Breaking and Entering Into Investment Banking As an Accountant
“It’s tax time. I know this because I’m staring at documents that make no sense to me, no matter how many beers I drink.”
-Dave Barry
Got “stuck” in accounting or auditing and now you want to break into investment banking?
I discussed this exact topic with a reader recently – as one of the bonus consultations for the Networking Ninja Toolkit 2.0 – and covered what to do.
So here’s your step-by-step plan:
What You’re Up Against
Think of every recruiting effort as a battle. Depending on your background, you’ll have some advantages and some disadvantages over the enemy.
Engineers: Good at math, but can they talk to people? Do they know how to dress? Buy bottles?
Lawyers: Can work long hours and deal with annoying clients all day, but can they count?
If you’re coming from an accounting or auditing background, here’s your challenge:
“I know that you know accounting inside and out, and that you’re an Excel wiz. But are you motivated enough to work 100 hours a week? Why didn’t you do investment banking from the start if you’re really interested in it?”
So you need to have good answers to those 2 questions, because they’ll be the key “objections” that any banker speaking with you will have (keep reading for suggested answers).
In Your Favor
On the other hand, you do have some things in your favor:
- They know you know how to “count” because accountants are pretty good at that.
- You “get” what any professional services business is all about – doing menial work for annoying and high-maintenance clients and changing periods and decimal places in documents.
- You may have better access to networking opportunities, depending on what firm you’re at and what group you’re in.
Telling Your Story
Before you even start recruiting, you need to lock this one down.
You want to use a variation of the following answer:
“I was really interested in accounting and finance all throughout school, and the opportunity to work at [FIRM NAME] just fell into my lap. I liked the [exposure to clients / culture / group], so I took the offer and have done very well over the past year there. But during that time, I’ve gotten increasingly interested in investment banking, because I’ve [been exposed via clients / heard a lot about it from friends / met bankers at such-and-such event]. I’m eager to move into something faster-paced that lets me actually work on transactions instead of just handling the paper-work and fact-checking afterward.”
You might expand on that (interviews) or shorten it (networking) depending on the context, but that’s the basic sketch you want to use.
Similar to any “Why investment banking?” question, specific events or people are almost a requirement. So if you had a revelation one morning after going to an alternative investments conference and meeting the top brass at SAC, make that part of your story.
Bankers love to think they are important and lead interesting lives, so play on their egos and emphasize how fast-paced it is and how you would get more responsibility / meaningful work.
Networking Ninja Tactics
Once you figure out what you’re going to say, you need to figure out who you’ll say it to.
Even if you’re working full-time, networking is not much different from what MBA/university students do: you still use alumni, referrals, and possibly cold-calling depending on what you’re aiming for.
The difference is that you’ll have a lot more co-workers, former co-workers, and clients/former clients that you can use for networking purposes.
You do have to use discretion, but all of these sources give you a big advantage over students who need to network to get in.
Unless you have amazing connections at bulge bracket banks, don’t waste your time applying there. Go for boutiques, middle-market firms, and any group where in-depth accounting knowledge might come in handy: Financial Institutions / Restructuring – you bet. Technology – not so much.
If you truly have no alumni connections, no professional referrals you can use, and no other links to finance, then you’ll need to get them.
Join professional societies, go to conferences, and look up events on nearby campuses if you want to start building these connections.
Otherwise you’ll need to do a lot of cold-calling, which is covered in this podcast, in this video, this case study, these case studies, The Networking Ninja Toolkit 2.0, and probably other places I’m forgetting about right now.
Transaction Advisory Services
Networking is great, but there’s another method available to accountants as well: get into the Transaction Advisory Services (TAS) group at your firm.
Not all accounting firms have these, but the Big 4 and some smaller companies certainly do.
In the TAS group you work with bankers and client companies on transactions, assisting with valuation, due diligence, and sometimes effectively acting as the M&A advisor on the deal.
This helps you in two ways:
- Your work looks much closer to banking.
- You get better access to contacts in finance.
Do you transfer to TAS first, or do you try to move into investment banking from another group first?
If it will take 1 year+ to transfer, test the waters right now and see what response you get from banks.
But if you can do it more quickly than that, make the transfer first and then think about banking after you’ve been there for awhile.
Spinning Your Resume
So now you have your story down and you’re in the midst of networking and working the phones.
Almost everyone will ask for your resume, so you need to get that right.
The number one mistake you can make as an accountant is writing too much about accounting and not enough about finance.
If you start going into details on general ledgers, journal entries, SOX controls, and other accounting topics, any banker looking at it will think, “Ok, he’s accountant material. PASS.”
Instead, you need to spin what you did to make it seem more relevant to finance.
Use the “Experienced” template here and make every client into a “Project” entry on your resume – but remember that you are applying for finance jobs, not accounting jobs.
- “Performed Sarbanes-Oxley testing and found that client’s controls were sufficient; reviewed journal entries and determined that client’s reserves were appropriate, which allowed them to project prices of raw materials for upcoming construction project.”
This would sound much better if you titled the entry “Raw Material Price Prediction Model” rather than “SOX Testing” and wrote:
- “Worked with client to develop Excel model that allowed them to project prices of raw materials based on previous historical patterns and proven reserves; client later used this as supplement to financial statements and in own internal projections to validate potential return on new construction project.”
In this case, we’ve shifted the focus to a very, very small part of what you did – this Excel model – and removed the parts that sound too much like accounting.
Think about which projects can be spun into sounding finance-related, pick those, and then focus on the relevant parts and cut anything that doesn’t sound banking-related.
In Interviews
Most interviews will be focused on the “Are you motivated enough to work 100 hours a week rather than 60?” and the “Why didn’t you get into finance earlier?” questions.
For the first one, you need specific stories of when you’ve burned the midnight oil over an extended period in the past. Examples:
- Talk about how busy you get during tax season and how the hours and client demands spike up.
- Talk about commitments outside work and how those also take up a lot of time and effort, which requires you to juggle a lot all at once.
- Talk about any projects / commitments from university (it’s better to go more recent if you can).
For the “Why now?” question you should pretend that you weren’t fully aware of all the options early on, and only became truly interested in the past year (see the story outline above).
Much of your effectiveness is determined by your body language and expressions in the interview – if you don’t seem enthusiastic and energetic, they’ll assume that you’re not.
Technical Questions
Everything’s fair game here – since you have an accounting background, they’ll assume that you know more than an engineer or lawyer trying to move into the field.
So learn financial modeling, review all your technical interview questions, and make sure you can walk through the basics in your sleep.
You may also get more advanced questions on accounting and tax-related questions.
I would be shocked if they asked a student something like, “What’s the flaw with using book values of assets when determining the goodwill allocation in an asset purchase vs. a stock purchase?” or “Here are values for the 20 different items in this purchase price allocation – walk me through the resulting Book vs. Cash Tax Schedule and how the corresponding Balance Sheet items change in future years.”
Most full-time bankers don’t even have the technical knowledge to answer those questions, but you could easily run into these topics if you have a more technically-adept interviewer.
Plan B Options
If you don’t get great responses when networking, you don’t get interviews, or you don’t get any offers, what do you do next?
1. Move to the Transaction Advisory Services Group
It’s still easier than getting into a top business school. If you’re in a situation where it will take a year or more to transfer, still consider doing it if all your other efforts have failed.
Also think about moving to another firm if it’s too difficult to move internally – some large companies are resistant to change.
2. Business School
No, business school is still not a magic bullet – but it will give you a big boost in terms of networking and access to recruiters.
If you go this route, I strongly recommend doing some kind of pre-MBA opportunity, or even taking time off before and doing an informal internship.
While they’re normally reluctant to let you do this if you have full-time work experience, they’ll be more open to it if you explain that you’re going back to business school and want to do something in the interim.
3. Keep At It
One common networking question is “When do I give up?”
I would give it at least 6-9 months before you throw in the towel.
In a down economy it will often take a year or more to find anything – so you can’t get discouraged by rejections. Networking is a numbers game past a certain point.
Just look at Rocky: he got rejected 1,500 times before claiming victory.
So unless you’ve gotten at least 150 rejections, don’t even think about quitting.
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Tags: clients, investment banking, investment banking interviews, investment banking resume, MBA, telling your story, understanding investment banking
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I like working with ex-accountants and ex-lawyers. They have something to add to ibanking. I spent a lot of time with an ex-Deloitte accountant whenever I could, asking about nitty gritty accounting things that only accountants would know. All ex-lawyers turned ibankers seemed very smart, and usually was better than regular ol’bankers.
Ex-consultants added not much value… haha Brian, I had to bash them again.
Agree. Ex-consultants are the worst…
No…even after 150 rejections, 1,500 rejections, or 15,000 rejections, you keep going. Persistence is the key to everything.
I think there are probably fewer than 15,000 investment bankers in the US, but otherwise I’d agree with you.
I had an IB internship (not NYC) this summer but am not getting FT offers so far. I’m thinking about starting at somewhere small and then trying to lateral to a ‘better’ firm in NYC after a year.
I just came up with a new idea though: what if I found a small shop in Dubai and was able to work there for a year. When I start talking to people again about lateral opportunities I think I will seem like an interesting candidate if I started in Dubai, since it’s not very common. A) Do you think this would be effective in lateralling to a decent NYC firm? and B) Is it possible for an American with IB internship experience to cold email Dubai firms and get a job there?
It’s generally difficult to move from another region TO New York, because you need to go in-person to network, deal with time zone differences, etc. It’s possibly but it’s much easier to do the reverse most of the time.
Honestly I would cold-call rather than cold-email, but yes, in Dubai they like Americans and ex-pats quite a lot so you could pull it off.
Accountant here (non MBA, non-target 3.0 GPA). Given that IB usually leads to HF/PE, I am looking to bypass MBA & IB entirely in hopes of working at middle/back office at HF/PE. I know you mentioned this is DEATH at IB, but I hear that this is “easier” to do at HF/PE due to their less rigid cultures and bureaucracy compared to IB.
Also what are your thoughts of working at HF’s as an accountant in the Cayman Islands a couple of years if this will be my first real exposure to HF industry? What are my prospects of being able to lateral back to NYC or will I be stuck in the Caymans forever?? Thanks.
As I said above, it’s hard to move from somewhere else to NYC, but may be easier if you’re in “North America” (which I guess the Cayman Islands is, technically).
Honestly I still think it’s hard to move from back/middle-office to front-office, even at a small fund, but it’s still a bit easier than at a large bank. I would come in with lots of investment ideas and be an overachiever from day 1 if you want to pull it off.
Brian,
I’m interested in S&T in the long run. I accepted an offer with the ECM group of a top 3 BB (GS/MS/JPM) in their equity converts & derivatives group. Though from what I’ve heard, ECM people are usually “lifers”, my impression was that the equity converts group would be very technical, and might open some doors for me in the long run on the trading side. Do you know if my impression was correct or not?
-Ray
ECM may be closer to S&T than other areas of banking, but it’s still difficult to move in unless you have solid connections there. The earlier you make the move, the better.
Hey Brian,
You said in previous articles that most people go into hedge funds or private equity after banking and you said that the majority of them would be worse off if they did so. What other careers (in finance or management) should one consider after a few years of banking that offer better hours (50-70 is fine) and opportunity to progress to senior executive management positions?
Thanks!
I didn’t say you’d be “worse off,” I just pointed out that there are advantages and disadvantages to each one. My whole point is that there really are not many options in the traditional corporate world if you’re ambitious and want to move up quickly, aside from finance.
I’ve been working in NYC at in business valuation doing purchase price allocations (141s) and goodwill impairment (142) work…just wondering:
(1) what exit options do I have?
(2) how easy would it be to transition soon into banking? PE or hedge fund? Asset management?
(3) is it harder for me to get into harvard, wharton, stanford working for a Big 4 valuation group compared to a banker or consultant?
(4) if i were to transition into banking, would i esentially start out as a new analyst? Would pay be the same as new hires?
Thanks
1) Banking or maybe TAS would be the easiest options.
2) Banking and asset management would be easiest of those – PE and HF are tough without banking / transaction experience first.
3) Yes, but keep in mind that b-school admissions is highly dependent on what you’ve done outside of work.
4) Depends on the bank, but you would probably be at least a 2nd year analyst and pay would be higher. I doubt they would bring you in as an Associate.
Cool…thanks for those response – very helpful…I’ll start building the relationships I have made with bankers already and see what comes of it…I’m a little nervous that if I put my resume out there, the Big 4 firm I work with may learn I am looking into banking and will frown heavily upon it.
I would not worry about that
Dear Brian,
I am from Taiwan and love your website! I have had about 4 years of audit experience and am now considering the following three opportunities. Which one do you think works best if I want to break into PE/VC after MBA?
1) doing IPO or follow-on offerings at a regional security house;
2) doing valuation and business modeling at one of the Big4’s TAS division; or
3) being an institutional client advisor assistant at a big asset management firm.
Cheers,
MS
I would say #2 is best simply because #1 is not relevant for PE and #3 is relevant for neither IB nor PE
Hi I would really appreciate it if you tell me what your take is on BO finance (ie controller, planning&analysis, profit/loss, development, treasury etc), instead of big4 accounting?? I know you have strongly recommended against BO, but the advice seemed to be directed at ppl who wanted to eventually move to IBD.
I am someone who is less interested about big$$ or making PE/HF my profession. Rather, I am wanting to stay at a bank and become senior management, or senior managemnet in other industries. So my priority is acquiring good long term foundation and experience rather than $$. Do you think then finance will be a solid start? I would say the skills could be useful and transferable to any other company, because most coys have CFOs and finance divisions.
I interned at IBD, and I think the lifestyle is just too ridiculous. And other FO like S&T (too risky a profession) or Wealth management (too much quant) dont fit my interests or career progression. I still love the finance industry. So if I stay in a bank, finance is the only logical choice out of the divisions left, because ops or IT are definitely dead ends. Risk management could be another choice.
Finally, could finance give a good chance for bschool exit, if i realise finance is not for me ? Sorry for a long question. I just really respect and value your insight. Wanted to hear your advice on this.
BO finance is not completely useless, but if you want to do something like that I would suggest going to a normal company instead and doing some type of CFO/Finance-type role there. You could still get into business school from there but its definitely harder than from banking/consulting
Hey Brian..
Like many others, Love the site!! Amazing Amazing work!!
Now to my question, what according to you would be good exit options for someone who joined a Regulator fresh out of college and is nearing about 4 years in his current role supervising Financial Advisory firms and Fund Managers ? and am looking for options other than legal and compliance related roles.
Cheers
Go to the Finance division at a company, or consider boutique/middle-market banks – you could also consider moving to PWM or asset management since you’ve worked with fund managers before.
Hi Brain,
Love the site. Keep up the good work. I am a senior manager at a big 4 firm in Houston and I am desperate to transition into PE. For a person at my level, what is the best route? I keep thinking TS at another big 4 but that group is not doing so well right now especially at my firm. Is this really the best way to go? What are my other options?
At your level making the transition directly is tough – I’d still say that TAS is your best bet, because getting into PE with 0 transaction experience is almost impossible. You could also try going to boutique banks and using that experience to get in, but they may not take you on if you already have a lot of experience. Business school is possible, but it’s hard to move into PE from there unless you’ve done banking beforehand.
Hi Brian,
You say that MBA is a great route used primarily for networking and recruiters. Assuming one is working as an Auditor at Financial Services Group (Banking or Alternative Asset Management) of Big 4 where one has great networking opportunities, would you say that this would override the need for further networking web from MBA which comes with a much heftier price?
I just don’t see the need for an MBA if it’s primary value is networking, when I am dealing with large BB as clients and I can try to schmooze in that way. One can argue “finance education,” but that’s already been disproved (banking is not rocket science), therefore as a Senior Associate auditor getting exposed to large banks, it seems like MBA is not worth it, since I can just schmooze via my current network. Thanks again.
More than just networking, an MBA from a top school gives you DIRECT access to recruiters. As in, you submit your form online, and then you get interviews at bulge bracket banks.
That’s the real value of doing it – networking is certainly helpful, but automatically getting looked at by banks is even better.
Brian,
Great site. I’m a junior at a BB target school. I took a Big 4 audit internship in the fall for this coming summer and am starting to think I should have held out for i-banking interviews. What’s my best option for getting a full-time at a bank? It sounds like you may recommend switching to TAS. How will a summer audit internship look to BB during full-time applications?
TAS is definitely your best bet. Summer audit internship is ok, but you’ll be at a disadvantage vs. anyone who did finance.