Macroeconomic & Geopolitical

Congratulations, Graduates! Wall Street Needs You!

June 2021 – 3 min read
And yes, you can build a purposeful life around a career in financial services, especially now that revolution is at hand.

“Wear sunscreen!” may be the most useful graduation advice ever offered. Widely attributed to author Kurt Vonnegut, it began a mock commencement address by a Chicago Tribune columnist. In this season of virtual or hybrid or slightly attenuated baccalaureate events, I am emboldened to offer a few suggestions of my own.

To be clear, I have not yet been invited to give a real commencement address, but with a fresh graduate of my own at home this week I abound with great advice, actionable suggestions, and important moral guidance.  (Just ask my daughter.)

My main message to new graduates is simple: Head for Wall Street!

This, on the live stage of many campuses, is when the booing begins. Or the walkout. Or, more likely, the seats will already be half-empty from a planned boycott of a panegyric to a financial services industry that has become synonymous with greed, selfishness, and undeserved wealth.

Class of 2021, as your families sit here today popping with pride, I would be the last to distract from your impressive achievements. But we in finance talk too little about what we do for a living. We may not do enough to acknowledge the harm we have done, but we also shy away from explaining how we find real purpose in what we do. 

I would normally await another day to wade into these controversies, but we need your talents now. And if I don’t make my pitch quickly, you will all choose careers that will help cure cancer, explore space, or teach children. These are undeniably worthy pursuits, but so, I will argue, is helping shape the flows of global finance.

So, first, let me address the harm for which the financial services industry should be held responsible. Topping the list must be a long string of financial crises that tended to enrich a few on the way up and impoverish a great many more on the way down. There is also the devilish complexity of mutual funds, mortgages, and credit cards that often seem designed to confuse in order to justify higher fees. And then, of course, there is the laser-focus on profit that often tramples social preferences and just plain decency.

And yet these are flaws that better regulation—and better recruits—can address. Meanwhile, consider these ways that finance makes the world a better place.

  1. Catastrophe Protection. Without savings, investment, and insurance, most of our lives would hang on the whims of the gods, one step away from ruin should the fates take a turn.
  2. Time Travel. Finance effectively reaches into the future to collect yet-to-be-earned income that can be spent on today’s car or home. When retirement comes, finance reaches back in time to collect past wages that were channeled into savings.
  3. Common Wealth. Armies, medical research, and the neighborhood park would all be impossible without the ability to pool and invest a community’s resources in ways no individual could undertake.
  4. Human Progress. Finance makes possible new ideas, products, and endeavors that mark incremental steps in the human experience.  These include the steam engine, the Panama Canal, and the Internet, but also the corner pizza store and basement crafts business.
  5. Impending Revolution. Social pressures and technological innovation have put the industry on the cusp of epochal change.

The last point sounds a little breathless, but consider the investors now managing more than $100 trillion who are now committed to strategies that include environmental, social and governance (ESG) dimensions. This is an industry that requires more than just greedy number crunchers. It needs analytical minds that are conscientious in putting money to work in ways that protect privacy, promote inclusion, and halt climate change.

The simultaneous revolution in digital currencies, artificial intelligence, and blockchain technology mean current models for banking, investment, and insurance are about to explode. Credit analysis, contract negotiation, and client engagement will look completely different in a decade. These are exciting challenges for anyone with an entrepreneurial spark and a commitment to progress.

As you graduates emerge from pandemic and lockdown, there is no better advice I can offer than to shape your lives with purpose and connection. For most of you, I know this will include meaningful careers in laboratories or factories, schools or stores.

But I hope at least some of you will consider finance—what we lazily call “Wall Street”—especially as it embarks on a new and transformative chapter. There are plenty of flaws to fix, but if you are creative and committed to making the world a better place, it’s worth a good, long look.

And should you decide against it after all, the advice about the sunscreen still holds.

Christopher Smart, PhD, CFA

Chief Global Strategist & Head of the Barings Investment Institute

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