In the finance industry, the concept of meritocracy is often celebrated. It’s the belief that success and advancement are earned through individual skills, abilities, and performance rather than external factors like connections or background. In theory, the finance industry should be a place where the most capable and talented people rise to the top based solely on their achievements.

However, despite the meritocratic ideals that permeate finance, networking remains an essential part of career advancement in the field. Finance professionals and job seekers in the industry often find that relationships, social connections, and who you know can play just as significant a role as your skills and qualifications. This raises an important question: If finance is truly meritocratic, why does networking hold such weight?

To understand this paradox, we need to dive into the dynamics of the finance industry and explore how meritocracy and networking coexist.

1. The Role of Opportunity in Meritocracy

While the meritocratic ideal suggests that anyone can succeed based on talent alone, the reality is that access to opportunities is often a critical component of success. In finance, opportunities can come in many forms, such as a high-profile project, an important client relationship, or access to decision-makers.

Networking plays a vital role in opening these doors. For example, a well-placed conversation at a networking event or a connection made through a mentor could lead to the right opportunity at the right time. No matter how talented you are, without the right opportunities to showcase that talent, it’s difficult to rise in the industry. Networking helps create those opportunities by connecting people with the right individuals who can provide career-advancing chances.

2. The Importance of Building Relationships in Finance

The finance industry is not just about raw numbers and technical expertise. It’s a relationship-driven business, where trust, collaboration, and influence often play as much of a role as technical know-how. Building relationships with colleagues, clients, and mentors is crucial for success.

In a highly competitive field like finance, personal connections can provide a competitive edge. Networking allows you to establish trust and credibility with others in the industry, including those who may be in a position to influence your career path. Even in a meritocratic environment, having strong professional relationships can give you a better chance of being considered for opportunities or promotions.

3. Mentorship and Guidance

Mentorship is another key component of success in finance, and it’s often facilitated through networking. Having a mentor who can offer advice, provide feedback, and help navigate the complexities of the industry is incredibly valuable. Many successful finance professionals point to the guidance they’ve received from mentors as a key factor in their career trajectory.

Networking helps establish those mentorship relationships. A mentor can provide insights that go beyond technical skills, helping you understand the political landscape of your firm or advising you on how to best position yourself for success. While merit may get you the attention, mentorship through networking can help guide you to the next step in your career.

4. The Unspoken Value of Social Capital

Social capital—essentially, the value of your network and connections—can be just as influential as your professional qualifications. In the finance industry, where big deals, client relationships, and strategic partnerships often require personal rapport, social capital plays a critical role in career advancement.

Networking helps you build this social capital. When you’ve made connections with the right people and built a reputation for reliability and competence, it becomes easier to access high-value projects, new clients, or leadership opportunities. In a meritocratic system, your qualifications and skills may get you in the door, but your network can open doors to the opportunities that will take you to the next level.

5. The Role of Perception in Career Success

Meritocracy in finance is often about how well you’re perceived by others, not just the work you produce. Perception can impact promotions, job opportunities, and the likelihood of getting key assignments. Networking helps you manage and enhance how others perceive you within the industry.

When you’re visible in your network and consistently interact with industry peers, senior leaders, and influencers, you build a reputation that may open doors even when your skills alone might not be enough. Networking allows others to get to know you beyond the resume and understand the value you bring to the table. In a competitive field like finance, this can make all the difference when it comes time for a promotion or a career move.

6. The Role of Serendipity

No matter how talented or hard-working you are, sometimes career advancement in finance comes down to timing and luck. Networking provides you with the chance to be in the right place at the right time. A connection made years ago might suddenly turn into a critical opportunity when a position opens up, or you may hear about a new project or initiative that aligns with your skills through your network.

While hard work and merit can get you far, networking increases the likelihood of these serendipitous events happening. Building and maintaining relationships in the finance world is as much about keeping yourself on the radar as it is about waiting for that perfect opportunity.

7. Networking and Diversity of Thought

In addition to access to opportunities, networking can also bring diversity of thought and experience, which can improve performance in a meritocratic environment. When you network, you expose yourself to a wide variety of perspectives, ideas, and strategies that can help you approach problems and solutions differently.

In finance, where innovation and new ideas are often highly valued, connecting with others in different sectors, roles, and backgrounds can lead to insights that give you a unique advantage. In a meritocratic environment, standing out and being able to provide new, innovative solutions can be just as important as technical expertise.

Networking and Meritocracy Are Not Mutually Exclusive

While finance is often described as a meritocratic industry, the reality is that success isn’t solely determined by individual performance. Networking plays an essential role in ensuring that your skills and abilities are recognized and that you’re given the opportunities to showcase them. In fact, networking can help level the playing field by giving you access to those critical opportunities and relationships that enable you to succeed.

For finance employees and job seekers, understanding that meritocracy and networking can coexist is key. While developing technical expertise and achieving strong performance is crucial, networking helps you ensure that you’re in the right places, with the right people, at the right time. It’s not about who you know to the exclusion of what you can do—it’s about using networking as a tool to complement your skills and increase your chances of success in an ever-evolving and competitive industry.