From the Street to the Valley

Even with its less-than-stellar reputation in the public eye, Wall Street has consistently been the destination of choice for business school students looking for a budding career in finance. Unfortunately for private equity shops and big banks, however, MBA students who think of themselves as “highly ethical” are no longer as interested in Wall Street careers as they once were, according to a recent report from CNN Money.

In a speech at the Economic Club of New York, William Dudley, president of the New York Federal Reserve, said these highly ethical students are self-selecting out of the financial industry, and the stats from top schools back him up. At Columbia Business School, for example, 56 percent of 2007 grads went into financial services, but by 2014, only 35 percent of grads were heading into the field. For private equity in particular, the decrease is even more drastic – the industry attracted 5.6 percent of grads in 2007, a figure that plummeted to 2.6 percent in 2014.

So where are these do-gooder grads ending up, if not in finance? Silicon Valley, according to the CNN report. But don’t think they’re all drawn to West Coast start-ups solely by the pull of their moral compasses. The report revealed another reason why finance isn’t as popular as it once was – regulation. So if you’re seeing that stack of associate applications getting thinner and thinner each year, don’t just blame industry ethics. Blame Dodd-Frank.