Author: David Semmens, CFA
David Semmens, CFA, from the CFA UK Social Inclusion Working Group assesses social mobility issues from across the UK and looks into the findings from a UK Government report Social mobility in Great Britain – state of the nation.
The most recent Social Mobility Commission1 report shows Scotland is only slightly more socially mobile than Great Britain overall. People whose parents have a professional background are about 80 per cent more likely to be in a professional job than those from working class backgrounds in Great Britain overall. In Scotland, this gap is around 70 percent. This is only a marginal difference, but significant if you are one of those experiencing greater social mobility.
What steps are being taken to improve this?
There are several charities supporting these efforts, with the Robertson Trust the largest independent grant giving Trust in Scotland. Set up by the three Robertson sisters in the 1960s, it is primarily financed via dividend income received from Glasgow based Edrington which owns amongst other brands, The Macallan and Highland Park.
Every year, through a competitive process based both on need and merit, the Robertson trust admits between 150 and 160 “Robertson Scholars”, across the full range of academic subject with between 550-600 scholars receiving support at any one time. The prior academic year, 2019-2020, has around 30 scholars studying Maths, Economics and Finance which about 5% of the total intake. Interestingly, 2019 saw the largest number of those studying finance (14) whereas 2020 saw the lowest with only 2.
What does this support entail?
Working with more than half of Scotland’s 19 universities, assistance is given to those successful scholars who are nominated by their schools as having the academic base but not the financial means to achieve their potential. This financial backing is complimented by training, mentoring and careers’ advice to ensure student are “office ready” before they enter the world of work.
There is also a fully funded internship program to help third year scholars build their CVs at the same time as giving back. This is particularly useful for students who may lack the experience with an interview process2 and to help them appreciate the importance of cultural fit3.
Helping scholars enter the financial services industry
While much of the financial world focuses heavily on London, Edinburgh is very much Scotland’s first, and UK’s second, financial centre4 with firms headquartered in Scotland managing around a quarter of the UK’s assets5.
The Robertson Trust saw only 8 out of 108 of the 2017-2018 class now working in the financial industry. Interestingly, almost all Robertson scholars upon graduation have chosen to stay in Scotland’s financial sector rather than head down to London. However, this may also be because support for access to interviews and internships in London has dried up since the financial crisis.
How does the CFA UK help?
The CFA UK provides financial support to the Robertson Trust, but more valuable than simply providing money, the CFA UK helps members provide time and advice to those early in their careers. For instance, one of the CFA UK programmes, the Early Career Mentorship programme, supports those with a lower level of social capital6 bridge the advice gap.
The program helps by providing informal mentoring which can provide the advice and informal touch points that some mentees might lack if their financial services network is still nascent.
What does Covid-19 mean for the outlook?
While remote internships are not necessarily new7, the Covid-19 pandemic made them the default option. The current economic uncertainty has brought significant unease about the opportunities for those entering the work force this year8. While the financial services industry has a well-known cyclical element to it, even those components previously more recession proof such as accounting have been cutting back the number of summer internships despite being able to offer online work experience9.
Remote working should in theory remove some of the hurdles to improving access and social mobility, since you can now work from anywhere with reliable Wi-Fi. But this arrangement can also create problems for those interns who do not have a quiet place to work (and reliable Wi-Fi) or a good enough laptop10.
Companies should, where possible, take a longer-term approach to talent management focusing on broadening their pipeline11, especially as at time when there is significant government support available12.
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References:
2 https://www.morganstanley.com/articles/10-biggest-interview-mistakes
3 Rivera, L. A. (2012). Hiring as Cultural Matching: The Case of Elite Professional Service Firms. American Sociological Review, 77(6), 999–1022. https://doi.org/10.1177/0003122412463213
4 https://www.longfinance.net/programmes/financial-centre-futures/global-financial-centres-index/
5 https://www.theia.org/sites/default/files/2019-09/IMS%20full%20report%202019.pdf
6 McDonald, S., & Elder, G. (2006). When Does Social Capital Matter? Non-Searching for Jobs across the Life Course. Social Forces, 85(1), 521-549. Retrieved July 5, 2020, from www.jstor.org/stable/3844426
7 https://www.bbc.co.uk/news/business-49679094
8 https://news.efinancialcareers.com/uk-en/3003907/deutsche-bank-graduates-delayed
9 https://www.accountancyage.com/2020/05/01/accountancy-students-facing-pandemic-career-delays/
10 https://upreach.org.uk/wp-content/uploads/2020/04/Coronavirus-Survey-of-Associates.pdf
David Semmens, CFA is Chief Investment Officer at Wealthify.