Chinese students pay agents US$12,000 for shot at Wall Street internships

The jostle for jobs comes as international and local banks are stepping up hiring in China as the nation opens its financial market. PHOTO: AFP

BEIJING (BLOOMBERG) - Getting a shot at a coveted investment banking or finance job is a cutthroat, and sometimes controversial, business in China.

Career consulting firms have mushroomed in recent years, enlisting what they say are thousands of finance professionals to help open doors to students who can afford it. Firms are charging US$12,000 (S$16,000) or more to help students land internships and eventually jobs at Wall Street powerhouses such as Goldman Sachs and Citigroup.

The programmes offer an inside track to students by pairing them with bankers to help with strategy, networking, drafting letters and even internal referrals, touting success in landing jobs from Shanghai to New York. They also target Citadel and others hedge funds, consultants such as McKinsey & Co and local heavyweights like Citic Securities. Most of the companies when contacted by Bloomberg disavowed having any relationships with the coaching firms.

The practice has a growing number of detractors, who are questioning whether it's fair or good for the industry to give another leg up to the well-heeled. It also raises ethical concerns with bankers - sometimes without informing their employers - moonlighting on the side for fees.

Chinese bankers working as mentors with agencies and charging for internal referrals has become rampant in recent years, said Sean Wang, a senior banker and author of How To Make It As An Investment Banker.

"It opens wide the question of fairness," he said. "If you pay to have someone else to write your cover letter, or get a first-round interview, is it fair to those job seekers who don't have or can't afford such packages?"

The jostle for jobs comes as international and local banks are stepping up hiring in China as the nation opens its financial market. Goldman Sachs, UBS Group and Credit Suisse Group, for example, are all seeking to double or even triple their workforces in a hunt for Chinese riches.

That push offers little comfort in a tough job market. Hit by the pandemic, openings in finance slumped 12 per cent in 2020, with candidates seeking roles in trust, securities firms and funds facing competition from about 40 applicants for each position, according to a report by recruitment website

The wider job market is at its bleakest in decades for the record 9.1 million fresh Chinese graduates this year. Their ranks have been further swelled by droves of overseas students, returning home as tensions with the west rise and the nation successfully contains the pandemic still plaguing many countries.

Job training and career counseling is, of course, not limited to China. It's also big business in the US, with the industry hitting more than US$16 billion last year, according to IBISworld. Firms in the US are also touting they can provide finance professionals as mentors. Wall Street Oasis says it has more 1,000 different professionals to choose from, offering packages that range from as little as US$79 to US$1,390.

Chengdu-based DreambigCareer, which was started in 2013 and helps Chinese studying abroad, had 4,000 clients last year, a fourfold increase over the past four years, according to Joseph Guo, its co-founder and chief operating officer who's a former banker at Credit Suisse. The firm has enlisted more than 3,000 bankers and consultants from global firms in the effort, it claims.

The agency gets in on the ground early. A programme it calls Blackbelt is mostly sold to college freshmen and sophomores to help them set up an internship in their junior year. It offers more than 100 hours in training and each student is assigned four to five mentors, Mr Guo said.

'100 per cent verified'

The sessions are mostly online, but in one case a mentor in London took a student out for happy hour drinks to help with networking, Guo said. DreambigCareer's rates range from a few hundred dollars to more than US$10,000, which is at the lower end of the industry's fee range, he said.

Mr Guo dismissed that the service gives an unfair advantage. Instead, he said, it levels the playing field for Chinese students aiming to break into foreign banks. The company says it has helped students obtain more than 6,000 offers from big name financial companies.

The firm, which in 2018 was acquired by Bright Scholar Education Holdings, a New York-listed education company backed by Chinese developer Country Garden, featured on the front of its website what it said was a loan origination specialist from Morgan Stanley and a strategist from hedge fund Citadel as its star mentors. The picture of the Citadel employee was removed after inquiries from Bloomberg.

A spokesman at Morgan Stanley said the individual named on the website at DreambigCareer left the firm in 2019. A spokesman for Citadel said the individual hasn't been a mentor while employed at the firm.

All the mentors are "100 per cent verified" but the employment information might not be up to date, according to Guo. While most of them obtain approval from their employers before taking on their roles, Mr Guo said he can't rule out the possibility that some might not have notified their companies. Some of the mentors request to remain anonymous and ask not to take on students looking for internships or jobs at their own firms to avoid a conflict of interest, he said.

Mentors can typically make a US$100 or more an hour for their efforts, according to people in the industry, who asked not be named discussing internal matters.

A representative from Breadoffer, which according to marketing materials charges US$12,000 for a shot at a Goldman job, said the packages don't guarantee a full-time offer from any particular firm. It also charges US$9,000 to help land a spot at a domestic powerhouse such as Citic Securities.

Students and people in the industry say one agency, called Wall Street Tequila, likely charges the highest fees. The Shanghai-based firm claims on its official Wechat account that it has helped more than 3,000 students obtain high-paid offers of 1 million yuan (S$204,700) in the past seven years. In an interview with Chinese media in 2017, its founder, Jerry Sun, a former JPMorgan Chase & Co analyst, said it trained more than half of the Chinese that made it to a top nine global bank during 2015 to 2017.

Wall Street Tequila and Sun declined multiple requests for an interview. Bloomberg couldn't independently verify the success rates or clients at the various firms.

No relationship

"The only official source of career listing and application is Citic Securities career website," Citic said in a statement. "All candidates are treated on a fair basis and all members of staff are recruited on the basis of their ability."

Spokespeople at Citi and Goldman said they don't have any relationships with the firms. McKinsey declined to comment.

The competition has also spawned murkier tactics. A consultant at Accenture said they've been approached numerous times on LinkedIn by agents soliciting their services, with one agency offering at least US$1,500 for an internship referral, according to a message seen by Bloomberg.

Guo from DreambigCareer said the firm doesn't pay employees from big firms for internal referrals.

It's also not limited to finance. Technology behemoth Tencent Holdings issued a statement in August saying it has never entered into any partnerships with third-party agencies and individuals for internal referrals.

Going alone

Isabel Xu, a 24-year-old graduate from Johns Hopkins University, was one of the lucky ones to land an internship at a top Chinese brokerage last year. But she did it all without the help from the career training firms, saying they were too expensive.

She started in a group of 70 recent graduates, which was winnowed to about 20 people after a first week of assignments including mock negotiations. Later on, Xu and a handful of fellow interns were offered permanent jobs.

"It would certainly have been a great help to get to know these bankers and finance guys early on and have internal referrals, but I don't think that's an absolute advantage," she said. "At the end of the day, it's down to fundamentals and if you don't have skills like financial modelling you won't survive the internship."

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