Commonly Accepted Myths About Wall Street and Financial Services

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Rich banker

Working for a big bank or investment firm needn’t be a source of shame. And, while the recent subprime mortgage scandal and banking crisis certainly did lay bare the many problems in the space, most financial services professionals aren’t moving speculative investments. Many of the commonly held beliefs about banking and investment banks don’t apply to most of the people working in the space.

For finance professionals, it helps to get a reality check. Whether you’re getting lured to Wall Street by thoughts of a big fat bonus check or you’re thinking about turning over a new leaf and leaving your investment firm behind because of the negative press, here are a few things to consider before you make a move.

We’re All Filthy Rich

Despite the exorbitant paydays for a limited number of CEOs, top bankers and traders at many of the well-known investment firms and global banks, the vast majority of financial services employees don’t qualify as the “filthy rich.” The universe of banks, for instance, includes everything from the largest global banks to regional players to community banks and savings and loans.

Yes, the pay differences can be startling from one to the other. For the bulk of investment bankers, the average salary and bonus are good to great, but certainly much less than many might think. In a sampling of investment bankers done by WallStreetComps.com, investment bankers from the associate to the managing director level made an average base salary of $160,132 and an average bonus of $207,335 in 2011. The survey noted that the average bonuses for investment bankers at all levels dropped in 2011, as compared to 2010, and were down considerably from the peaks in 2006 and 2007.

We Don’t Care What People Think of Us

Blame Gordon Gecko for the false impression. But most finance pros aren’t quite so callous. Financial services professionals are, generally speaking, much more reflective than many might think.

According to the “2012 Makovsky Wall Street Reputation Study,” those in the industry do understand that the “actions” and “inactions” of those in financial services have contributed to the public’s poor perception of the space. The study also noted that while the capital and liquidity problems, poor financial returns and the impact of the subprime mortgage crisis hurt the industry’s reputation, the move now is for firms and banks to improve management, product and service quality, as well as rebuild reputation.

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