From Sales & Trading to Investment Banking: How to Hop Over the Fence
One disadvantage of sales & trading vs. investment banking is that exit opportunities are not quite as broad.
It’s difficult, for example, to move into PE or corporate development coming from trading.
But getting into investment banking may be a different story, as you’ll see in this interview with a reader who did just that.
Keep reading and find out how he leveraged his sales & trading internship into a full-time offer in investment banking.
Q: Can you tell us about your background and how you got interested in finance?
A: Sure. I’m from the Middle East originally, but I went to Canada for university and attended a well-known business program there.
I started off with an asset management internship but didn’t like the slow pace and reactive nature of the work – though it did give me a good feel for the capital markets.
I started researching the sell-side and speaking with upperclassmen who had done investment banking, and then applied to over 30 banks via my school’s career website.
That led to a grand total of 0 interviews – mostly because I didn’t have investment banking internship experience and because my GPA, around a 3.5, was lower than many of my peers with 3.8+ GPAs.
Q: So you applied to dozens of banks and came up empty-handed – what was your next move? Had you done any networking so you could have a Plan B?
A: Nope. I had done little networking and summer offers were already being handed out – I realized my error too late, so I finally started networking after summer recruiting had finished up.
I went after boutiques and any firms that had not posted jobs on my school’s website – I also focused on VPs and MDs since I had limited time and needed to find something ASAP.
That actually worked out well and I got a much better response rate from senior bankers – I made around 40 calls, set up 10 informational interviews, and made a weekend trip to meet with everyone.
That led to one interview in mid-April, but I screwed up the technical questions completely and had nothing lined up with less than 2 months before the summer began.
Q: So I’m guessing something miraculously worked out at the last-minute?
A: Pretty much. I applied to over 100 banks from January through April, and finally got a lead from an MD in Dubai who asked if I wanted to interview with them, after I had submitted my resume to the default HR person there.
I had also written a short note asking about summer positions and saying I was interested in investment banking – they didn’t have anything in banking, but they did have a few S&T interns and had an open position there, so I decided to go for it.
I prepared for the technical questions, crafted a new story about why I wanted to do S&T, and then interviewed and made it through final rounds.
Off to Dubai
Q: So you were still interested in investment banking, but you now had a sales & trading internship lined up – what was your strategy going in?
A: I knew that the specific desk I worked on would play a big role in terms of spinning the experience for banking.
I could choose between an FX trading desk and a sales desk – and I figured there would be more of a skill set overlap on the sales desk because you do financial statement analysis, meet with clients, and pitch them on specific products.
I did a few rotations and worked in trading at one point as well, but I kept asking to be put in sales.
Q: Was there anything specific to Dubai that you had to consider?
A: Overall it’s a more laid-back culture than what you see in North America, and interns are not given quite as many coffee-fetching / grunt work tasks. That actually made it a lot easier to tell a good story for full-time recruiting because I had more “real” work to point to.
I think your article on investment banking in Dubai was accurate in terms of other features of finance there.
Q: Right, I guess it’s harder to tell a good story when you spend a lot of time each day getting food for traders. Anything else you did during the internship to maximize your chances?
A: At the end of my internship I met with investment bankers at my firm and learned more about what they did on a day-to-day basis – that helped a lot because now I could point to something specific that “sparked” my interest in banking.
I also made sure I could talk about specific clients I worked with and how it was similar to the advisory work that bankers do – and that I could explain why I fit in with banking culture more than S&T culture.
Recruiting: Spin Time
Q: Ok, so you have this internship under your belt and you have some solid stories to point to when networking. What did you emphasize on your resume when it came time for full-time recruiting?
A: I didn’t have too difficult a time with my resume because my experience made me easy to remember – not many people had worked in sales & trading in Dubai.
In terms of my summer experience, I highlighted structured products that I helped pitch to clients and all the financial statement analysis I did.
Rather than acting like it was all about short-term trading, I positioned each client or potential client as a “mini-pitch” and wrote about everything as if we were advising them on long-term decisions instead.
For example, let’s say that I was pitching an institutional investor on investing in a certain company.
A typical salesperson might describe this by writing, “Pitched 50,000 share purchase to Institution; firm later decided to execute trade, earning over $xx in commissions for bank.”
There’s nothing wrong with that, but it doesn’t sound like an investment banker’s experience.
I would spin it around and write something like, “Analyzed financial statements for company and concluded they were undervalued by xx%, using that as key data point in pitch to Institution; firm later adopted suggestion and invested $xx of portfolio, which earned bank $xx in commissions.”
Q: Nice. And I guess you could apply that strategy even if you’re on the trading side, as long as you do any financial statement analysis or valuation.
What about networking? I’m assuming you did more of it earlier on this time around?
A: Going into full-time recruiting, I wanted to try larger firms first – but after the first week and 5-10 job postings, I still had no interviews lined up.
Even with a brand-name bank on my resume, recruiters were still not paying attention because I didn’t have that all-important banking internship – so I pounded the pavement once again and did some in-person networking with alumni and contacts from information sessions from the year before, most of whom were at larger firms.
Right before I left Dubai to return to Canada I sent an update email to all my contacts, which made it easier to set up these meetings.
Q: So were you still focusing on larger firms at this point? Or did you go for a more specific set of banks?
A: I focused on 5 banks – a mix of Canadian and international firms – and met with bankers at each of them in-person.
At this point I also rehearsed my story about why I was moving from S&T to banking dozens of times and made sure that I had an answer to every possible question about my background.
I got interviews at 3 out of the 5 banks I focused on – technically those were through my school’s recruiting system, but I never would have made it had I not networked with bankers outside the official process.
Q: And what about the interviews themselves? Given that you had the S&T internship, did bankers focus on anything different when speaking with you?
A: Since I had worked at a well-known bank – even though it was a different division – they asked a lot of technical questions. Nothing too difficult, but more than someone who hadn’t had an internship would get.
They also asked the usual questions about the stress and hours in banking, the cultural fit, and so on, but those were all quite easy to answer since I had met so many bankers and prepared so much by that point.
Having “interesting” interests also helped a lot – I was into martial arts and always talked about it in interviews, which set me apart from everyone else.
Amazingly, a lot of interviewees just say something like “hanging out with friends” when asked about their interests.
In Another Life…
Q: You were fortunate to do a lot of financial statement analysis and work with long-term clients on the sales desk at your bank.
But what would you say to someone who doesn’t have that option? What are the best S&T groups to work in if you want to move into banking?
A: You usually have 3 choices if you’re an intern: sales, trading, or structuring. Of those, sales makes for the easiest transition into banking – but if you can’t get into sales, try to put yourself in a position where you’re working with Equity Capital Markets or anyone on the ECM team.
Another idea is to request a 1-2 week rotation in sales, even if you spend most of your internship doing something different. 1-2 weeks is still enough to network and get some experience to write about – it’s not ideal, but it’s better than nothing at all.
Yet another option: let’s say you’re on the commodities desk or in commodities sales. You could leverage that type of experience to move into a metals & mining industry group in investment banking since you already have the fundamental industry understanding.
You have to look for opportunities like that where there’s overlap with industry groups in investment banking, or where there’s a skill set such as valuation or financial statement analysis that you can use in other groups.
Q: Were any investment banking groups more receptive to you moving over from sales & trading?
A: Honestly, bankers always favor people with previous banking experience – S&T internships are valued, but not as much as banking internships.
To find receptive groups, you need industry overlap – like the example I gave above with commodities to metals & mining.
You need to find a group that’s complementary to whatever you did on the S&T side – it’s harder to move in coming from pure trading because there are fewer of those complementary pairs.
Q: Right, that makes sense – those tips should be helpful for anyone looking to switch.
What are you planning to do in the future? Don’t worry; this is not a real interview so you can tell me the truth.
A: I actually enjoy valuation quite a bit so I’m planning to stay in investment banking and M&A for a few years – the only reason I’d switch to something else is to get better hours, but I haven’t experienced the worst of that yet so it’s not on my mind.
I’ll be doing something in finance in the long-term, though I’m not sure exactly what or where quite yet.
Q: Great, thanks for your time. Your story should give hope to anyone else out there who wants to make the sales & trading to investment banking move.
A: No problem – hope you enjoyed it!
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48 Hours in the Life of a Sales & Trading Intern
The following takes place between 6 AM and 6 AM, at a large investment bank in Tokyo.
6:00 AM: The alarm goes off. I really want to snooze but via sheer willpower I jump out of bed – need to impress my boss and co-workers.
6:50 AM: I am one of the first people at the office. I breathe a sigh a relief after confirming that my boss isn’t here yet – sometimes he comes in early too.
I had promised myself that I would prove to my boss what a hardworking intern I am. I hastily start the menial task of copying and passing out materials (e.g. research reports, recap of other world markets, latest rates data, etc.) to each trader’s desk. I wonder how many of the traders actually read what I pass out.
8:00 AM: The trading desk is almost full now. I am skimming articles on financial websites and Bloomberg, preparing myself to sound well-informed on the markets when talking to people for the rest of the day (Note: Many trading interns do not get access to Bloomberg since it is very expensive… to the tune of $1500 USD per month). I try to predict how the news will affect the markets for the day.
8:15 AM: All the equity traders have arrived at their desks – fixed income trading is on another floor. Everyone gathers for our morning meeting. Some of the salespeople that work with the traders float over to listen in.
Traders that specialize in each sector or type of trading – vanilla equity, options, portfolio trading, agency trading, etc. – give quick overviews of what happened the day before and their predictions for the upcoming trading session.
What happened overnight in the US/European markets is also naturally a point of discussion, since markets tend to follow each other.
Sometimes I struggle to understand all the jargon or the specific concepts underlying their comments, but overall I can grasp what they’re saying. Everyone speaks in English at the meeting, but many revert to Japanese afterward.
9:00 AM: The Japanese stock markets open. Today I am spending the first couple hours sitting next to an equity options trader, having gotten his permission the day before. I make sure to stay especially quiet right before and after the market close, since those are the busiest times for traders.
Out of his 6 monitors, he has Excel open on 2 screens, Bloomberg open (usually charts) on another 2 screens, Reuters open on 1 screen, and another screen for Microsoft Outlook. The numbers in Excel update every second. I see the trader wrinkle his eyebrows and I wonder why.
10:00 AM: I wait for a moment when the trader seems less busy, and I ask him about what happened. Apparently his gamma had not been hedged as well as he had thought – shortly after the market opened his gamma rose to a higher level than he had anticipated, which meant more risk than he wanted.
I nod in appreciation; I know that some other traders would not have bothered to answer my question.
11:30 AM: Today is a volatile day in the market, and many traders don’t feel comfortable leaving their desks for lunch. I am sent to McDonald’s to buy burgers for most of the equity traders. I’m OK with doing a bit of grunt work; after all, I am an intern, and I’m way better off than the interns in Liar’s Poker.
12:30 PM: By now my eyes and neck are a bit sore from looking at the equity trader’s 6 screens while sitting at the edge of his desk. The market is slowing down a bit now anyway, so I return to my own desk and read some articles and midday market recaps.
I work on the stock picking analysis project that my boss assigned to me, but I know I won’t be able to get any serious work done until the late afternoon.
1:30 PM: I figure I’ve annoyed the equity option trader enough for the day, so I try to find someone else on the desk that’s approachable enough to let me sit by them. I end up sitting next to an equity trader who focuses on retail stocks. Unfortunately, he is one of the more introverted types, and it’s hard to get him to say much. I see him make two trades for the rest of the day.
3:00 PM: Japanese stock markets close. Of course, there’s still after-hours trading, and much work to be done. I see the equity options trader I sat with get up and go to the coffee room. I “coincidentally” happen to go to the coffee room for a break.
There, I thank him again for letting me sit with him, and I do the best job I can of commenting on what happened in the market that day, while asking his opinion on a few points.
He comments that I am pretty knowledgeable for an intern, and it seems like I have made a good impression on him. I think to myself, “Yes…. one step closer to getting a full-time offer…”
4:00 PM: I go out for coffee with a guy from the middle office, an appointment made previously. He’s one of the junior guys, so he’s not too much older than me.
As an intern, not everyone is willing to go out to coffee with you – and sometimes you can learn a lot from people other than the managers and star traders.
I milk him for information: Which traders are more approachable? Exactly how do you interact with the traders? What happens when a trade doesn’t settle correctly? We also bond by talking about which girls in the office are cute.
5:00 PM: My manager takes me to a small conference room for my 10-minute weekly meeting. How much have I learned so far? Which type of trading was I most interested in? Did I have any questions? He reiterates that the competition is tough and that I’ll have to keep working really hard to impress everyone if I want a full-time offer.
5:30 PM: I start working on my stock picking analysis project once again. By downloading data (both fundamental data and technical analysis data) from Bloomberg into Excel on thousands of stocks, I try to figure out a handful of stocks that would be good long trades, and some that are good short trades. This is only one of several projects I am working on.
7:00 PM: Many of the traders have left their desks by now. I wander around the trading floor trying to find someone who’s not in a hurry to go home, and I try to start a conversation to learn something about their trading that day.
Sometimes traders are more relaxed at this time of the day and it’s easier to talk to them.
7:30 PM: I get an email with a link to 50-page economic report from the research team. I interrupt my work to skim the report.
8:00 PM: Almost all of the traders have left the office. Why is my manager still here?
8:30 PM: My manager finally goes home. Whew. I try to wait at least 15 minutes after he leaves so it doesn’t look like I am leaving right after he does.
While there’s less face time in trading compared to investment banking, you still don’t want to leave before your boss – especially as an intern.
9:00 PM: Meet up with a friend and some of her friends for dinner. Most of them are done eating by the time I arrive, but at least I get to say hi.
11:00 PM: Arrive at home. I plan to go to sleep within 30 minutes but after checking email, I end up staying up past midnight. I cringe when I think about how hard it’ll be to wake up the next day.
Then I think about my investment banking intern friends – who are still at the office – and I feel a bit better.
5:40 AM: Wake up. I had set my alarm earlier because the day before I had trouble finishing the grunt work on time. I pummel my own head in an attempt to feel awake.
6:30 AM: I arrive at the office… and there is only one other person there. Hmmm, am I working too hard? I tell myself it’ll all be better once I am a full-time employee – which is usually true, at least in trading – and then I begin copying research materials that need to be passed out later.
7:00 AM: The copier is jammed, and I didn’t notice for 15 minutes. Crap. I start to multitask, using 3 copiers instead of 2.
8:00 AM: Today, before the general traders’ meeting, I go to the agency traders’ smaller meeting, which is only in Japanese. The agency traders are responsible for executing the large orders placed by large buy-side institutions, like mutual funds.
They talk mostly about news and overseas market movements, but they also talk about the previous day’s order flow, and about how a research report produced by our firm today might cause a lot of orders for a specific stock. The meeting lasts about 10 minutes.
9:00 AM: The Japanese stock markets open. Today I am spending the first couple hours sitting with the agency trading team. Agency trading is really different from proprietary trading because all the decisions about what and how much to trade are decided by the client – the only decision made by the trader is how to divide the order into smaller trades and when to execute them.
The trader I am sitting with has been doing this for years, and is able to constantly submit trades while barely looking at the screen and talking to me at the same time.
I pray that his discussion with me doesn’t cause him to make any mistakes. Fortunately, he doesn’t have fat finger syndrome. The trader has 4 screens – 1 for order submission and order details, 2 for Bloomberg (charts), and 1 for email / browsing. I am able to ask a dozen or so questions, which is more than usual.
11:00AM: The Japanese market closes for the lunch break (1.5 hours). I go out to lunch with the agency traders, who have less work than the other traders since they don’t have to do as much analysis.
Half of our conversation is about trading, and the other half is about Japanese celebrities. My knowledge of celebrities helps me bond with them… which might increase my chances of getting a full-time offer? I later realize that bonding with traders and being liked are quite important for getting an offer.
M&I Note: This is an important and oft-overlooked point. As an intern, people need to like you if you want a full-time offer – and the same goes for entry-level interviews as well.
12:30 PM: Since the agency traders don’t seem to be annoyed by me, I keep sitting with them until the markets finally close at 3 PM. I start to get bored and tired near the end, but I keep myself busy thinking of new questions for them.
3:30 PM: I had previously made an appointment for coffee with one of the sales traders, but he cancels on me for the second time. Maybe I just should give up on talking to this guy.
4:00 PM: The Head of Prop Trading is having a meeting with some other traders and some middle office guys and suddenly calls me and another intern into the meeting. He wants me and the other intern to help with trading commission calculations, and I have to collect some of the information necessary to do so myself.
I am surprised that a bulge bracket investment bank doesn’t precisely track its trading commissions – but later, I realize that even the biggest financial institutions are full of problems you wouldn’t expect.
I think about how I already have a big trading analysis project AND an equity research project AND grunt work AND other random stuff I have to do, but at the same time I can’t bring myself to say no. This guy is an MD, so I’ve got to impress him. Fortunately the other intern pipes up and finds excuses for why we can’t help.
4:30 PM: Afternoon snack. I go downstairs and make sure nobody I know is in the room, and then I eat a sandwich while massaging my eyes and neck. I don’t want to come off as stressed or physically strained to anyone.
5:00 PM: I spend an hour trying to figure out some Excel VBA for automating organization of data in the trading analysis spreadsheet I’m making. After some trial and error, I get it to work.
The other intern sucks at Excel and is having trouble doing his analysis, so he comes to annoy me with questions. I wonder why an MBA knows less than me about Excel.
7:30 PM: I eat some ramen. Mmmmm. No matter how unhealthy or cheap it is, I still love ramen.
8:00 PM: I feel really tired, so instead of working on my project I just read tons of financial articles. Nobody is paying attention to what I’m doing, anyway.
8:30 PM: Half of the trading desk is still here, mostly junior people. What are they still doing? I go over and talk to them – they are planning and analyzing trades for the next day.
I conclude that if these people weren’t workaholics, they probably wouldn’t be here. Then again, if you’re making or losing millions of dollars every day, sometimes overnight, maybe you’d never be comfortable being away from work anyway.
9:00 PM: I go home and cook noodles with canned fish, seaweed and soy sauce and eat them while watching Japanese music videos. Actually, it’s a pretty good way to cool down. I read a chapter of Future, Options, and Other Derivatives by John Hull.
11:00 PM: I crawl into bed. Wow, I’m going to get almost 7 hours of sleep!
6:00 AM: Wake up. Back at it…
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