Wall Street and the Failure to Prepare Graduates for the Real World

The financial services industry is growing its proportional share of national GDP and has done for decades. The best and brightest flock to Wall St with Goldman Sachs, Morgan Stanley, #hedgefund iconic names that call like sirens to our graduates. Literally, tens of thousands of our best minds work on Wall St inventing new methods of securitization and instruments.

While there are many reasons for our best minds to join Wall St, I believe that universities are failing to prepare students for the real-world and in faling to do so leave them vulnerable to bright shiny objects and paths of least resistance.

 Since 2008, we've come to rue the size and power of Wall St - the leverage, financial instruments, and too-big-to-fail institutions that have been bailed out but not fixed.  Moreover, there is an acute sense of resource misallocation. What are the long-term costs of so many talented young people investing their talents, drive, and innovations in finance?

I graduated from Harvard in 1994. Shortly after graduation, I reported for duty at 1251 Avenue of the Americas, the then-home of Morgan Stanley. Along with scores of my classmates, we descended on Manhattan to begin work as analysts, junior traders, and future financial mavens. Why did so many of us join Wall St?

 I see three key drivers:

1. Path of least resistance
1. Banks run incredibly efficient recruiting processes. With young alums driving the process, the banks make it incredibly easy to interview, visit, and ultimately accept banking offers.
2. Dinners, lunches, senior banker discussions...the recruiting process hoovers up talented young people, mostly unsure of what to do next
2. Money
1. Finance companies pay materially above the mean and provide cash-strapped graduates with ready income and a path to income growth
3. Failure to Educate
1. Lastly, most colleges to a terrible job preparing graduates for the real world. At Harvard, the career counseling center and the College do very little to educate graduates about options, choices, and career paths.
2. Education demands preparing students for life and giving them the intellectual tools and frameworks with which to develop and grow. Little emphasis, however, is formally placed on preparing college graduates for life as working professionals.
3. The liberal arts bias makes such mercenary education an anathema, however, in hindsight the lack of real-work preparation is inexcusable.
4. The completely random nature of how most people choose their first jobs is shocking. Think of the preparation we place on SATs, AP exams, GPAs, majors, and yet we don't work with our kids to lay out, explore, and select vocations with equal verve and discipline.

Recent research suggestions that the human brain does not reach maturity until ~25 years old. College students are early on the development path, often aimless with respect to major and vocation, and leave school book-smart but far from educated with respect to the super-set of career paths and vocations possible. This lack of education and preparation leaves students vulnerable to the siren song of corporate recruiting processes.

As a father of two boys, I talk to them about gap years - allowing them to live, work, and experience the real world, while continuing to reinforce the importance of education.  We are, I am afraid, not providing a balanced approach to education and the imbalanced focus on academics leaves young graduates truly ignorant about life as working professionals and how best to map their interests, passions, and talents to the wide variety of possible career paths our economy offers.

How can we better prepare students for a life of work?  How can we balance liberal arts educations with greater insight into vocational choices and possibilities?