When bankers sacrifice pay for ethics

It’s no secret that disillusionment among bankers is high. Their social status is at an all-time low and, although competition is still fierce, banks are nervous that they are no longer appealing to top graduates. The market for ‘ethical’ alternatives to big financial services institutions is on the up. The Move Your Money UK campaign estimates that in 2012, 2.4 million people in the UK moved their current account away from the ‘Big Five’ – Lloyds, RBS, Barclays, HSBC and Santander. eFinancial Careers talks to bankers who have made the move from working in mainstream banks to do-good institutions.

Charles Middleton is managing director at Triodos UK, a bank that only lends to charities or businesses that do social or environmental good. He joined Barclays as a graduate trainee and worked for the bank for 21 years in various management and director roles in India, Botswana and the Caribbean. He left Barclays to join Triodos in 2003.

“I was increasingly finding Barclays’ values weren’t aligned with my own and I realised that the company wasn’t going to change to suit me. I felt increasingly conflicted, which impacted on my ability to do the job. I was going to have to make changes, but I was in a quandary about how to do it. I had a notion about going to work in the third sector, as I’d done quite a lot of voluntary work in India and Africa and it was some of the most fulfilling work I’ve ever done. My time at Barclays was instrumental in equipping me to do the job I’m doing and I did enjoy much of my time there, but I can remember my first day at Triodos and I felt completely liberated. It was still a bank, but its purpose was so beautifully aligned with what I felt was important in terms of who it was lending to. That’s not to say that it’s always easy. The last few years have been very difficult in banking, no matter what kind of bank you work for. But the if the fundamentals of what that bank is trying to do is aligned with your values then it makes it much easier.”

George Haslem is COO of Ecology Building Society, which specialises in mortgages for environmentally friendly building projects. He started his career at Unilever before moving into financial services. He worked at Abbey National, Scarborough Building Society and Northern Rock before moving to Ecology in 2011.

“I like working for Ecology because it’s small and won’t compromise its values just to make money. Big banks offer high rates with bonuses to attract customers in and then they reduce the rate without communicating it to the customer. One month you’re being asked to grow the sales and the next month your being asked to improve the margin and reduce the sales, depending on the priorities of the business in that particular period. With a small ethical building society like Ecology, we’re clear about what we want to do. If a customer is aligned to what we are trying to achieve, then we’re more than happy to lend the money. We’re treating our customers consistently, which makes interacting with customers much more pleasant. With our type of service you don’t get dissatisfied customers like you do with the bigger banks. In the last ten years Ecology has had 4 complaints go to the ombudsman and each one of those has been upheld in our favour.”

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Aine Kelly is head of marketing at Big Society Capital, a social investment bank launched by the UK government in 2011. She worked in institutional equity markets for 18 years before moving to Barclays Wealth, where she spent four years as a private banker with high net worth and key clients. She moved to Big Society Capital in January this year.

“I moved because I liked idea of taking what I’d done before and using it to build something that added a bit more. The thing about social impact investment is that it still relates to the financial markets, but it also adds its social piece. I’ve never done anything before where social impact is a priority when it comes to investments. This is not profit with purpose - social benefit comes first. I’ve always enjoyed my work and I didn’t come into this being disillusioned with financial markets. I really like financial markets. But it’s good knowing that what I’m building is going to effect the lives of lots of people in a good way, rather than trying to explain where the value added is. I have young children and when they ask ‘what do you do?’, I don’t just say that I work in a bank, I say that I help charities gain access to money. The pay is completely different, but I view myself as an investment that will make both a social and financial return. You have to take the same attitude towards your own reward as an investor has. I work the same sort of hours as I did before. I start the day at 7am and finish at 7pm. People here are as professional and hard working as they were at any of the other organisations I’ve worked at.”

Martin Rich, sales director at Social Finance, an investment bank aimed at the third sector. He spent over 12 years in international investment banking, working on structured debt and derivative products. His last role was in HSBC’s Financing Solutions Group. He started at Social Finance at the end of April 2009.

“I’d reached a cross-roads in my banking career and was beginning to think that I wanted to do something a bit different, but wasn’t sure what that was. Although I was clear that I wanted to do something beneficial for society as a whole. So I spent a lot of time looking at the types of organisations that try to make the world a better place – the Word Bank, the UN, charities and NGOs. I realised that none of those institutions suited my skill set and I kept returning to the fact that I didn’t want to throw away all my years of training and experience. When I stumbled across this world of impact investment, it was a no-brainer. It was about finding the place that I can best help. Bankers painting fences drives me mad. At the end of the day, you have a reasonably painted fence, but you’ve just taken a bunch of people who are not painters and used them in a way that they are not skilled to do some good. Surely what we should do is get painters painting fences and bankers using their skills for greater social benefit and finding ways to use those different sets of skills to their maximum. The financial system grew out of being a socially beneficial offering. The financial world needs to rediscover those roots.”

Steve Miles is credit manager and acting credit controller at Charity Bank, which finances social enterprises, charities and community organisations. He joined a major high street bank after leaving school in 1976 and worked in their branches in East Kent for nearly 30 years, before moving to the Charity Bank in 2005.

“By the time I left the bank I was working at, its culture had changed. It was all very much about sales and raised income at the expense of what was best for the customer. It was just about getting out of them what you could. I was working closely with customers and wanted to do the right thing by them, but felt I couldn’t do that. I just couldn’t see a future anymore, so I started looking elsewhere. I took a 20% pay cut when I moved to Charity Bank, but it just felt so much better that there were no sales targets. We just got on with the job. Our purpose is to help charities and we’re not there to sell them something they don’t want. Any organisation has its tensions, but I’m more relaxed now. I feel I’m better suited to this job. I occasionally talk to people who I used to work with and they say that the sales targets just keep going up and I know it would have got worse if I’d stayed. I'm sure I made the right decision.”