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.”
Got “stuck” in accounting or auditing and now you want to break into investment banking?
I recently discussed this exact topic with a reader 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.
- Consultants: You can deal with crazy people and work long hours, but can you count? Do you know how to use Excel without the mouse?
- Liberal Arts Majors: You can communicate, but can you crunch numbers and burn the midnight oil?
- Engineers: You can stare at computer monitors without sleeping for days at a time, but can you talk to people? Are you really interested in finance?
- Lawyers: You can deal with psychotic people and work until you bleed, even tracking your time in 6-minute increments, but do you know how to value a company? And give up your career?
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 a hedge fund, 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 Investment Banking Networking Toolkit, 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.
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.
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.
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
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.
Series: Career Transitions
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