Wall Street is like professional sports. If you're not a superstar by the time you're 40, you may find yourself obsolete.
If you've been in the business since the late eighties, you know what I mean. It's not that there's an age limit at investment banks, but years under the belt and heftier pay mean you had better be producing because many firms are having a harder time justifying pay packages with an eye to shareholder value.
What's worse, if and when 40-somethings lose their jobs, recruiters say they are ever harder to place elsewhere. Their salary expectations are high and there's always the nagging question of why their former firm let them go. One recruiter has a 40-plus client who was fired five months ago, has interviewed at every major firm, every second-tier firm, and all the foreign firms, and he is still out of work.
"The feedback on him is that they want someone who is 'energetic.' But what they mean is, 'He's just straight up too old,'" the recruiter says.
That's not to say it's hopeless. There are jobs out there, but finding work after a redundancy is turning more into beggars who can't be choosers. Some wind up on the buy side. Others end up in the finance departments of medium to large corporations.
"A lot of them are pushed out, but if they're smart enough or resourceful enough, they end up in good places, like the buy side, or they start their own private equity fund, or they go work for a Fortune 500 company, or they work for a family business," one recruiter says.
Those that want to remain in investment banking find themselves at smaller or more regional firms. The moves also can involve a pay cut.
"They move down the food chain to less prestigious regional firms," says Alan Johnson, managing director at Johnson Associates, a compensation consulting firm in New York.
Going Down as Age Goes Up
It can take time for some to adjust to the fact that they've become somewhat downwardly mobile.
"The problem is many do not have the personalities that lend themselves to go somewhere else," Johnson says. "It's humbling. And these people were masters of the universe. They haven't done humble in a long time."
The problem was even worse during the market downturn. If salaries are an indication of demand, investment bankers who earned about $1.5 million in 2000 - including bonus - saw their salaries fall to as low as $550,000 in 2003. The market has stabilized to some extent, and those same bankers earned about $650,000 and could earn as much as $800,000 this year, but this last bounce left many out in the street.
"It's stabilized some, for sure. But probably half the people (in this age range) lost their jobs in 2000," Johnson says. "The coast is clear, but you're not as comfortable as you were. You've seen too many of your friends get carried out."
No firm will admit they discriminate based on age. And when it comes to superstars, they don't. Revenue generators are always in demand, whether they're 25 or 55 -if you can prove you're the one who actually generated it. But sales and trading desks are routinely filled with 20- and 30-somethings.
Consider this. The typical sector group at an investment bank probably has one to five managing directors, who will likely be between the ages of 36 and 45. There are probably ten directors, who will be from 28 to 36 years old. There will be about 50 or 60 vice presidents, who are probably 25 to 32 years old. And then there might be more than 100 analysts, who fall between the ages of 21 and 25. Those young people can't all still be at the investment bank once they reach 40. There were too few spots at the top.
In fact, the dearth of 40-plus employees below senior management is becoming so common, one firm actually has this population in its diversity push.
"It's a business that thrives on youth and innovation, and maybe they think innovation comes from youth," one recruiter says.
But it's the dirty little secret that no one wants to talk about. No one wants to get slapped with an age discrimination suit. One recruiter who recently attended an industry conference said as a panel on diversity was concluding, the moderator asked if there were any questions, and despite a perceptible mumbling in the room, not one member of the audience raised their hand.
"People are terrified to talk about it. They're afraid to talk about age, and race, and gender," the recruiter says. "But it's something people need to talk about, because I'm bombarded with resumes from people over 40, and I don't know what to tell them."
So What Can You Do?
First and foremost, always remain "a producer." Find a way to always tie yourself to the bottom line, one recruiter says.
If you are pushed out, make sure you have a good severance package. It could take a year to find a new job.
When looking, consider smaller firms or boutiques. It helps if you're willing to move outside of New York.
And try to stay in your current job as long as you can while you're looking, says Kenneth Taber, an employment law attorney with Pillsbury Winthrop Shaw Pittman LLP.
"It's always more difficult to find a job when you're out of one," Taber says. "If we can keep them nominally employed while they're looking, that's a huge advantage."
It also helps if you can get your current employer to put in a good word for you. Many are reluctant to say anything more than name, rank and serial number to the new employer, for fear of lawsuits.
"A lot depends on the story of why they're not with their former employer," Taber adds. "If their issue is incompetence, why is a new employer going to want them?"