Going Forward

Thus far in this blog, a number of issues in aging and their specific application to careers relating to Wall Street have been discussed. Issues such as stress, sleep deprivation, and an engrossment in work can lead to, among other things, issues within the family and ultimately increased difficulty in adjusting to and experiencing the aging process. Aside from a specific post discussing women on Wall Street, little has been said about diversity or diversity in aging in the financial world.

An analysis of diversity in aging was not unintentionally neglected; there is simply not a large degree of diversity on Wall Street. A vast majority of the top earners, top people in positions of power, and most influential aged figureheads all come from a similar background and similar appearance – white, male, English-speaking, and heterosexual. Unfortunately, the various aging experiences employees of Wall Street face and how different genders, ethnicities, races, and sexual orientations age differently are hard to find due to lack of information and specific cases. This also makes it difficult to arrive at credible models of aging or conclusions with strong supporting evidence regarding how an individual might expect to experience the aging process on Wall Street given what others in his demographic have experienced.

There is, however, a wealth of cases and information out there discussing how white, English-speaking, heterosexual males will age on Wall Street, which has been discussed in previous posts. Common names like Bruce Wasserstein, Bernard Madoff, or Ben Bernanke, or even the entire list of the top ten earning hedge fund managers of 2009 all fit this description.

Despite all of this, there is hope on the horizon. People like Raj Rajaratnam (despite his insider trading accusations) and other figures from diverse backgrounds are becoming more prominent members of Wall Street. The economic growth in China and India has led to a number of successful financiers who are shaking up the Wall Street demographic. A variety of foreign stock exchanges in emerging markets are being formed, and as globalization (of the financial markets in particular) takes a stronger hold, the diversity of the players who form policy, move markets, and make major investment decisions is beginning to change.

Gerontologists must recognize the increasingly diverse composition of employees in the financial world and ensure their stories and experiences are recorded. Doing so may lead to the development of models or conclusions with major implications for explaining the career paths and diversity in the aging process that various individuals on Wall Street experience. Such models and conclusions, while being very effective for use in the financial sector, may have applications in other sectors of the economy as well.

Family Form on Wall Street

A significant change in family form in recent decades is a significant increase in the divorce rate, which has had major implications for family form and each of the members in the family. Husbands and wives, by entering into marriage, expect to be with each other for the rest of their lives. This includes sharing important and necessary life experiences, like aging. However, a higher rate of divorce has increasingly caused adults to age without a spouse or significant other. Losing that emotional support, sense of comfort, and physical assistance can make adjusting to the aging process much more difficult for older adults. This especially holds true for individuals who work on Wall Street.

High amounts of stress and lack of free time outside of work cause rates of divorce and breakup from relationships to be very high for employees on Wall Street. Maintaining a relationship – whether it be a boyfriend-girlfriend relationship, marriage, or otherwise – is extremely difficult when there is no time to spend together. High levels of stress from work are often carried home from work, and small differences between a couple can escalate to major fights. Even more difficulties arise when the employee is required to travel often, which creates even less time for couples to be together.

Perhaps the more important issue that can arise from working on Wall Street is becoming entirely engrossed in the job. The work-life balance becomes completely lost as individuals focus on nothing in life but work, making money, and moving up the corporate ladder. Unfortunately, some of the most successful rainmakers, hedge fund managers, and other major figures in the financial world have done exactly that, which has set a poor example for up-and-coming young talent. Arguably, this is the tradeoff analysts and younger employees must make, but nonetheless, a significant impact and change on family form will result. Take Bruce Wasserstein (who was discussed in a previous post) and other rainmakers and big time brokers on Wall Street; the vast majority have had multiple spouses and children with multiple spouses.

As a small piece of anecdotal evidence, a first-year analyst in the world of investment banking recently broke up with his girlfriend of three years. The analyst and his significant other met in college and by senior year had made plans to get married. However, the stress and lack of time for each other created by the analyst’s job in New York on Wall Street made the relationship almost impossible. He became very involved in his work and was unwilling to change his career plans for his girlfriend. Unfortunately this case is not uncommon for analysts and associates at investment banks, and divorce is even more common in the higher ranks.

Multiple spouses, children with multiple wives, or even having no significant other throughout the aging process can make the aging process more challenging. Having many wives and widespread children, coupled with spending very little time with them, can cause the Wall Street worker to have little support from family members as their caregiving and support needs increase with age. A strong sense of alone and unreliability of familial support is not uncommon. Students or employees in other sectors outside of finance interested in pursuing a career on Wall Street should be aware of the family form implications and be prepared to make these sacrifices.

Follow-Up: Investment Banking vs. Sales and Trading

As a follow-up to the post comparing a career in Sales & Trading to that in Investment Banking, there is much more to be discussed than simply sleep deprivation, caregiving and assistance allowed by the work hours, and the financial strain (or lack thereof), in regards to aging. In fact, the stress levels – in terms of duration and intensity – are much different in the two careers.

It is difficult to gauge which career has a greater amount of total stress, the two careers each experience stress in different durations and intensities. Individuals in Sales & Trading feel a greater sense of urgency and pressure to deliver results, because the market is only open for a set number of hours. In that sense, the stress is more concentrated in the specific time frame of trading hours, and due to this being a relatively short amount of time during a day, high stress is generated from the limited time frame to complete work. Professionals in Investment Banking have specific due dates for work, rather than specific, immediate time frames to accomplish tasks. This may lead to a similar amount of total stress to that of Sales & Trading professionals, but it is much more spread out over time. Investment Bankers can stay late or work all night to get something done for the next day, whereas Sales & Traders are out of luck if they can’t make a sale or trade by the closing bell.

Sales & Trading professionals do feel an added amount of stress due to the high risk nature of their job activities, and even a minor mistake could lead to an individual being fired. Sales & Trading professionals deal in real time and real dollars, and even a minor mistake of adding an extra zero to a trade could lead to massive differences in profits or losses. Proprietary traders (traders who invest and trade with the financial firm’s own money) have even higher levels of stress, due to the high volatility and riskiness of their jobs. Investment Bankers have much more time to examine and double-check work, and mistakes are much more highly tolerated than mistakes in Sales & Trading. To that end, the stress can be considered to be less in investment banking.

As mentioned in the previous post about stress experienced as an investment banking analyst, stress can have major effects on an individual as he or she ages. One’s physical appearance (hair loss, grey hair, etc.) as well as physical health can severely suffer from abnormally high levels of stress. Sales & Trading and Investment Banking professionals who spend their careers in the business can grow so accustomed to being exposed to high levels of stress that it almost becomes they cannot function normally without. They grow so used to being stressed out, that even when things are calm and collected, they find something to stress about, even if it is minor. The problem these professionals face as they age is that when they do retire and leave their careers, they are likely to be highly stressed out adjusting to the aging process. For example, a retired investment banker in a retirement home may unnecessarily find small things to be stressed about, which is not only unhealthy for the retiree, but it can also cause problems for the other residents of the retirement home. Sales & Trading and Investment Banking professionals will therefore both face a higher level of stress adjusting to the aging process, as well as settling in an institutional or private care setting.

Aging and Caregiving Effects of a Career in Sales & Trading versus Investment Banking

As discussed in two previous posts, a career in investment banking on Wall Street can have drastic effects on the life course trajectory of an individual, long-term quality of health, and his or her caregiving capacity and availability. Like investment banking, a career in sales & trading on Wall Street faces similar challenges, obstacles, and negative health effects, but the extent of which is much different than that of investment banking.

Sales & Trading is often a separate department within large financial firms, and employees working in the department have unique duties and job responsibilities. An analyst in Sales spends a great deal of time on the telephone, communicating with clients of the firm. The clients include high-net-worth individuals, institutional investors, and corporate finance directors, and the Sales analyst pushes to sell specific strategies and investment products to them. Once the Sales analyst takes an order, it is then sent to the trading desk. An analyst in Trading is the actual person who actually executes the trades for the investment strategy on the stock market or other secondary market. Because employees in Sales and employees in Trading work very similar hours, work closely together, and face many of the same pressures and job challenges, the aging and health effects they face can be examined together.

Analysts in Sales & Trading do not face nearly as extreme of sleep deprivation as investment banking analysts do. Because the United States stock market, as well as bond and other secondary markets, are only open for a set number of hours and on specific days of the week, the work hours for analysts in Sales & Trading are also limited. Sales & Trading analysts will arrive a couple hours before the market opens to prepare for the coming day – read the Wall Street Journal, prepare trades, plan phone calls, etc. Analysts will also stay for a few hours after the closing bell to review the day’s events, make follow-up calls to clients, and Sales will formulate and communicate strategies to Trading. All in all, an analyst in New York might expect to work from 6am to 8pm, yielding 10 hours of time outside of work per day, and with the markets closed on the weekend, weekend visits to the office are uncommon and brief. Compared to investment banking analysts, who can expect to work from 9am to 2am with 7 hours of free time per day, including coming in to work on the weekends, this is a considerable difference.

Not only do the hours yield more time outside the office, but the actual hours themselves allow for a greater opportunity for caregiving and support services. An analyst or higher-up in Sales & Trading with children at least has the chance to spend time or eat dinner with his or her kids, because they are home by 8pm. Investment bankers, on the other hand, are at the office so late that their only chance to even see their kids is early in the morning, and with much longer work weeks, they have less time to do so. For the same reasons, employees in Sales & Trading also have the advantage over Investment Banking in caregiving and assisting their parents, grandparents, and other elders.

At least starting out, analysts in Sales & Trading make quite comparable salaries to that of investment bankers, lessening the financial strain of private assistance services. If their children or older relatives and family members require financial assistance, Sales & Trading professionals face very little difficulty in providing it. It is in the direct caregiving role that Sales & Trading professionals face the greatest challenge, due simply to the lack of time to be there in person for their children, parents, grandparents, and other older relatives. Like investment banking analysts, Sales & Trading analysts also have a high salary and great work experience to put on a resume, which significantly decreases the chances of financial strain in affording private health and support services as they themselves age. Accumulating savings and having the work experience to get promotions and higher-up jobs both make financial strain very nearly a non-issue.

In summary, a career in Sales & Trading demands fewer total work hours per week, as well as better hours of the day spent at the office, than a career in Investment Banking. As a result, Sales & Trading professionals tend to suffer from much less sleep deprivation than professionals in Investment Banking. Sales & Trading professionals also have more time to provide caregiving and support services to their children, grandparents, and other family elders. Investment Banking salaries, which are quite high, are very similar to that of Sales & Trading professionals, so both have little difficulty affording private assistance services for themselves and other dependents as they age.

Women on Wall Street: The Challenge of Working and Caregiving, and Getting Paid Fairly

Despite the growing presence of women working on Wall Street and in leadership positions at some of America’s largest companies, working on Wall Street as a female presents a number of added challenges and disadvantages compared to that which a male may experience. More specifically, studies have found that women have continually been the family caregivers, and family caregiving increases steadily over a woman’s life course. Women fulfilling the role of the family caregiver can run into time constraints and problems when trying to juggle that role with a position in the paid labor force. Another issue is that women earn less than men earn in similar labor force positions. These issues are prevalent on Wall Street, and the problems associated with the issues are actually much more significant due to the nature of the work and a career on The Street.

Any woman in the paid labor force wanting to start a family faces the challenge of needing to be the family caregiver. Normally, the challenge would be to juggle working 8 to 5 or 9 to 6 – which would fulfill the requirements of a 40-hour-per-week job – with the caregiving requirements of the family – spending time with her spouse, fulfilling the needs of children, caregiving to her parents, etc. However, a woman with the time requirements of working on Wall Street, especially as an investment banking analyst, will find it much more difficult to successfully fulfill the requirements of both her job and role as a caregiver. If a woman’s job requires her to be in the office from 9am until 10pm or later, as often is the case with investment banking or other jobs on Wall Street, it is near impossible to be a caregiver to her family and relatives.

Women required to work 12+ hour workdays in common Wall Street business divisions like Sales & Trading or Investment Banking often postpone starting a family in the interest of their careers. Being pregnant for nine months by itself is very challenging to do with only 6 hours of sleep per night, and even after having a baby, no time is left to spend with her husband and raise their children. As more time is spent at a company, promotions are earned and hours and job demands tend to fall, which is women on Wall Street tend to start families, typically around the age of 30. Even then, divorces are common and outside hires are made to fulfill caregiving roles.

Another issue prevalent with women working on Wall Street is unequal pay to that of men in similar positions, as well as a bias to promote men over promoting women. This is not as true in the lower, entry-level positions for business divisions like investment banking where hierarchy and time at each position is set in stone. However, at higher managerial and executive positions, a gender bias to promote men over women and pay a man more than a woman for the same job. As a small example of pay differences, Muhtar Kent, male CEO of Coca Cola, made nearly $20 million in compensation in 2008, where Indra Nooyi, female CEO of PepsiCo, made about $15 million. These are very similar companies and the two CEOs face very similar challenges. Obviously, company and individual performance, among other factors, come into play in deciding total compensation, but Kent earning 33% more than Nooyi seems too large to overlook. As for the decision to promote men over women, it is quite evident that men are more likely to be promoted, and on the flipside, women are more likely to be let go during downsizing. At Citigroup, 90% of managing director positions in investment banking were held by men, and a group of five women are filing a lawsuit alleging Citi discriminated against women by preferring to let go of women before men. Although nothing has been proven on Wall Street specifically, studies and anecdotal evidence show that women most certainly do not have the cards stacked in their favor.

Wasserstein: Evidence for the Health and Aging Costs of Working on Wall Street

Late last year Bruce Wasserstein, chairman and CEO of Lazard died at the age of 61. He was hospitalized for what was described as an irregular heartbeat, but passed away later that same week. Lazard is a major investment bank, reporting about $1.5 billion in revenue for 2009. Wasserstein was an investment banker that, while being able to boast having fostered one of the most famous mergers & acquisitions (M&A) deals in the past few decades, carries the detrimental health effects of stress and sleep deprivation, as discussed in two previous posts. Passing away at the age of 61 – a relatively young age by today’s standards – can be attributed much in part to the negative health and aging effects of a career in investment banking.

With long work hours and pressure to meet deadlines, the stress of his job most certainly shortened his life. Friends and those close with Wasserstein said he had exhibited no signs of cognitive decline, and Lazard’s board of directors were “shocked and greatly saddened” by his sudden death. As discussed previously, abnormally high levels of stress can lead to high blood pressure and heart problems, for which Wasserstein was suddenly admitted to the hospital. Although his exact cause of death is unknown, the surprising nature of his passing and the fact that he had shown no signs of cognitive decline point to stress and his career as the major detrimental factors in his heart condition and passing away.

It should also be noted that Wasserstein had advised on hundreds of billions of dollars worth of M&A deals, and he was a multi-billionaire himself, so being able to afford quality healthcare and caregiving services was of no problem to him. Passing away after two days in the hospital, his condition must have been serious to the extent that medical treatment (no matter the cost) could not save him. It tends to be the case that older employees on Wall Street are better off financially and do not run into problems accessing private and public assistance and healthcare programs, as is commonly the case for underrepresented or low-income groups in other businesses or locations in the United States.

Investment Banking Analyst – Part 2: Stress

Continuing from the previous discussion of the sleep deprivation effects of being an investment banking analyst, the arguably most detrimental aspect of the job is stress. The stress is generated from a lack of sleep, free time, and opportunity to receive care from others, as well as immense pressure in the workplace to produce error-free work and meet tight deadlines. Stress obviously has a long list of health effects; the most important of which are, arguably, the effects on aging.

As mentioned in Part 1 of this series, sleep deprivation can cause an investment banking analyst to feel as though he or she has physically aged four years in two years’ time. While sleep deprivation plays a major role in this feeling, stress also is a major factor in driving that feeling. Stress can also turn that feeling into a reality – stress has been noted to cause grey hair at an earlier age, or even hair loss at an earlier age. Looking and feeling older are not desired traits by young adults around age 25.

Another fallback of the immense amount of stress placed upon investment banking analysts is they grow used to it and learn to expect stress in their lives. That is not to say necessarily that analysts learn healthy ways of dealing with stress, however. Stress becomes such a constant and ongoing part of their lives that even in situations without stress, analysts commonly find or create stress to make that situation revert back to “normal” for them. Although younger Americans are typically more stressed on average, investment banking analysts take this to a whole new level as stress becomes an unhealthily expected part of their daily lives.

As touched upon briefly before, stress can cause a change in physical appearance, but it can also take a toll on the overall health of the body’s organs. The normal physical aging and aging in appearance process an individual’s body might go through is severely accelerated by working in investment banking. In addition to looking and feeling older, the body may actually be older at the end of one’s stint as an analyst. Stress can increase the risk of cardiovascular disease and hypertension in the heart, ulcers and other digestive issues, and even skin problems, which would have either not occurred at all or occurred in later life. This accelerated aging and creation of health risks are downsides of the job directly attributable to stress.

Stress in one’s life should decrease as they age. The issues and uncertainty associated with puberty, maturing, finding a job, and starting a family certainly cause stress to be high beginning in the late teens to mid twenties. However, as people grow older, more decisions are set in stone and settlement takes place, thereby reducing uncertainty and the sense of worry. This would lead to stress decreasing as people age, which holds true for Americans. I would also expect this to hold true for investment banking analysts, but due to the high stress in investment banking and analysts being accustomed to stress as part of their lives, I predict analysts maintain a higher level of stress than the average and take longer to begin becoming less stressed. As far as aging is concerned, a lower level of stress for a shorter period of time would appear to be ideal, but in the case of an analyst, he or she would experience the exact opposite. This could lead to serious aging consequences down the line.

In summary of Parts 1 and 2, sleep deprivation and stress are very real aspects of the lives of an investment banking analyst on Wall Street. Both inevitably accompany the job and create serious impacts on the aging process. College students considering entering investment banking should strongly consider these issues before pursuing a career in the field.