Press release

Less affluent kids are locked out of investment banking jobs

A new report highlights a culture of conformity in investment banking, where even clothes can count against less privileged young people.


Investment banks are failing to hire talented youngsters from less advantaged backgrounds because they recruit from a small pool of elite universities and hire those who fit in with the culture, a new report by the Social Mobility Commission reveals today (1 September 2016).

The report finds that most investments banks still predominantly favour middle- and higher-income candidates who come from 6 or 7 of the country’s top universities.

Researchers from Royal Holloway University of London and the University of Birmingham also find that young people who aspire to senior roles in investment banking are also required to secure work experience - which favours those with informal networks.

The researchers find that managers often select candidates for client-facing jobs who fit the traditional image of an investment banker and display polish; some still place as much importance on an individual’s comportment (speech, accent, dress and behaviour) as on their skills and qualifications.

They note that this can disadvantage candidates whose upbringing and background means they are not aware of ‘opaque’ city dress codes. For example, some senior investment bankers still deem it unacceptable for men to wear brown shoes with a business suit.

The report finds that while some investment banks are making good progress towards improving social mobility in front office roles, current programmes remain small-scale.

The Rt Hon Alan Milburn, Chair of the Social Mobility Commission, said:

Bright working-class kids are being systematically locked out of top jobs in investment banking because they may not attend a small handful of elite universities or understand arcane culture rules.

While there are some banks that are doing excellent work in reducing these barriers, there are still too many that need to wake up and realise that it makes sound business sense to recruit people from all backgrounds.

It is shocking, for example, that some investment bank managers still judge candidates on whether they wear brown shoes with a suit, rather on than their skills and potential.

The report, which examines social mobility barriers in the investment banking and life science professions, concludes that people from more privileged backgrounds are over-represented in both professions.

In the life science sector, it found that employers attract and appoint new graduates from across the breadth of the higher education sector, including internationally. But in a competitive labour market, there can be a tendency towards giving preference to graduates from particularly well-known or prestigious courses or institutions.

The researchers, who carried out in-depth interviews across both sectors, add that life science and investment banking employers do not do enough to monitor the backgrounds of new and existing employees and so lack the data to understand and tackle this issue.

Key findings include:

  • in the UK 82% of children attend a non-selective state school, 14% attend a selective state school, while 7% attend fee-paying schools. In comparison, the Sutton Trust found in 2014 that 34% of new investment bankers had attended a fee-paying school
  • young people who do not attend ‘target’ universities, such as the London School of Economics (LSE), the universities of Oxford and Cambridge, Imperial College London, University College London and the University of Warwick, are less likely to get a front-office role in investment banking, irrespective of prior attainment
  • those who do attend these elite universities may be more likely to self-select out of the application process if they feel they may not fit in or that employers do not welcome diversity on the basis of social background

Key recommendations include:

  • investment banks and life science employers need to do more to tackle social inequality to ensure that they recruit talent from the widest range of backgrounds
  • employers should collect data on the social and educational background of applicants to better understand barriers to access and when they occur in the recruitment process
  • employers should be more flexible about screening on academic credentials gained at secondary school to attract students from wider range of backgrounds
  • vocational learning should be put on an equal footing with academic routes for life sciences - particularly for life sciences by maximising higher and degree apprenticeships

Dr Louise Ashley, from Royal Holloway University of London, who led the research on investment banking, said:

Access to front-office roles in investment banking is extremely competitive for all candidates, but our research suggests students from less privileged backgrounds are less likely to get the top jobs - no matter how talented they are.

Banks are making good progress addressing these issues through outreach and work experience, but more needs to be done to understand the barriers to entry. This needs to be accompanied by changes to the way that candidates are recruited and selected.

Joanne Moore, from ARC Network, who led the research on life sciences, added:

Both the investment banking and life science sectors need to do more to ensure fair and equal access to jobs. This is important, not just for our economy and society, but for individuals.

In life sciences, graduate jobs often focus on a candidate’s practical skill as well as academic criteria - which may be more limited for non-privileged students who are known to face barriers to taking up placements and internships.

Notes for editors

  1. The Social Mobility Commission is an advisory, non-departmental public body established under the Life Chances Act 2010 as modified by the Welfare Reform and Work Act 2016. It has a duty to assess progress in improving social mobility in the United Kingdom and to promote social mobility in England. It currently consists of 4 commissioners and is supported by a small secretariat.
  2. The commission board currently comprises:
    • Alan Milburn (Chair)
    • Baroness Gillian Shephard (Deputy Chair)
    • Paul Gregg, Professor of Economic and Social Policy, University of Bath
    • David Johnston, Chief Executive of the Social Mobility Foundation
  3. The functions of the commission include:
    • monitoring progress on improving social mobility
    • providing published advice to ministers on matters relating to social mobility
    • undertaking social mobility advocacy
  4. Any questions, email:
  5. See a full version of the report.
Published 1 September 2016