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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Why You Didn’t Land an Offer in Your Final Round Interviews at Morgan Stanley
“Help! I went to my final round interviews but the interviewer didn’t like me from the start and kept harassing me with irrelevant questions. I asked for feedback afterward and they said, “Improve your technical skills.” How can I do that? They didn’t even ask me any technical questions.”
Final rounds are over.
Banks are done giving out offers.
While most of the articles on this site teach you how to improve yourself and land offers, this one has a different message: interviews are random.
Sometimes it’s not your fault if you don’t get an offer.
Really Beyond Your Control?
And you can always improve your technical knowledge.
But sometimes, no matter how many interview guides you’ve read or how many finance classes you’ve taken or how many internships at Goldman Sachs you’ve had, you won’t get an offer.
Problem #1: The Interviewer is Having a Bad Hair Day
Maybe your interviewer just got chewed out by his MD – or maybe a nightmare client ruined his weekend by calling him into work on a Saturday night.
Maybe he broke up with his fiancée right before his planned wedding, or maybe he saw your CV, realized that you’re from a rival school, and decided to hate you as a result.
If you walk into the room and the interviewer is hostile from the start, you won’t overcome that.
What To Do About It: In this scenario you can’t do anything to change the interviewer’s mood – all you can do is control your own emotions.
Always assume the worst when walking into an interview – expect that it will be horribly stressful and that your interviewer will antagonize you the whole time.
And then if it’s better than what you expected, you’ll have it easy – and if it’s as bad as you expected, at least you were prepared.
If it was so horrible that you know you have no chance of landing an offer, you can also ask directly at the end what you could have done to improve your performance.
Not everyone has the guts to do that, and you should only consider it if it was a train wreck of an interview – but that type of question lets you see whether you actually messed up or if it was the interviewer.
Problem #2: The Interviewer is Wrong About a Technical Question
Here are just a few of the incorrect technical questions I’ve seen before:
- The interviewer has the wrong formula for the terminal value in a DCF and claims that he’s right and you’re wrong.
- The interviewer claims that 1 valuation methodology “always” gives a higher value than all the others or that there’s always an exact ranking (there isn’t – it depends on the assumptions).
- The interviewer claims that Depreciation “always” shows up as a separate line item on the income statement (it doesn’t, sometimes it’s partially or fully embedded in other expenses).
There are 3 possibilities when the interviewer has his facts wrong:
- The interviewer genuinely thinks he’s right, even though he’s not.
- He’s testing you to see whether or not you’ll call him on his mistake.
- It’s an advanced or industry-specific topic and his group does things differently from everyone else.
#3 is not terribly likely unless he’s asking extremely advanced technical questions or something where there’s no universally correct answer (e.g. how to project revenue and expenses, which depends on the company and the industry).
#2 is also unlikely because it’s silly to play mind games like that in an interview, but it does happen.
#1 is the most likely scenario – remember, not all investment bankers know finance perfectly.
Some groups get limited exposure to modeling, and banks hire plenty of people without finance backgrounds – so you could always run into an interviewer with weak technical skills.
What To Do About It: If it’s a basic question – e.g. standard formulas in a DCF or how to link the statements together – don’t immediately give in if the interviewer claims that you’re wrong.
Say that you understand what he/she is saying, but that you said something different because [Explain Your Reasoning] – that handles the case where he/she is “testing” you.
Do not do this unless you are 100% certain and it’s a standard question or formula that you’ve seen in books, guides, and other resources before.
But if the interviewer cuts you off or it’s clear that he’s not just testing you after you explain your reasoning, don’t get into an extended argument: sometimes interviewers are just wrong.
But hey, would you want to work somewhere where bankers don’t even have basic technical knowledge?
Problem #3: The Interviewer Keeps Asking Why Your Grades are Low / Why You Didn’t Go to a Top School
So you thought grades and school prestige would only matter for interview selection – but your interviewer disagrees:
- “Why do you have a 3.2 GPA? Are you lazy or just stupid?”
- “Why didn’t you go to Harvard, LSE, or Oxford? I’ve never even heard of your school.”
Unlike problems #1 and #2 above, you can actually prepare for these questions ahead of time – just don’t get blindsided by them in an interview without a plan or you won’t be able to do much.
What To Do About It: You can’t do anything to change your GPA or where you went to school – you only have 2 options:
- Have a good story explaining why you have lower grades or why you didn’t go to a top school.
- Apply for Master’s in Finance programs (or MBA programs in the longer-term) and use those to get a brand name and higher grades.
To explain a low GPA, emphasize improvement over time rather than making excuses (you think they haven’t heard the “family emergency” line before?): acknowledge that you screwed up in your first year but then improved and took classes more seriously.
To explain a less prestige school, say that your family could not afford an expensive option and that you made the most of it to get where you are – remind them what a challenge it was to even get an interview at this bank.
If GPA and school name are a repeated problem in every single interview and they prevent you from getting offers everywhere, then a top Master’s program is your best bet (click here to read all about them).
Problem #4: You’re Put On Hold
You finished your final round interviews and performed well – but a few people were better than you.
You can improve your own performance, but there’s no way to tell what the competition will be like – so this one is out of your control as well.
So you’re on hold, either officially (they tell you) or unofficially (you don’t hear back from them).
You’re tempted to follow-up to “sell yourself” once again and boost your chances…
…but please, don’t do that – at least, don’t do a “hard sell” immediately after.
Persistence is good, but there’s a thin line between persistence and desperation.
Sell yourself before and during the interview, but resist the urge to do so after the fact: it looks desperate and interview decisions are made almost immediately afterward anyway.
What To Do About It: Instead of moving to an immediate “hard sell,” follow-up with everyone within a few days to express your continued interest in the firm.
If they don’t give you a direct answer and time keeps dragging on, call one of them and ask directly what you can do to improve or become a more attractive candidate.
And if it’s something you can fix (e.g., technical skills, communication skills, etc.), do so by submitting evidence of your improvement.
Beyond this, all you can do to accelerate the process is get an offer from another bank, bring it to the first bank, and tell them that you need a decision ASAP due to this pending deadline.
Just make sure you don’t make up an imaginary offer elsewhere and lie about it.
No Offers – What to Do?
Sometimes your offer status is beyond your control – just think about how random the interview selection process is, and now add in all the additional irrationality that comes from meeting bankers in person.
So you need to figure out why you didn’t get an offer and whether you can actually do something about it.
If not, chalk it up to bad luck and move on with life, continue networking, spread your net wider, and follow the advice here if you end up with no offers as recruiting is wrapping up.
And remember: it was the interviewer – not you.
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