From Big 4 Transaction Advisory Services to Corporate Development at a Large Financial Institution: Half the Audits and Twice the Money?

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Big 4 Transaction Advisory Services to Corporate DevelopmentIf you want to work in corporate development and have a reasonable lifestyle, solid pay, and hang out with Ron Conway and Ashton Kutcher while turning down multi-billion dollar acquisition offers (just kidding – read the article I linked to), one option is to suffer your way through investment banking and break in after working 80-90 hours per week for a few years…

…or you could just skip that altogether, work in Big 4 transaction advisory services, and leverage that experience to break in – like our interviewee today did.

He did what most consider “difficult to impossible”: moving from traditional audit/accounting at a Big 4 firm into the advisory group, and finally into corporate development at a well-known financial institution.

And today, he’s going to explain the entire process – from his story and how to make all these moves to what corporate development at a Fortune 500 company is like.

From Chartered Accountant to Chartered Acquisitions

Q: You know how this works.

Give us your story and the overall timeline for what you accomplished.

A: Sure. I went to a top business school in Canada, majored in accounting, and had no idea what I wanted to do afterward.

Finance seemed appealing, but I graduated in the middle of a recession and most students were not getting jobs in the industry.

So I shifted gears and followed the herd into accounting, did an internship at a Big 4 firm, and signed on full-time afterward, planning to become a Chartered Accountant.

The Chartered Accountant (CA) certification is viewed very differently in Canada and is more respected than the CPA in the US, so it can actually help in winning finance roles here.

I worked there for a few years, learned a lot, but did some soul-searching again as the economy improved and realized I did want to go into finance after all – mostly for the faster pace and the advancement opportunities.

Q: So what was your next step?

A: I read all your articles, started networking with financiers, and also started studying for the CFA and CBV (Chartered Business Valuators certification).

I started in the financial institutions audit practice of this Big 4 firm, and I knew I’d need to transfer to the advisory arm to have a good shot at getting into roles such as IB/PE.

But the audit group at my firm accepts ~100 candidates per year, while the advisory group only takes 1-2.

The odds weren’t exactly in my favor, so I networked like a fiend to get in, and did a lot of valuation, modeling, and due diligence projects on my own to show I had the required skills.

I managed to defy the odds and get in, and after a year in TAS I had a solid resume with several deals.

I then leveraged that experience to win private equity interviews, plus interviews in investment banking, corporate development, venture capital, and other fields.

After going through that process for a few months, I had a few options and I ultimately accepted a corporate development role at a large financial institution here.

Q: Awesome. So let’s go back to the beginning – how’d you make the move from auditing to advisory?

Can you walk us through the process?

A: First off, it’s exceptionally difficult to move over because the Big 4 firms operate as partnerships, not corporations.

This means that each junior analyst they hire cuts directly into each Partner’s year-end payoff.

My group received around 300-400 resumes in my year, interviewed about 20 candidates, and gave out 1-2 job offers.

All the deals are “lower middle-market,” so deal flow fluctuates more than at a large bank and there isn’t always a huge need to hire people.

My process went like this:

  • 3 rounds of interviews with more junior employees and managers, with up to 4 interviewers across 2 rounds. Questions ranged from behavioral to valuation/technical.
  • 1 take home project that required me to submit a research report on a selected company.
  • 1 case exam with Excel exercises such as summing numbers, pivot tables, OFFSET, INDEX/MATCH, filtering, macros and so on.
  • Interview with the Partners after that – these were more fit-focused, but the intensity level was still quite high.

It was rigorous, but one advantage I had was that they do like to hire internally.

Big 4 advisory groups will always look at internal applicants first, no matter how good external candidates are.

“Hiring season,” at least in Canada, takes place in April through June. Most people therefore start networking in March, which is a big mistake – there’s not enough time to build connections and solid relationships in only a few months.

I started 1 year in advance, got to know everyone in the group, and went through informational interviews for 6-7 months before even asking about working there.

In Canada, you also need a CA and/or CFA and/or CBV to have a good shot at making this move – everyone else will have one or more of these designations, or will be working toward getting them.

A lot of people walk into interviews and say they “will” study and “will” get the certifications after joining the group.

By contrast, I went in and said that I was already studying for them and pointed to specific progress I had made. That sounds simple, but it made my story a lot more credible.

I don’t have a super-secret ninja trick for how I got in, but those certifications and my extensive networking helped the most.

You really only have one shot to make a good impression during the hiring season each year, so you need to make it count.

Q: OK, great. So you won the offer after going through an odds-stacked-against you recruiting process.

What then?

A: I was super-excited at first since it’s so hard to get in. I thought I might stay there for 10+ years and eventually become a Partner.

But as I looked around, I realized friends in the finance industry had more opportunities and potential for quick advancement.

I also knew that the longer I stayed there, the tougher it would be to move somewhere else – and pay doesn’t increase by a huge amount each year, so there isn’t much upside to staying.

I started applying to all the roles I mentioned above (IB, PE, Corp Dev, VC) at around the same time, and I jammed my first round interviews into a 2-week period I called my “vacation” at work.

I highly recommend doing that if you’re making a lateral move because it saves a lot of time – you won’t have to re-learn your answers or review the technical questions dozens of times across many months.

By my 4th interview, I had my story down and I knew what to emphasize, what to avoid, and how to change my tone and body language depending on the interviewer.

They took longer to get back to me in the 2nd and 3rd rounds, so those went on for weeks to months into the future. I often interviewed early in the morning before work started.

I also narrowed down my options and realized that I didn’t mesh well with most of the bankers I met.

I was still interested in finance, but I could tell that IB wasn’t for me no matter how much it paid.

Q: What types of questions did you get in these lateral interviews?

A: First-round interviews tended to be high-level behavioral questions, with some focus on the deals I had worked on. Some people valued the Big 4 experience, while others were skeptical.

The “Why accounting first, and now finance?” questions also came up, so I explained how it was my plan all along to gain a solid grounding in accounting and valuation and then apply those skills to finance once I had become more valuable.

In my banking interviews, I got a lot of infrastructure / project finance-type questions as I applied to these roles; PE firms asked about my views on industries, deals they had done, and how their portfolio companies were doing.

The corporate development interviews went the best for me because I meshed very well with the people there.

They did ask technical questions, but much of the focus was on questions such as: “Does it make sense to acquire this company? What about this one? Should we do a JV instead? Which industry sector should we get into next?”

Corp Dev acts like the eyes and ears of senior management; our job is to think like the CEO.

Having audited financial institutions before, I also knew quite a bit about FIs and did especially well in my corporate development interviews at the financial institution I ended up joining.

On the Job in Corporate Development at a Financial Institution

Q: So it went well, you liked the corporate development team the most, and you accepted an offer there at a large financial institution.

What has the job been like so far?

A: Here’s the rough breakout of my time:

  • 33%: Financial Modeling and Valuation – For example, bankers might send over a pitch book and my MD might ask me to run the numbers and see if we should do a deeper dive or pass.
  • 33%: Memo Drafting and Presentations – Since we’re a publicly traded company, a lot of documentation is needed and M&A deals are much more process-driven.
  • 20%: Due Diligence – Researching potential targets and new industries, and doing deep-dives on companies that we’re seriously considering acquiring.
  • 14%: Strategy – Looking at markets the strategy team is interested in entering, identifying potential acquisitions, and creating action plans for our team.

Your other corporate development interviewee worked at a tech company and his job was quite informal – it was more of a start-up, so he wore many hats and did whatever was required at the moment.

My role is a bit more formal because financial institutions are more mature.

There are more layers of bureaucracy here – we have to get Board approval, management approval, and deal with the usual ego / office politics issues.

This industry is also heavily regulated, and every transaction is scrutinized by governments, regulators, research analysts, and shareholders.

An M&A deal that’s even slightly dilutive would be very difficult to push through the Board.

Q: Great. So it sounds like the focus is very much on M&A (with some strategy) and not so much on partnerships or joint ventures?

A: Yes, we have done some of those historically but they often get “messy” in FIG and winning approval from regulators becomes an ordeal.

They’re more helpful for smaller companies that want to pool capital and diversify to reduce risk.

Partnering with another institution also makes it harder to make decisions because you have to compromise – which makes the process even slower than it already is.

So our focus is definitely on buying companies, divisions of companies, and selected assets (e.g. a bank’s credit card or mortgage portfolio).

Q: And where do these ideas come from? I noticed you didn’t mention “Sourcing” in the beginning when you gave a breakout of your time.

A: That’s right, we don’t generally generate ideas or source deals. Ideas mostly come from investment banks pitching opportunities and the relationships we have with them.

We also don’t have the authority to say “Yes” to a deal or even bring it to the Board – instead, we simply advise the relevant business group here.

We then need that specific business to support the deal, or “kill” it.

So if UBS is selling part of its asset management business, a bank pitching the deal might take it to our asset management team first.

They look at it, then they send it to us for technical and valuation analysis and our thoughts, and then they decide whether or not to move forward.

As the deal progresses, our group will take the reins on managing the M&A process, controlling the financial model, negotiating the legal agreements and communicating with senior management and the Board.

We try to standardize valuation as much as possible by using a DCF to value all these targets (remember, a DCF still applies to most areas in FIG outside of commercial banking and insurance – and even in those, you could still use a modified version of it).

We also advise on internal divestitures – so it’s not just evaluating potential acquisitions that banks show us, but also telling groups internally what we think their assets are worth, how to sell them off, and who might be interested in acquiring them.

Q: What’s the “hit rate” on these deals? Is it as low as it is in PE, where it’s often 1 closed deal out of 100+ you look at?

A: In an average year, we might see 100-200 deals and they are always sent over to the relevant business unit first… where it is often shot down right away.

Around 25% of these deals make it past the initial Yes/No stage, after which we sign the NDA, get the CIM, and run the numbers.

And then only a tiny portion of those turn into real deals. So the odds are not great – I’d say it’s about the same as the odds in PE, maybe a little a higher.

One difference in our group is that if something does not make strategic sense, we won’t buy it even if the deal makes perfect financial sense – e.g. the company is undervalued and selling at a 50% discount to its intrinsic value.

Most PE firms would leap at that opportunity, but we care about more than the numbers.

Corporate Development: Culturally Sound?

Q: Thanks for that detailed description of the work itself.

What’s the hierarchy like on your team?

A: Here, it’s Analyst –> Associate –> Associate Director –> Director –> Managing Director.

After that, you become Head of Corporate Development, and then you move into C-level executive roles.

This is not at all like investment banking where there’s an “up or out” philosophy and turnover is very high.

Many people join and spend their entire careers here, or even 10-15 years, which is still an eternity compared to the average tenure in IB.

It’s best to get in as an Analyst if you want to join this team. We very rarely hire senior people externally; just like at a Big 4 firm, internal promotions are always preferred.

Moving from Analyst to Associate takes about 2-4 years, but after that it varies and it depends on who wants to stay, who leaves, and who gets promoted.

Some people get frustrated with this pace of promotion and move into other business units (e.g. investment banking or strategy) or even corporate development roles at other firms.

Q: I can imagine. It’s not exactly fun waiting for retirements and promotions.

But it sounds like the culture is pretty relaxed overall?

A: Yes. They do have a “get stuff done” attitude, but there’s no pressure to do work for the sake of doing work, and there’s no “face time.”

In IB if you’re not closing deals you’re not getting paid… so there’s always pressure to pitch, do “speculative work” for potential clients, or do more deals.

But it’s much more like the buy-side here, where you say “no” more often than “yes.”

The average is around 50 hours per week, but that goes up to more like 70-80 hours per week when a deal is in its final stages and consuming a lot of time.

It’s actually very similar to the culture at my old Big 4 firm, where the hours are very reasonable except for when a deal heats up.

Q: And now to money, my favorite topic.

A: Hah, well, the pay here is actually public information – or at least the base salaries are, because we disclose them.

Juniors here earn anywhere from $60K to $90K CAD, but with a lower bonus than investment banking analysts.

All-in compensation is about 25-40% lower than IB, but that usually equates to a higher base salary and a lower bonus.

To me, that’s better than depending so much on a fluctuating bonus number each year; plus, you come out ahead on an hourly basis.

Q: Agreed. Any final thoughts on your story and what you learned during this entire process?

A: Let’s see… for recruiting, you need to be interesting and build a life rather than just a resume.

Too many people walk in and emphasize their number-crunching skills, but there are a lot of people who are good with numbers. Talking about travel, volunteer work, hobbies, and so on worked well for me.

If you’re at a Big 4 firm and you’re looking to move into a finance role like I did, do not give up halfway through.

Your colleagues will all be skeptical, but you have to be persistent and ignore their criticism.

The move has completely been worth it – I go to meetings here with very senior people that I not have been able to attend otherwise, and I’ve already seen some of our deals in the news.

Q: Great. Thanks for your time!

A: My pleasure.

About the Author

is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys learning obscure Excel functions, editing resumes, obsessing over TV shows, and traveling so much that he's forced to add additional pages to his passport on a regular basis.

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24 Comments to “From Big 4 Transaction Advisory Services to Corporate Development at a Large Financial Institution: Half the Audits and Twice the Money?”

Comments

  1. Tim says

    How do you see the Volcker Rule impacting Corp Dev in the future, specifically for banks? Based on the current regulatory environment, would it be a better career move to go directly to PE if available?

    • says

      Actually, the Volcker Rule could make it more interesting in the short-term since banks will have to divest some of their divisions or otherwise sell off other assets.

      PE vs. corporate development comes down to a lot more than the regulatory environment – it’s a different style of work, different advancement opportunities, different culture and work environment… so it’s probably better to decide based on those factors, especially since regulations can always change but something like culture does not change as quickly, if at all.

  2. ib says

    Hey Brian I have applied to a top asset management firm i.e vanguard state street,pimco and so on…
    I know an employee their who I am good friends with and he said he will do all he can to help me, i,e put in a good word with hr and tell them what a good candidate I am and so on…
    Should that be enough for at least an interview?

    • says

      In most cases, no, because you need to follow-up, make sure he really recommends you, etc… people get busy and forget about these types of favors. So you need to follow-up and ask him if he had a chance to mention you to HR and make a recommendation.

  3. ib says

    Ok I will do that.
    Its just he came to me and invited me as we went to the same high school but I will ask him to make sure. Any idea how long I should wait before asking him?

  4. Jason says

    Thanks Brian for this great story.
    I usually hear that corp dvlp and/or strategy jobs at large financial institutions are purely based on networking as there isn’t much need for analyst/associates due to very low turnover. I might be wrong, as it seems he went through the whole process by applying online etc… not sure if this position was opened up but proving to his connections that s/he can be an added value to the company or there was an opening online where s/he applied and got invited to an interview.
    I know few positions usually open up year round and many are hunted down internally through exiting IBs who are looking to exit.

    Regards
    Jason

    • says

      Thanks!

      I think he did some networking (so more than just applying online), but he still had to go through a formal recruiting process to get in. But you’re right about the low turnover, that always makes it more difficult to get in, and it’s very common at these large financial institutions.

  5. Mike says

    would you say that it is easier to break into TAS in a regional firm? I will be interning at a top 100 firm in the country and they have a pretty large TAS division. Would it be easier to break into there versus a big 4?

    thanks.

    • says

      Yes, it’s usually easier to break into TAS at a regional firm because there are fewer qualified candidates applying. On the other hand, they also have fewer openings so it might be a wash. But generally it is still easier to get in there since the Big 4 always attract more applicants.

  6. random says

    Thanks Brian for yet another insightful piece. Would you / the interviewee be able to throw some light on the CMA certification (Chartered Management Accountant) by CIMA. Is it heard of / well know in Canada ? Do companies value it ? i understand it might not carry more weight than the mighty CA but is it of any worth at all ?

    Thanks a lot.

    • says

      He didn’t mention it when we spoke, so I’m not sure how highly valued it is. I’m sure companies would understand it, but the CA is probably better-known overall.

      If you already have the CA it might be worth looking at the CMA, but otherwise if you have limited time and can only do one the CA is probably a better bet initially.

    • says

      Yeah it really varies by region. The interviewee last year mentioned that where he worked (Nordic region) was much smaller than the financial centers in Europe as well.

  7. Abhi says

    Any thoughts if experience in the Transfer Pricing Group (TPG) in a Big 4 firm can be leveraged to get into IB? My understanding is that even though TPG technically lies in their tax practices, it essentially focuses on valuing assets.

    • M&I - Nicole says

      I wouldn’t say IB, though you can leverage your experience from TPG and work for PE firms – help them save taxes. This is a problem many PE firms are facing (though this may not be widely publicized), and TPG is a relatively big issue, at least in Hong Kong.

  8. Micheal says

    Hey Brian,
    I have internship offers for BIG 4 TS and for a M&A boutique (30 employees, 3 locations, 40 international partner boutiques). It is for an internship in Europe (I am European) plus I have no previous finance internships.
    Would you definitely prefer the boutique despite the fact that Big 4 is better known and I will also gather transaction experience there?
    Thanks in advance!

    • M&I - Nicole says

      Yes I’d prefer the boutique if you want to be exposed to investment banking work unless the boutique is not credible at all

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