Why your family want you to work in banking

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Banker in the family

Hoping they go into finance

As the cost of living rises, there is only thing better than having a banking income yourself, and that's having a congenial relative who works in the industry. Bankers have been bankrolling friends and family for years. Anecdotally, it's becoming more common and - as house prices rise - the sums involved are becoming larger.

"It's not something that's talked about much, but I've helped a few people in my family," says one analyst at a fund management firm. "I've tended to give them lump sums to help them through difficult times. I'm not a super-high flier, but I earn a lot more than they do."

The sums on offer can be considerable. One managing director at an international bank in London lent his brother £200k as a deposit towards a larger family house, on the understanding that he'd be entitled to a proportion of the profit when the house is sold. Others have been known to fund university friends' start-ups and to help friends in trouble.

An MD who left Morgan Stanley said this generosity belies the public impression of bankers as only out for themselves: “We care about our communities of friends and families and we often end up being the provider of resources. I know a lot of people in finance who are paying several mortgages to help brothers and sisters who aren’t on the same path of making money.”

The problem is that although banking pays a lot less than it used to, it pays a lot more than any other industry - top technology firms excepted. After 10-15 years in the London media industry, the average salary is £97k. After a similar amount of time in the banking industry, the average salary is...£240k.

In London, the average deposit for a house is £60k, meaning that a cash injection from a banker relative can be the only way onto the housing ladder.

However, the sharing phenomenon isn't limited to the City. On a recent forum on Wall Street Oasis, one analyst recalled coming across a colleague who, 'had all the extra bagels and mini packs of jelly and cream cheese condiments wrapped up individually in paper towels from the bathroom and was tucking them into his banker duffel.'

Inquiries revealed that the analyst in question had, 'six younger siblings and cousins living with him during his internship because his aunt had passed away two months earlier and was the only adult relative in the States. He was remitting half his take-home pay to his parents, living in an outer borough to save on rent and have space to house his family, and still making it at work.'

With banking jobs increasingly going to elite students from wealthy families, the number of bankers bankrolling their relatives is likely to decline. "Most of the people here come from quite privileged backgrounds, so it's not an issue for them," says the fund analyst.

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