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MarketsWiki 2017 Session 4Last week, we hosted one of the MarketsWiki Education World of Opportunity Chicago events at Trading Technologies. Our own CFO/CCO Michael Kraines spoke to the crowd about the prospects of a vibrant career in Chicago fintech. This event marks a summer highlight for TT interns as well as interns and young professionals associated with other companies in the Chicago capital markets industry.  

For more than 10 years, we have committed to promote education and career-pathing into the trading industry through our TT CampusConnect™ program. The recent editorial from Jim Kharouf, CEO and editor-in-chief at John Lothian News, on how to educate the next generation of industry professionals really resonated with me. He wrote that there still remains a major gap in the overall financial education of young students globally, and this presents an important challenge for the lifeblood of the financial services industry. We applaud the efforts of MarketsWiki Education, Divento Academy and Magnetar Academy, but agree more needs to be done by others in our communities, schools, universities and companies, as well as at the collective industry level.

To learn more about some of the positive steps forward and the continued challenges, read on for the text of Jim’s full editorial.

Magnetar ChallengeComing off two weeks of MarketsWiki Education sessions, it’s time to stop and look at education.

It’s hard to believe, but most schools–and let’s stick with high schools in the Chicago area–do not have a financial education program built into their curriculum.

What a shame. We demand that kids study, build a foundation to master a subject, and excel in their careers, but almost never teach them how to manage the money they earn. Chicago Public Schools is aiming to change that beginning this fall, with a new requirement that all of its students take a financial literacy “unit” to graduate. Exactly what that entails is still being decided, but it appears to be opening a door for the Magnetar Capital UChicago Financial Education Initiative, launched for just that purpose a year ago. The roots of the program go back to 2012 when Magnetar Capital created Magnetar Academy to design, build and implement a financial education course for students at Chicago-area high schools. Magnetar pays teachers to take the online course and provides them with the curriculum information for the students.

To date, the program has been adopted and implemented by more than 150 teachers at 93 Chicago-area schools. The course has been delivered to more than 10,000 high schoolers. Magnetar believes its program can be expanded dramatically primarily throughout the Chicago high school system, although each CPS high school has discretion on what program it will actually teach.

Magnetar’s program features 38 hours of curriculum training that covers everything from student loans to investing, and it is working on building a brand new curriculum. It also hosts a big event each spring with a one-day stock trading competition called the Magnetar Academy Team Challenge at Soldier Field, where more than 100 teams of students from local high schools have participated over the past five years. All along the way, those teams get coaching from experienced professionals in the financial markets.

The team at Magnetar Capital UChicago Financial Education Initiative, which falls under UofC’s STEM Education department, has its work cut out for it. There are 176 Chicago public high schools with more than 110,000 high school students, and that is not including any of the suburban schools or other high schools in Illinois. But in the city that is known as one of the top financial centers in the world, this is the epicenter for financial education for the Magnetar group.

Adding schools has largely been by word of mouth. So if your local high school could use a hand teaching financial education, you can find it here.

A tip of the cap to Magnetar for making this program happen. It is an example of a group of people who trade the markets and are trying to spread practical and useful knowledge to the next generation.

The Next Gen & Beyond

Of course, they are not alone in the quest to help students. John Lothian’s vision to educate and attract the next generation of college students to this industry led to the creation of MarketsWiki Education. Now in its fifth year, it has featured more than 200 speakers and well over 1500 attendees in Chicago, New York, London and Stockholm. And from that, just one personal story, career tip or vision provided by professionals in the financial markets can truly inspire the next leaders in our space.

I was struck by comments from Tom Sosnoff, co-founder and co-CEO of tastytrade, last week about the value of learning to trade the markets.

“I believe the single most dangerous thing we have in finance today is passive investing, and yet 99 percent of the capital allocated is through passive investing,” he said. “Why is it so dangerous? Because nobody learns anything. If you take away all responsibility and make absolutely no decisions, you learn nothing.”

The markets are great teachers. And when thinking about the potential links to other programs (TT Campus Connect, CME Group Trading Challenge or TD Ameritrade U just to name a few) there is ample opportunity for MarketsWiki Education to connect, expand the network and invite them into our markets.

And how young is young? The Boy Scout Trading Tech 300 program from the Pathway to Adventure Council, whereby firms in our industry help Scouts earn merit badges not only gives the Scouts some interesting experiences, but it opens the industry’s door to kids who are curious about all the interesting and innovative things we do. Even a merit badge in chess at DRW can open a kid’s mind to exciting possibilities in financial markets. Last school year brought over 200 Scouts to our industry. This school year will bring more than 400.

It is not just youngsters either. London is undergoing a renaissance of innovation in trader education, not just with college students but with people looking to make a change in their lives. Rob Russell, director and head of business development at Divento, which operates an accredited trading education program in the UK, recounted the inspiring story of a single mother in London who wanted to take Divento’s five week training course on trading. She got into the program but struggled to get through the demanding class. Rather than cut her from the program, Russell and his team at Divento let her stay on and provided mentoring and tutoring. She finished in four months and ended up getting a job at an investment firm, a move that has changed her life and Russell’s too.

Divento has since launched a pilot program based on that experience and it is due to finish next week. It has already secured interviews for its class with NEX Group, BNP Paribas, EGR Broking, and Tokyo Marine Kiln. Divento, for its part, has decided to move outside the traditional university brand names that most firms aim at and is focused on schools that are often forgotten by the City. Those students, many from humble backgrounds, show the desire and the skills needed to succeed.

This industry has so much to offer so many, but it is often thought of as unapproachable or impenetrable without the right college name and degree. Divento and others are looking to change that.

The number of people in the industry we have spoken to about the need for more education continues to grow. But where do you start? Maybe it is as simple as beginning with young students or Scouts, then high schoolers with Magnetar, then training via Divento-type programs as well as reaching out to people who are looking to make a change. If this industry is unforgiving, it is equally full of opportunities. It should always be accessible.

These initiatives, along with many others not mentioned, will build, expand and sustain this industry. That’s what education does.

Jim Kharouf
Jim is CEO of John J. Lothian & Co. and editor-in-chief of John Lothian News (JLN). He edits the John Lothian Newsletter, MarketsWiki and MarketsReformWiki.