Here's One Cynical Explanation For Why Wall Street Can Recruit So Many Harvard Grads

Editor’s note: This post appeared on Quora in answer to the question, “Why do Harvard graduates head to Wall Street?” Henry Wong, a Harvard grad who went into investment banking, provided this answer, which he has allowed us to republish.

I think there is something more insidious at work here. Bear with me as I attempt to elaborate.

It is true that banking (and consulting) pays well and is prestigious. At least people are lead to believe it is prestigious, and that is what matters. Few people at the age of 21-22 know exactly what they want to do, and it makes sense to maintain a “generalist” status with investment banking (and consulting). It opens a few doors and delays specialisation (as Nick Huber correctly pointed out). Those are all valid points. I know those were the reasons I got into investment banking. However, after years working on Wall Street, recruiting new talent and observing the education system, I think there is a deeper problem.

Harvard, as well as other “prestigious” colleges, selects for kids who will “succeed” (defined broadly) and look for relevant signals/indicators, such as good grades, leadership traits, “well-rounded,” etc. What inevitably happens is students and parents “work towards” these signals/indicators. So colleges accidentally introduced a new signal/indicator, I call it the “conformist” signal. Students who excel at conforming to social expectations have a much higher chance of getting into Harvard. Don’t get me wrong, many of these students are talented and human beings are social animals! Nonetheless, it is important to acknowledge Harvard does not select for iconoclasts and the unconventional types. My personal observation is Harvard and other well-regarded colleges have a student body bent towards meeting and beating social expectations.

There is an understanding that Wall Street is glamorous and prestigious, where talented people flock to (at least when I was there). Whether this is true or false does not matter. It is the social expectation/understanding that matters, and Wall Street is “catnip” to the conformist! It checks every box. It is another very strong signal/indicator to a conformist. Whether intended or not, Wall Street ends up selecting for conformists.

Note that these are reinforcing cycles and behaviours. Society (schools, jobs, parents, etc.) rewards students that conform to social expectations. As these students join the work force and become part of society, they will naturally select for their kind of people. Harvard and Wall Street simply epitomizes this behaviour.

So my cynical answer to your question is: Harvard (and other culprits) select for conformists who are naturally attracted to Wall Street.

This introduces a few questions:

  • Conformists are by nature crowd pleasers. Does this explain why Wall Street has such herd mentality?
  • Does a school really want to select for a “conformist” trait? If yes, then I am sad, although I understand it from a social stability standpoint.
  • If not, then is there a way to isolate the conformist signal? and select for it in a more deliberate manner?
  • I agree Wall Street has absorbed more than its fair share of young talent. Is there a better way for society to allocate/lead its talent?
  • Is this a natural outcome of a stable society? It selects for people who enforces social stability, and occasionally introduces a few crazy/unconventional genes to move social progress along.

Click here to read the rest of Wong’s answer as well as other answers to the question about Harvard graduates and Wall Street.

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