banks as their brand-name name tag for them.

Nepotism

I can shed light on this as a rich kid in banking. Let me break it down:

• Rich parents likely became rich because they worked hard. As a result, they pass on the virtue of working hard to their kids. The goal for most people that are poor isn’t to become rich and have lazy kids. It’s usually to allow them opportunities they didn’t have.
• It depends how wealthy you are. But, if you are top 1% that’s still not enough for a person’s kids to do nothing their entire life. At some point, that kid needs to build a career even if their parents are well off. Most kids don’t want to build a life less successful than their parents. So, if you grew up in a big house, you likely also will want to be able to afford a big house for your kids in the future. Also, If the person is greater than 1% wealthy i.e. tens or hundreds of millions in net worth, you likely could create a job for your kid, but would you really want your kid to never know the experience of working for someone else? Probably not. Also, having your dad/ mom be your boss could likely hurt your relationship, so some people just wouldn’t want to do it.
• If you are a relatively smart, hardworking kid interested in business, where else would you go to start your career? I would argue IB, consulting, or a buy-side analyst program are about your best options for jobs that allow you to be credentialed and gain experience at a very rapid pace. For me personally, I did banking because I wanted to learn what the process of buying and selling companies was like as well as what makes businesses valuable. In the future, I might even buy a company with my family. A family office doesn’t have the scale to show me as many large transactions as I saw in banking. 

The bizarre thing to me has always been as a wealthier kid who is supposed to be weak, I would have done the job for free due to the experience the job provides. People salivate in the bonus and complain about the job, but it really does provide some pretty stellar corporate training—even if it’s painful that first year.

Ignorance of high-powered white collar America, or lack thereof amongst the upper middle class+. It's a lot easier for a high school kid born and raised in a wealthy part of NJ/NY/CT to envision themselves working on Wall St if most of their friends' parents are doing it, than it is if that same kid was born in bumf*ck Alabama where the only "wealthy" people in his town are local doctors/dentists/small business owners.

I don't believe that wealthy people as a whole go seek banking, but rather, that most people who are able to get the few banking jobs out there happen to be wealthy. Being wealthy gives you a huge influence/information advantage, two things that are basically the only ways you can truly differentiate yourself between the dozens thousands of banking applicants with good SAT scores and strong work ethic that apply for the 1,000 banking spots every year.

Because banking is the best job on earth. Period. Uh oh, I sense an onslaught of monkey shit. 

Another rich kid in banking checking in-

Firstly, I think the general consensus that rich kids want to just bum around on dads credit card is generally a myth. Having your own income is so much more rewarding.

Growing up rich also sets the bar pretty high. I could probably never work a day in my life if I lived a modest middle class lifestyle and my parents floated me, but I couldn’t achieve the same standard of living I grew up with unless I had my own income. I’d rather work hard and be able to provide that same lifestyle to my future family vs living modestly off my parents. My parents aren’t billionaires, so maybe the calculus changes if there is unlimited money, but it’s important to that if someone has 100 million net worth and four kids, each kids inheritance is a much smaller piece of the pie.

Lastly, even if my goal was to live off my family wealth, it would help to have some sort of financial knowledge. My friends who are billionaires all are working in finance out of school with the intention of running a family office /investing their own money down the road. You’re obviously more qualified to do this having put in a few years in IB/PE etc vs if you just started trying to do this out of school.

Your family is surrounded by other rich families. Did you grew up in NYC? How one becomes rich in NYC? Real Estate, IB, etc. You follow those paths because that's what you grow up seeing others around you do, what other parents in other families did, so as you have a general sense of belonging to a certain type of class in this geographical zone, you will do what your peers are doing because you will get support along the way, you are familiar with the path, you grew up with a mindset which adjusts better to such a career.

The scene would be totally different in California. Rich families over there got rich from tech, Hollywood, etc. therefore their children would be surrounded by other entrepreneurs or such persons and will follow such a path as it is one where they feel some sense of security because they saw that it leads to results, they have support if needed, they understand what to do and how to do it, etc.

It’s actually a pretty solid place to start a career in terms of the breadth and pace of learning (other best one is probably MBB).
 

Also thinking about my own personal views…if I had a fortune of any type, I wouldn’t give it to my kids free and clear without making them prove themselves first. Banking does that while smoothly paving the way for bigger and better things.

Know some "crazy rich" Asian families and a lot of their children also start out a career in banking or MBB. Often times these kids want to take over their parents' companies some day and IB, MBB are considered good training grounds to build their foundation in doing business. Also, it is often easy for these kids to break in to MBB and IB at least in Asia from what I have seen. Their parents are major clients so banks and consulting firms would happily take their children for their business, provide them good training for 2-3 years at which point most of them leave for an M7 MBA and then jump to their parents' company to join as a senior manager/executive.

Bro coming from a lower middle class background and grinding for years to break in and keep working in this industry has been legitimately discouraging at times. It seems like almost everyone, not only in IB, but in Manhattan who is relatively young, comes from a wealthy background. Kids getting monthly allowances from their parents and not even paying rent, kids going to their beach houses on the weekends and going to Europe/Hawaii/Caribbean for the holidays, nepotism hiring, etc, etc. The cycle just perpetuates - when people my age have kids, they will probably steer them in the direction of whatever is hot/lucrative at the time too. To me, it's super frustrating that for every rich kid who's dad helped them get into banking, there are probably 30 non-targets who would cut off their left nut just for an interview. It's a tough world out there boys, try to be empathetic to the people who just want a shot at changing their life/circumstances

You’re thinking is probably why your parents and previous family members were poor. It’s loser thinking.

Because my parents are successful I should be a lazy loser? Or I should try to make my own money?

What a depressing post lol.