So, You Want to Work in Investment Management, Investment Banking, Corporate Banking, or Sales and Trading

INVESTMENT MANAGEMENT

What would I be doing?  Investment managers are paid to make money for their clients by managing their portfolios buying and selling securities so as to ensure diversification, and maintaining a level of risk and return that the client wants.  The tools investment managers use include proprietary recommendations from their firm’s research analysts and various analytical tools as well as sheer experience, nerve, and market savvy.

What is the typical career path?  If you start out at a firm that has a lot of mutual funds—a diversified investment firm like Wachovia or an insurance firm such as MetLife–you’ll basically be hired as a research analyst.  Fresh college grads are hired for entry-level jobs as research analysts along with MBA’s.  Their task is to focus on a segment of the market in which their firm—or their particular fund—is invested in, say technologies, airlines, or consumer goods, and make recommendations to the fund managers as to what stocks they should buy and sell.

What kind of person is successful?  Someone who is self-motivated, who loves doing research and learning, and who has excellent analytical skills (yes, that means math).  This job also requires excellent communications skills, as almost every day you’ll have to write a note that sums up your research and recommends a “buy” or “sell” for the financial products that you’ve been following.  So, the ability to make a strong case for your recommendations, both written and verbal, is essential to success, making this a field where the kind of things you learn as a liberal arts major — doing research, organizing an argument, and supporting your case with evidence, are just as essential as being comfortable with numbers.

What are the hours?  Once you reach the level of investment manager, you are your own boss and you’ll be compensated and promoted when you make money for your clients, not for how many hours of face-time you put in at the office.  At the entry level, you’ll do a fair amount of travel, researching companies whose stock you are evaluating, but your hours, and the level of pressure you experience, are basically self-generated.

What do people love about it?  “I can’t believe I’m being paid to learn,” says Morgen Peck, a research analyst at Fidelity who got her job straight out of Harvard and “didn’t know the difference between buy-side and sell-side.”  At the Forté Financial Services FAST Track Conference, Morgen  (a former crew team member and current distance runner) said she likes that “there’s a way to win every day.”  Winning, of course, means having made a successful recommendation to a fund manager which made money for the clients.  But resilience is just as important as a competitive nature.  “If you’re wrong just 45% of the time, then you’re doing really well,” says Peck.  In her ultimate career goal, as a division fund manager, Peck looks forward to being her own boss while making money for people who value it.  “My boss has a letter on his desk from a father, thanking him for investing the money that helped his son to go to college,” Peck told us, “and he shows that note to everyone.”

CORPORATE BANKING

What would I be doing?  Corporate banks tend to be much bigger than investment banks, and focus on the debt side of the financial picture.  Many corporate banks, like Citi, make big loans to big clients, typically global, multi-national corporations.  You’ll be working directly with those clients (so you’ve got to enjoy people), allocating credit and meeting their global financial needs.

What is the typical career path?  As a college graduate, you enter as an analyst, and your job will consist of analyzing the financials of companies, looking at the assets and credits of these companies to determine the risk associated with lending to them.  From business school, you enter as an associate, which entails a little less financial analysis and a little more client interaction.  Eventually, you’ll move up from less of an execution role to more of a strategic and client-facing position.

What kind of person is successful?  It goes without saying that, in this job, analytical skills—yes, we mean numbers, again–are essential.  Not multi-variable calculus, but enough comfort with numbers to understand spreadsheets, accounting, and statistics.  In addition, a successful banker has great interpersonal skills, as so much of the job will involve creating a positive, ongoing relationship with your corporate clients.

What are the hours?  Corporate banking is less episodic than investment banking—relationships are ongoing and long-term—so the pace is somewhat slower.  Though the workdays can be long, the consistent, solid work flow makes the atmosphere less frantic than in other areas of financial services.  When you’re working with global clients, though, as almost everybody does these days, you’ll have to deal with the time differences, meaning that phone calls can take place at odd hours.  Yes, lots can be done by email, but sometimes a phone or in-person conversation is the best way to communicate.

What do people love about it?  The customer interaction with multinational clients is something that I really enjoy and something that I’ve taken a lot away from,” says Kristin Myers, who, after getting an MBA from the Stern School at NYU, is now in her first year of corporate banking at Citi.

INVESTMENT BANKING

What would I be doing?  This is the one people write the songs about.  Well, not really, but the high-powered, high-pressured, high-risk, high-rewards world of investment banking is what people think of when they imagine a career in financial services.  Investment banks like Barclays or Goldman Sachs provide an array of services for the global business community, among them are the issuing of stocks, the acquisition of funds for corporations seeking to raise capitol, the sales and trading of securities (stocks and bonds), the creation and operation of derivative markets (options and futures, for example), and the conducting of mergers and acquisitions (M&A).  Investment banks put people, money, and ideas together, making the deals you read about in the newspapers.

What is the typical career path? Entry level jobs in investment banking do involve some long hours, basically in the back office with a lot of numbers, spreadsheets, valuation models, and reports.  It’s a good idea to start out in this field as a summer intern, not only to make the connections necessary for a post-graduation job offer but simply to get a feel for an atmosphere which can be incredibly exhilarating.  Recent college graduates, especially those hailing from prestigious universities, can expect to be recruited for positions as junior analysts, jobs they typically hold for 2-3 years, after which they go to business school.  If they choose to return to I-Banking, newly minted MBA’s sign up for three to five years as an associate, where their responsibilities are still analytically-oriented:  doing financial modeling, creating pitch books to market the bank’s financial packages to institutional clients, and devising financial strategies.  With advancement comes more client contact and the role of Vice President will have more risk, fewer hours, and far more client contact.  Ultimately, successful I-Bankers reach the level of managing director, where they make deals, usually within a specific industry, meeting with top-level clients who represent usually no lower than the third rung of huge, global corporations—CEO’s, CFO’s, COO’s.

What kind of person is successful?  Simply to get hired in an i-banking job, you have to be incredibly smart—meaning not just that you’re good with numbers but that you’re also quick and creative—and incredibly driven.  But teamwork is equally important; investment banks value people skills as well as analytical skills, and they look for future employees who have demonstrated leadership abilities and relationship skills.  “You put a bunch of bankers in a room, and the women outshine the men any day.  The ability to size people up, to use your intuition to assess a situation, is absolutely critical to success in this field,” former JP Morgan Senior Vice President, Laura Born concludes.

What are the hours?  Entry level positions require 80-100 hour weeks for the first few years of your career.  “If you’re the kind of person who needs a lot of sleep, then investment banking is not for you,” says Born.  But Born, continues, i-banking offers challenging positions with a great deal of variety,  the hours you work change enormously as you move up in investment banking, and, if you choose to move your career along a different path, the entry-level experience you gain as an analyst can provide an incomparable springboard to jobs in other areas of financial services.

What do people love about it?  “I work with really smart, energetic people and often find myself in a room where I’m the youngest person and the only woman, yet clients who are 60 years old and the CEO’s of major corporations are listening to what I’m saying,” says Goldman Sachs Managing Director Monica Mandelli.  “I love the energy, the fun, and the high pressure.  I love the thrill of doing deals. You stay up all night, you don’t care, and you love it.  And don’t let anybody tell you that you can’t have it all.  I have a husband, a two-year-old daughter, and the most exciting job that I can think of.”  You can hear more about i-banking directly from Monica on the podcasts from our Forté Financial Services FAST Track Conference.

SALES AND TRADING

What would I be doing?  The sales and trading of securities can take place in an investment bank, a commercial bank, a brokerage, or an independent trading floor such as New York Stock Exchange or the Commodities Exchange in Chicago.  If you’re in sales, then your job is to sell financial instruments to clients — institutional investors, mutual funds, non-profits, and, if you choose that path, private clients.  More than a specific product, you’re selling ideas and making your clients believe in them.  Traders are the market makers, generally moving securities around to get the most value that they can.  Trades where millions of dollars are won or lost can happen in the blink of an eye, making for a lot of adrenaline pumping on the trading floor.

What is the typical career path?  There are not a lot of bureaucratic layers in this part of the financial services industry.  If you’re making money for your clients, you succeed, you get more power, more accounts, and you’re compensated accordingly.  Trading is one of the few career paths in the industry where you can have a successful, long-term, lucrative career by remaining in the same role you were hired into.

What kind of person is successful?  All the stereotypes are true:  you have to be tough, quick-witted, and aggressive.  You have to like to win.  A lot.  And you need a ton of  confidence, a resilient attitude and a thick skin to enable you to go back to work the with the same positive, can-do attitude the day after may have lost a lot of money.

What do people love about it?  “I love the practicality of sales and trading, the fact that you touch everyone’s life,” says Angela Amos, formerly an Associate in Commodities Research at Lehman Brothers.  “I like seeing results, getting on the subway after work and saying, ‘Yeah, it’s hot outside, but I made money today.’  I like the feeling of trading and then closing a great deal.  And I like that even when I’m wrong, I learned something for the next time.”