Degrees and Certifications: Got CFA + JD + MBA + MD?
Despite my best efforts to bash certifications and give snarky responses to related questions, there’s still confusion on what banks care about, what you can do with different degrees, and the meaning of life.
While I can’t help with the meaning of life (42?), I can tell you which degrees and certifications mean something and help you break into finance – and which will not.
Why the Hate? You’re Already Biased!
I’ve seen lots of aspiring bankers use degrees and certifications as a distraction from more important goals, like getting solid internships, networking, and even getting leadership roles in groups.
You may also think that degrees and certifications are a magic bullet: sure, you have a 2.1 GPA from an unknown school and you’ve worked in telemarketing for 5 years, but if you get that Bloomberg certification, Goldman Sachs will give you an offer right away, right?
Maybe I should get into the business of selling certifications with logic like this…
Definitions: Investment Banking / Private Equity vs. Other Fields
The usefulness of degrees and certifications varies widely by the field of finance you’re interested in.
For example, if you want to be in risk management then the FRM exam is essential; if you’re doing portfolio management or equity research, the CFA is viewed as a requirement. And bankers, of course, don’t care about either of those.
I’m focusing on investment banking and private equity here because that’s what this site is about and what you’re interested in if you’re reading this right now.
For more on other fields and where certifications might be useful, check out these articles from Bionic Turtle:
5 Degrees Above Zero
Let’s start with degrees since they’re less painful to write about.
The only degrees that banks care about are Bachelor’s, Master’s, and MBA degrees, and only for very specific reasons.
But just for fun, let’s jump through the entire list and learn why – and what to do if you’ve taken the plunge into JD/PhD/MD land.
High School / Secondary School
Please, no more questions from 16-year olds who want to get an investment banking internship. Go outside and play in the sun, you’re probably Vitamin D-deficient anyway.
This one is just a check-the-box requirement at banks, and if you’ve only graduated high school you won’t be able to do anything real – you need at least an undergraduate degree (maybe you could work as an assistant but is that what you want to do?).
Your actual performance in secondary school matters more in countries like the UK where A-Levels are huge – in the US, listing high school grades or AP scores on your resume when applying to banking jobs is silly. And where you went to school only matters if it’s somewhere prestigious, like Exeter or Andover, where you might get some networking benefit.
This is the bare minimum you’ll need to actually work at an investment bank, and most other finance firms.
Every week I get comments asking, “I’m 38 and never graduated from college – do you think I can become an investment banking analyst?”
No, you can’t.
- Supply and Demand – Banks have so many university graduates who’d give up a kidney to work for them that they can afford to reject 99% of applicants and still have more people than they know what to do with.
- Work Ethic – If you can’t finish a university degree then banks will assume that you cannot finish any project, which is a problem when you have a 100-page pitch book due in 3 hours.
Yes, I know there are good reasons you didn’t get a degree – you dropped out to start your own multi-billion dollar company, you couldn’t afford college, or you became a pop star and you’re still on leave.
That’s lovely, but life is not fair and if you don’t have a degree you’re not getting into investment banking or private equity.
Maybe you could trade for a small prop trading firm if you’re a baller trader without a degree, but even there it’s tough – they care less about pedigree than banks, but everyone else there will have the degree.
It’s approximately 100x more difficult to get into banking coming from a “non-target” school (one where banks don’t recruit) compared to a “target” school (the Ivy League, LSE, Oxbridge, and so on), so go to the best school possible.
What you major in doesn’t matter too much as long as you get decent grades and internships, but you can review your options right here.
- You need the prestige because your undergraduate school was unknown.
- You had poor grades and need to press Ctrl + Z on your transcript.
- You didn’t get an offer and want to try again, with better access to recruiters.
- You’re in Europe and 5-year programs that include both the Bachelor’s and Master’s degree are common.
The most common question on Master’s degrees:
“So, if I go for a Master’s in Finance program I can start as an Associate, right?”
No, you can’t, because:
- You would need at least 3-5 years of previous work experience or 2 years as an IB analyst first.
- Master’s programs are less of a time and money commitment compared to MBA programs.
I must have heard this question 500 times at career fairs and the answer is always the same: “You’ll still be an Analyst.”
This is the only advanced degree that allows you to “level-up” when you start working.
IF you have had enough experience (usually 3-5 years in a normal industry, or 2 years as a former IB analyst), then you’ll start out one rung above the Analyst: you’ll be an Associate instead.
Which means you get paid a bit more, have more responsibility, and you get to sleep 6 hours per night instead of 4.
But do not assume that just because you get an MBA, banks will automatically interview you or think that you can be an Associate.
There are plenty of ways to screw it up, including going to a non-top-tier school, not having enough work experience, or not showing a clear progression toward being interested in banking.
While Damages the TV series is awesome, most law firms are not even close to that interesting in real life: the Partners at your firm might be sadistic, but they’re still far from Patty Hewes.
So many lawyers get the bright idea that they could go into finance instead and make bank while abusing their former co-workers.
Just one small problem: banks don’t give a crap about law school.
OK, that’s not 100% true and it’s viewed a little more favorably than the MD or PhD – but there’s no added bonus for going to law school and it’s a much more indirect path to banking.
You have to graduate from law school, work in corporate law for a few years without going insane, and then network your way into banking from there.
Having the law background may benefit you in areas like Restructuring and Distressed Investing where there’s legal overlap, but it’s a stretch to say that you should go to law school specifically to get into those fields.
If you’ve already taken the plunge, you can’t exactly abort midway through – so finish, do corporate or securities law, and then network into banking after working for a few years.
You may actually start as an Associate if you do law school and then corporate law before banking, so the JD can be another way to level-up.
If you thought bankers looked down on lawyers, you’ve never seen their reaction to PhDs – ouch.
You might be the next Stephen Hawking, but that doesn’t matter because you don’t need to understand wormholes to be a banker – you just need to understand how to change the font size in pitch books.
Most bankers think that PhDs are too well-educated to go back to fixing printers and scouring through SEC filings, so there’s a significant bias against hiring them.
Sometimes you can still get into finance if you have the degree, but usually you have to:
- Target a boutique that fits your background exactly – like an industrials-focused firm if you have a PhD in materials engineering, or a healthcare-focused firm if you completed an advanced degree in biochemistry.
- Go for equity research instead. They actually care about the degree because they want people who understand an industry in-depth – again, you would focus on groups that match your background.
- Go the quant route (works best with physics/math/related degrees). Sure, trading will never be what it once was, but firms always need quants and smart math people to build their models.
You face a similar problem here: you’re over-educated and banks will assume that you have no interest in spreading comps if you’ve qualified to perform open heart surgery.
They may also assume that you’re unable to commit to anything and stick with it: how could you have made it through years of med school without realizing you wanted to do business earlier?
In this situation you’d have to follow the PhD advice above and go after boutique banks in the healthcare/biotech/pharmaceutical space and/or look into equity research. You don’t have the ideal background to be a quant, so that’s not the best idea here.
You’ll also need a really good story about why you’re making this move – not just “I realized business was so much cooler!”
You need a specific incident or person that made you interested, and a perfect explanation of how you realized that medicine was not for you after years of doing it, but how you’re simultaneously certain that finance is for you with 0 years of experience.
Combo Degrees – JD + MBA?
Combo degrees get another “thumbs down” from me.
We already learned that adding a Master’s degree on top of a normal bachelor’s degree, for example, won’t let you start as an Associate.
But what about that famed JD + MBA combination – surely that must open up more exit opportunities, right?
No, not really. Most jobs are geared toward law or finance, but not both.
It would be most useful in areas like Restructuring, Distressed Investing, or arguably Real Estate / Project Finance where there’s overlap with the law and legal codes.
But even there, it’s a stretch to say that the JD would add much: even the MBA might not be terribly helpful if you’ve had previous, relevant experience.
You may also face a branding problem if you have a law degree and a business degree: business people will think you’re a lawyer, and lawyers will think you’re in business.
There’s always a temptation to think that more = better when it comes to degrees or certifications, but that’s just not true.
You want the minimum investment required for maximal gain – anything more than that reduces your ROI.
What about other combinations like JD + PhD + MBA, or JD + MD + MBA? Please, don’t even waste your time and money – it’s just silly.
Adding more advanced degrees like this will hurt you and make you look like more and more of an academic and less and less like someone who can actually make money in the real world.
This part will be shorter because certifications matter far less in banking and PE than degrees.
The main one that generates debate is the CFA and whether or not it’s helpful for breaking in – others are either completely useless or marginally helpful at best.
Series 7 / 63 / 65 / 66 / 79 / 84563X2
If you have a ton of free time, you’ve already networked extensively, and you already have great internships and/or a full-time job lined up, then sure, knock yourself out.
Just be aware that if your bank requires them, you’ll complete the exams during training anyway.
If you really want to set yourself apart before you start working, you’d be better off moving to another country for a few months and doing something interesting there.
I’m not going to rehash all the arguments for and against the CFA here – go consult this article if you want to go down that path again.
The short version is that it’s not the best use of your time for investment banking or private equity in developed countries, but it may be more useful in emerging markets or in fields like equity research, portfolio management, or some types of hedge funds.
And do not think that it will cover up an unknown school, low grades, or no work experience – it won’t.
Think of it as an added bonus and something to look into if you already have top schools, high grades, and great work experience.
CPA / FRM / Other Certifications with C and F in the Names
Look, if you want to be an accountant or a risk manager or perhaps other things outside of IB/PE, then sure, go ahead and pursue these.
There’s an alphabet soup of other certifications out there, and David from Bionic Turtle does a great job of summarizing them here.
There’s nothing wrong with any of these – it’s just that they will not help you much with IB/PE, because getting in is based almost entirely on practical experience.
In the future, who knows, there may be an exam to get “certified” in investment banking – but for now no one takes anything like that seriously (yes, I’m talking to you, “Certified M&A Advisor”).
There’s another critical reason why such certifications don’t apply to IB and PE: at the top levels these fields are based on sales, relationships, and negotiation skills – skills that can’t be tested on a written exam.
Bloomberg / FactSet / Other
Don’t even bother – you’ll learn everything you need to know (which is not much) when you start working, and you don’t even use the complex features in banking.
These may actually hurt you because you do not want to be known as “The Bloomberg Guy” or “The VBA Guy” or anything else that results in annoying requests to fix other peoples’ broken-beyond-repair spreadsheets.
Standardized Tests: SAT, GMAT, GRE, A-Levels…
These aren’t quite “certifications” but why not throw them in here anyway?
None of these is as important as grades in university, but in the US most banks will still ask for your SAT scores, and GMAT scores can be helpful if you have low SAT scores (under 2100 in the new system). No, don’t bother going back and re-taking them if they’re low: not worth the effort.
As with grades, these tests are more about whether or not you meet the minimum score they’re looking for rather than “standing out” – so please do not re-take the GMAT if you got a 720.
Got Degrees or Certifications?
I hope not – unless you mean a university, Master’s, or MBA degree.
Otherwise, save your time and money and if you’re already too far down a path to turn back now, cut your losses and change direction as soon as you can.
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Investment Banking: Pakistan Edition
But this is such a good interview and has such specific information that I wanted to publish it anyway.
Plus, the interviewee has been a long-time reader of M&I and captured the personality of the site very well. So let’s get started and learn all about banking, PE, recruiting, and the lifestyle in an emerging market that might be completely off your radar.
Q: Can you tell us about your background?
A: I play the drums. I love buffalo wings with sour cream and ginger ale. I love stargazing. I’m a huge Tolkien fan. I find jazz very relaxing. I just discovered a hidden passion for photography and hopefully I’ll be traveling to Iceland in a few months after I buy a Canon DSLR.
I was born in Abu Dhabi and raised in Dubai. My father retired from his marketing job and we moved to Islamabad (Pakistan’s capital), where I completed high school and undergrad. I was a very distracted student during my O/A Levels because I really didn’t know why I was studying and what I wanted to do, so I definitely lacked direction for a time.
But during the first year of my undergraduate, I got really interested in corporate finance and M&A – so I actually performed decently and did much better than in high school.
After graduating, I networked my way into an investment banking analyst position at a bulge bracket bank in Karachi (Pakistan’s finance capital), and then I moved into private equity in the same city.
Q: Most Westerners know very little about Pakistan aside from what’s reported (accurately or inaccurately) in the news. What is the country really like, and how is the finance industry there different? Are the rumors of economic collapse / bankruptcy true?
A: A recent Newsweek cover described Pakistan as “The World’s Bravest Nation” – after describing it 3 years earlier as “The World’s Most Dangerous Nation.” I know the general perception is that it’s a country filled with corruption, religious fundamentalism, and no roads or women.
There is an element of truth to those claims, but for the most part we’re just regular people and most of what you read about in the news corresponds to a very small part of the country.
So don’t believe everything you read about the claims above (especially the part on roads and women) or the frequent accusations of terrorism – there are isolated extremists here but they are not representative of Pakistan at large.
Economically, we were always an underdeveloped country due to corruption from previous governments – but during Musharraf’s 10-year rule we were elevated to “developing country”status. Since that time the rulers have been questionable, so the progress has been disappointing since then.
The rumors of economic collapse are untrue. We’re not in the best shape right now, but we’re far from bankruptcy – the US and its allies also have too much of a stake in the country to let a bankruptcy happen. And we’re part of an IMF program that has pledged billions to us over the next 3-4 years.
Overall finance is still very much in a growth phase here, and private equity is at a nascent stage; Islamic finance is developing rapidly and corporate finance is also thriving. Hedge funds don’t exist yet, but many banks do have investment banking divisions and a handful of research and brokerage houses here offer investment banking and related services.
Q: What’s different about recruiting there? Do they prefer certain backgrounds or certifications?
A: The recruiting process for both IB and PE is highly unstructured.
Unlike the US or Europe where certain “paths” are preferred, here you can transition from almost any finance-related field into IB or PE.
I know people who have gotten into investment banking from industry, management consulting, and research, and people who have gotten into PE from Transaction Advisory Services, research, middle office trading support roles, and corporate banking.
My VP (from the US) would always tell this analyst at my bank that the CFA was completely useless in banking, but in Pakistan people have been conditioned into believing that a CFA + an accounting degree is the key to achieving unprecedented glory.
Wheeling & Dealing
Q: You were at a bulge bracket bank there – do the other global bulge bracket banks have presences in Pakistan, or are local firms more common?
A: It’s a mix of both. JP Morgan has been here since the early 90’s, Citi even earlier than that, and Credit Suisse has been here since 2008. UBS and BoAML operate through local affiliates, but aren’t officially here.
Even though they’re bulge bracket banks, they usually work on deals worth around $100 million USD – sizable for here but small by US standards.
M&I Note: Middle market banks in the US would do deals of this size; most bulge brackets focus on $500M+ or $1B+ deals, though they do occasionally go lower depending on the market.
Since that’s “the bar” for bulge bracket banks, smaller, local firms – called “investment houses” – advise on deals worth less than $100 million USD.
They offer everything from research to mutual funds to M&A advisory and capital raising. Two of the largest investment houses also have consumer and corporate banking divisions that they use for syndications.
Pure-play boutique investment banks are still very rare here – off the top of my head I know of just one firm that offers only M&A advisory and restructuring services to clients.
Q: What types of deals and companies are most common in Pakistan?
A: The breakout for deal types is something like this:
- Debt Financing: 70%
- IPOs: 15%
- M&A: 10%
- Restructuring: 5%
M&A is most common in the banking and telecom sectors. Here’s a table of M&A activity from 2002 – 2010 that I’ve been updating from time to time:
M&A in Pakistan rarely takes place to create value – this consolidation in the banking sector is driven by regulatory requirements (specifically higher capital adequacy requirements).
The actual rationale for M&A activity would be more interesting to look at – in my opinion it’s something like the following:
- Regulatory: 65%
- Gain Market Share: 20%
- Divesting Operations or Exiting from Pakistan: 10%
- Private Equity Investment: 5%
- Value Creation: 0%
The government also has a massive privatization program in place (the numbers above exclude this, by the way) and so all the bulge brackets submit RFPs (Requests for Proposals) to the Privatization Commission for each deal.
Even some banks like Goldman Sachs, Morgan Stanley, and UBS that don’t have a direct presence in Pakistan will fly in, submit their RFPs, pitch, and fly out – they’re known as “parachute bankers.”
Some local firms also work on these privatization transactions, while the bulge bracket banks focus more on attracting institutional investors via road shows or finding international buyers for assets that the government is divesting.
Here are lists of completed and upcoming privatization transactions in Pakistan:
Q: You mentioned how you networked into investment banking and then into private equity – how is it different in Pakistan? Do informational interviews and cold calls still work?
A: Right, so just to give you a brief overview first of how I networked my way in:
I went to a non-target school, but I did have 5 internships and decent extracurricular activities, as well as the resume template on your site. And I knew a lot about investment banking and private equity and kept up with global M&A deals and private equity activity via the NY Times Dealbook site.
A year before my graduation, I cold-called the bulge bracket bank I worked at – they’re known for only hiring summer interns from top US and UK schools, so it was a bold move.
A man picked up and I asked to speak to someone regarding summer internship opportunities in investment banking – the guy replied with, “I’m the guy” and he turned out to be my future VP.
I asked about the recruiting process for summer internships and he said they had already gotten started with interviews – but to email my resume anyway so he could send it to the team.
I did that, and about an hour later he replied and said, “When will you be able to join us for an internship?”
Q: Wait a minute, so you actually got an internship just by cold-calling a bulge bracket and asking for one?
A: Far from it, though that’s what I actually thought at the time – I didn’t even get an interview. I think he was just asking that to see when I would be free for an internship rather than actually giving me one on the spot.
He said they really liked my resume but were looking for a winter intern, which didn’t work for me timing-wise due to classes.
Over the next 5-6 months, I stayed in touch, emailed him on his birthday a la Bud Fox, added him on LinkedIn, and even sent the occasional random link.
Q: So you actually pinged him consistently – that’s interesting because I usually tell readers NOT to worry about constantly staying in touch and to focus more on making a good first impression and then asking for what they want when the time comes.
A: Right – you do have to be subtle if you want to take this approach. I didn’t want to give the impression that I was stalking him or wanted to be his best friend.
I did this more because I had an uphill battle given my school and background, and because there just aren’t as many banks in Pakistan – so it’s not like the US where you could easily go through hundreds or thousands of contacts to find the most helpful bankers.
Q: So what was the final outcome here?
A: In May I called him again, sent him my updated resume and “reiterated my interest” for an investment banking analyst position.
Despite being up against 100+ candidates from target schools, I was interviewed and offered the position.
What worked in my favor?
- I was myself and had the ability to laugh at myself – I didn’t act like some super-genius with perfect grades who claimed to know everything about finance.
- I had a burning desire to get into investment banking – I read everything and anything related to banking that I could find and this came across with how much I knew about the industry vs. the other candidates.
Q: What about your move into private equity? Did you go through a headhunter there or was that also networking?
A: Networking, once again. I cold-called my current PE firm’s Dubai office and spoke to a Partner there – we chatted about how Dubai has changed over the years and about the Middle East PE market in general.
I sent my resume, he forwarded it to the Partner in Karachi, and I interviewed a couple times and was offered the position.
M&I Note: This may seem ridiculous, but keep in mind that in certain parts of the world they are looking for very specific people and recruiting is less structured. It would be tough to pull off the scenario above in the US, but the same is not true in emerging markets.
Q: So it sounds like overall, the standard networking strategies still work and may even work better since recruiting is so unstructured in Pakistan.
You mentioned before how knowing so much about investment banking gave you a big advantage – but doesn’t everyone coming out of target schools there know the industry quite well?
A: No! A lot of students from top schools have absolutely no idea what investment banking or private equity are.
I’ve interviewed candidates from top schools here and this is how interviews often go:
- Me: What do you think investment bankers do?
- Interviewee: They make investments so that you get higher returns.
- Me: Higher returns… um, ok, and why do you want to get into investment banking?
- Interviewee: I’ve heard really good things about investment banking and [Interviewee inserts objective from his/her resume and “pitches” it] and how much I can learn there and bring my skills to the organization.
- Me: Right, we’ll let you know.
One time I had a PE candidate try to convince me that he was a “private equity investor” because he invested in the stock market.
I’ve come across only one candidate who made a convincing argument for why he/she should work in investment banking or private equity. And I’ve met hardly anyone else who has networked his/her way into IB or PE here like I did.
But as you can see from my story, it’s definitely possible – if you’re hungry and motivated, you can do pretty much anything.
Private Iniquity, Pay, and Exit Opps
Q: Not to sound like those annoying kids in Harold & Kumar, but what’s it like working for a PE firm there? What types of companies do you invest in, and is your job more about sourcing or execution?
A: Work is very unpredictable, which makes the hours unpredictable as well. I’ve pulled all-nighters, and I’ve found that there is a massive cultural difference / work ethic difference between local firms and international firms.
PE firms here do not focus on specific sectors – they’ll invest in anything from green/brownfield projects to mature companies and even distressed assets.
LBOs are highly uncommon here and so most of these investments are minority stake acquisitions instead.
Work is a function of sourcing and execution – I’d say I spend 20% of my time on sourcing (looking for new investments) and 80% on execution (doing due diligence, modeling for investments, and coordinating our team).
Q: As with other emerging markets, I’m assuming that salaries and bonuses are lower on an absolute scale but higher on a relative basis if you take into account the cost of living – is that accurate?
A: Yes, definitely true. In a good year, an analyst at a local firm can make 10 to 15 times his monthly pay with his bonus (around 80% to 125% of his annual pay).
In average years an analyst’s bonus might be around 50% of his annual pay – which is quite a lot of money in Pakistan.
Q: And are your co-workers all from Pakistan or are you starting to see immigrants there as well?
A: Right now there are hardly any immigrants – it’s 99.9% Pakistani co-workers.
Q: What are your future plans?
A: I’m planning to attend business school in 2 years, ideally at Wharton. I do want to stay in PE, and post-MBA I’d want to go to a larger firm in the US and work there for a few years before returning to the Middle East or Pakistan. If all goes well, I might start my own buyout fund here one day.
I also want to take up stellar and extragalactic astronomy – it has always fascinated me. And if I have enough capital, I want to start a theme-based restaurant at some point.
Or I could just take the CFA…
Q: Please, don’t.
A: Yeah, I think my own restaurant would be more fun anyway.
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How to Break Into Finance as a Consultant
I’m not gonna lie: I haven’t treated consultants very well before – and even though that infamous Leveraged Sellout video is ancient history by now, it still pops into my head whenever I get questions from consultants.
But despite that, I still do get lots of questions from consultants on how to move into the world of finance, mostly to investment banks and private equity firms.
In some ways, you’re in a better position than engineers, lawyers, or accountants trying to break in – but the bad news is that a lot of bankers don’t like consultants.
So here’s what you do to get around that and break into finance:
What You’re Up Against
Just to recap what you’re up against vs. other professions moving into finance:
- Engineers: They are great at math, but can they talk to people and work a lot more than they would at Google or Facebook?
- Lawyers: They can put up with sociopaths and work 100 hours per week, but can they count?
- Accountants: They know accounting and Excel, but are they hungry enough to work without sleep for days at a time?
- Liberal Arts Majors: They can communicate, but can they crunch numbers and burn the midnight oil?
As a consultant, here’s your challenge:
“I know you can work with clients and that you understand the business world. But can you build an LBO model? Do you have any discernable skills? And are you prepared to work true banker hours?”
So it’s a combination of what lawyers and accountants face, with some extra prejudice thrown in since many bankers don’t take consultants seriously – especially if you’re an IT or HR consultant rather than a management consultant.
What Will Help You
But you do have a few things working in your favor:
- You “get it” – you’re not some engineer with no business experience who doesn’t understand how to work with and manage clients.
- If you’re working at a top firm (MBB), you have a prestigious name that all bankers recognize.
- Better networking opportunities than an undergraduate – Partners are well-connected, and your clients might be investment banks.
Just take the story-telling tutorial and template here and apply it to your own situation.
Here’s a sketch of what you might say:
“I was really interested in business and advising companies on major strategic decisions, so after graduating from [University / Business School Name], I decided to take an offer at [Consulting Firm]. I’ve done well there and have gotten good reviews, but I also realized that what I did as a consultant was rarely implemented by clients.
I had worked on a few M&A and due diligence-related projects, and realized that in [investment banking / private equity] you have much more of an impact on the company you’re working with – and I was more interested in modeling and valuation than in qualitative work.”
That is just a sketch of the basic idea – you would expand on that in interviews.
If you’re moving in from something less business-related – like IT or HR consulting – then you should also include something about wanting to see the trees for the forest and understand the business at a much higher level.
Point to specific clients or cases you worked on and the finance-related analysis you did that made you more interested in finance.
“I worked with a $50B telecom company in its restructuring process and learned about what management considers when it decides to declare bankruptcy rather than restructure its debt – and I got to assist bankers with analyzing the best debt structure going forward” sounds much better than just saying you think financial modeling is cool.
And before you mention it, yes, I know that common stereotype of consultants’ advice not being implemented is not necessarily true.
Plenty of work you do as a banker never sees the light of day, either, and it’s even worse in PE.
But what matters here is perception, not reality – and financiers like to think of themselves as shaping industries and companies and “having a really significant impact” (even if they don’t get home by 7:15).
So you have your story… now how do you pound the pavement and make sure someone actually hears it?
The main differences lie on the sourcing side – where you find names in the first place:
- You have access to an additional “alumni” network – from your consulting firm. Leverage it and contact everyone who now works in finance.
- Partners at consulting firms are very well-connected and will know bankers. Don’t be shy about asking, especially since you’re expected to move elsewhere after working in (management) consulting.
- You could move to a finance-related group at your firm, or go to a banking or PE group that has overlap with your background (e.g. if you consulted with energy companies, you could target oil & gas groups).
Those 3 represent a big advantage over anyone else who’s moving into finance.
You could still cold call rather than using the strategies above, but don’t start there unless you are targeting boutiques and have absolutely no connections (unlikely).
Should you focus on boutiques rather than bulge brackets?
That may improve your odds, but it may not be necessary depending on how well-connected your firm is: if you can contact bulge bracket bankers, at least give that a shot.
Finance-Specific Consulting Firms?
Similar to industry-focused investment banks, there are also industry-focused consulting firms.
So it must help to go to a place like Oliver Wyman that is well-known for financial services consulting rather than a firm that does everything, right?
If you have the choice between 2 smaller or 2 specialized firms, yes, go for one that has the financial focus.
But don’t pick a finance-specific firm over McKinsey (or Bain, or BCG) just because you get to work with more finance companies – brand name makes far more of a difference if you’re breaking into banking or PE.
You have it easier with your resume/CV than an engineer because at least you’ve worked with clients before and can point to specific projects and “deals.”
Click here to download the “Experienced” resume template and view the tutorial, and then make the 3-4 most relevant clients you’ve worked with into separate “Project” entries.
Your main challenge will be spinning what you did into sounding relevant to finance:
- If you worked on anything related to due diligence, M&A, or capital markets, obviously list that and hype it up.
- If you don’t have anything directly related, take what you have and highlight the quantitative work you did rather than the qualitative side. Numbers and dollar/Euro/other currency figures are good.
- Even if you have not worked with financial statements, you can highlight market-sizing analysis, cost analysis, or anything that involves numbers.
If you write something like this:
- “Worked with Fortune 500 Company to analyze hiring and retention strategy for sales force and make recommendations that improved retention by 50% by better aligning incentives, target customers, and sales rep performance.”
That might be a good bullet for consulting jobs – you have a specific number and your recommendations were even implemented by the company.
But for finance you should write the following instead:
- “Worked with Fortune 500 Company to boost revenue and profitability by improving sales rep productivity and revenue per sales rep and by reducing G&A costs associated with sales force hiring; led to estimated [$xx] increase in revenue and [$xx] increase in pre-tax profit.”
You’re still writing about the same client engagement, but you’re framing it differently and focusing on finance rather than operations.
You probably won’t have exact numbers in this situation, so estimate and make it clear that it’s just an approximation.
Interview questions will focus on the key “objections” that bankers have to consultants:
So you need to address both of those and presenting solid “mini-stories” that prove your points.
For #1, talk about how busy you were due to the infamous consulting travel combined with client demands and how you had to pull banker hours for an extended period.
To prove you know something about finance, either talk about finance-related projects and analysis at work, or how learned on your own from classes, training programs, and self-study.
While I’m not a fan of the CFA, it would make sense to bring it up here if you’ve somehow had the time to complete it.
As a consultant, you may receive more technical questions than others because bankers will be skeptical of your financial know-how.
While the CFA is overkill and isn’t realistic given how much you work and travel, a crash-course on the technical side is not a bad idea.
You already know about the financial modeling training programs offered through this site, and I’m too lazy to insert a sales pitch here but you can read all about them on your own and decide what’s right for you.
You could also look at the books recommended on IBankingFAQ for a solid grounding in accounting, valuation, and finance.
Remember that you are competing with ex-bankers, undergraduate finance majors, and others who know the technical side very well – you don’t want to give banks a good reason not to hire you.
And For Private Equity…
I’ve been lumping banking and PE together, but there are a few differences if you’re focused on the consulting –> PE transition.
First, it’s very difficult because private equity firms recruit almost exclusively from the investment banking analyst pool.
So it might actually be easier to get into banking first and then make the move to PE.
If you don’t want to do that, you need to target firms that have a tradition of hiring consultants – the classic one is Golden Gate Capital, which was founded by Bain consultants and still hires mostly Bain consultants.
Focus on firms that emphasize operational improvement and turnaround strategies over financial engineering (actually easier to do in a recession or quasi-recession).
Your chances of getting into KKR, Blackstone, TPG, and so on, are slim because they only make a few hires each year and only hire those few from the top banks – the vast majority of bankers at Goldman Sachs, Morgan Stanley, and JP Morgan don’t even have a good chance of working at those places.
So target operationally-focused firms or anything with a complementary industry focus – if you worked with entertainment companies, maybe you can join Bono at Elevation Partners.
Venture capital is also a possibility – they care far less about financial knowledge than PE firms, and if you’ve worked with tech or biotech companies you can easily spin yourself into a “strong cultural fit.”
Hedge funds are more of a longshot because so many are about hardcore finance and don’t care about operations or strategy – if you want to go there, you’ll have to find one that is more strategy/operations/long-term investing-focused and less about short-term trading.
Plan B Options
So what if you’ve done everything above but still can’t break into finance?
1. Move to a Bigger Consulting Firm
Specifically, M/B/B – see Kevin’s thoughts below for more on this one, but generally the brand name makes far more of a difference than your actual industry focus as a consultant.
Plus, Partners at the top firms are more likely to know bankers and financiers than the ones at smaller firms.
2. Go to Business School
If you go this route, you’ll have a much better chance at post-MBA investment banking positions than PE ones: as interviewees on this site and I have mentioned before, your chances of getting into private equity without having been an IB analyst are slim.
And you should still do a pre-MBA internship that brings you closer to finance or you may not be able to re-brand yourself as easily as you expected.
3. Go to Something Other Than IB/PE/HF
There are plenty of other, less competitive finance industries out there (and yes, before you mention it, they also pay less).
So you could network your way into an asset management or commercial banking role, then get to know people in the investment banking division and move in like that.
This one is a better idea if you have no connections and have no other way in – otherwise you are better off staying a consultant rather than moving to a more finance-related but less “prestigious” role.
More Thoughts from Kevin
To get another perspective, I asked Kevin from Management Consulted for his thoughts on this topic and used some of what he mentioned above – here’s what he said in more detail:
- It’s all about brand name – get into the best consulting firm possible. While Oliver Wyman is marginally better than, let’s say, Kurt Salmon (boutique retail), M/B/B is far better than any of the rest in helping you get there.
- Most consulting firms have internal finance groups/sectors – get as many cases under your belt in these groups as possible.
- Most partners in those practices have serious connections – leverage those connections by over-delivering with your cases and networking heavily with partners.
- Ask for intros to the banks you’re targeting – they might be your clients and you can build relationships first that way.
- Go to NYC. Just like entrepreneurs move to Silicon Valley, you must be in NYC to have access and credibility. In Europe, go to London. In Asia, go to HK.
- It’s all about your network and less about financial knowledge, at least in terms of getting interviews in the first place – organize internal networking events in the finance practice to meet even more people.
- A lot of consulting firms have externships and special programs to give you corporate exposure outside of strategy consulting. Leverage those as much as possible.
So there you have it – thoughts from someone who knows consulting inside and out.
Still Can’t Buy Bottles with Starwood Points?
So if you’re tired of flying up to Saskatchewan every week to tell a company what it already knows, follow everything above.
And you just might be able to get rid of those Starwood points and buy a few bottles with your banker friends.
Series: Career Transitions
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