Stuff Investment Bankers Like, Round 3
It’s been awhile, so let’s jump right back into it.
15) Unsolicited Advice
Working in investment banking, you will age more rapidly than the average person.
So many bankers start to feel that their true age is higher than the number of years they’ve been on the planet – which is what inspires them to give unsolicited advice.
It happens when senior bankers “advise” the juniors and when junior bankers tell interns exactly what they should be doing at all times:
“You know, you should strive for a long and celebrated career in investment banking. All hedge funds collapse anyway, so don’t even think about going jumping ship and going to one.”
Thanks, but did I ask you or even mention my future plans?
“Check your work very carefully before showing it to anyone.”
Thanks – I was planning to add in a lot of errors just to make it more interesting.
16) Stacks of Unread Newspapers
Almost as much of a badge of honor as how many holidays you’ve worked (see below) is the number of unread newspapers on your desk.
Not realizing that they can check the news by looking online for 2 seconds, any senior banker worth his salt instead gets a daily subscription to the WSJ.
And then they let newspapers pile up on their desks while they’re off traveling 24/7.
When they come back to the office, of course, they immediately ask their assistant to “clean up” or “get rid of all this garbage.”
And you wonder why the rain forest is disappearing…
While I’ve not been kind to the back office and support teams in the past, I can’t lie: a good assistant will save you time and time again.
A lot of incoming bankers and interns get this one wrong and treat assistants like crap, never acknowledging them or taking 5 minutes to have a friendly chat.
These newbies are surprised later when they suddenly don’t know their VP’s cell # or they can’t figure out what their MD’s schedule is next week when they’re up at 2 AM sending out an email to set up meeting times with a client.
Treat your assistant – or any support person – right, or you’ll suffer the consequences later.
And no, no matter how much you like your assistant you still can’t hook up with her (or him) – only MDs get to do that.
18) Working on Christmas
Aside from how many consecutive all-nighters you’ve pulled, there’s no greater badge of honor among bankers than how many holidays you’ve had ruined by work.
No one considers occasions like Halloween or Valentine’s Day to be real “holidays,” so forget about those – the 2 untouchable ones are Thanksgiving and Christmas (at least in the US – elsewhere it varies by country).
Being a masochistic bunch, at some level bankers enjoy this kind of abuse.
There’s no higher glory than looking at your Blackberry constantly and responding to emails while everyone else at the table is staring at you in disbelief.
And then you get to complain to all your friends about how you had to pull an all-nighter on Christmas Eve – all the while secretly enjoying that you can now complain about it.
19) Models and Models
Everyone gets into finance for different reasons, but there are just 2 core motivators: 1) Money and 2) Prestige.
No one could be interested in talking about bonds or interest rates or EBITDA just for fun, right?
By comparison, financial modeling seems like the most intellectually engaging activity ever, even though it’s really not rocket science.
So as a banker, you relish opportunities to crunch numbers and do more than just collect data and send emails.
And if you’re looking for other types of models, head to Buenos Aires.
Whenever you close a deal, along with the Closing Dinner you get to design a “lucite” – a trophy of sorts to commemorate all the man-hours spent on that IPO or that acquisition and all your blood, sweat, and tears.
If you worked on a casino acquisition, your lucite might be in the shape of a roulette wheel or poker table; for a pharmaceutical deal maybe you’ll get to design something in the shape of a vial or pill bottle.
Much like how you’ve lined your walls with all those meaningless awards from high school and college, bankers line their shelves with these lucites to impress visitors.
For the analyst who has gone Patrick Bateman, lucites have another use as well: weapons.
So make sure you design something sharp – you’ll never know when you might need it one night after you’ve pulled one too many all-nighters and they discover the bodies in your apartment.
21) Forecasting the Apocalypse
“Wall Street is over! New regulations will doom the industry! Pay will never recover, time to find a new profession!”
The correct answer is “all of the above” because bankers have been forecasting apocalypse as long as the industry itself has been around.
As long as capital markets exist and companies need to raise money, they’ll need bankers.
Just make sure you keep telling everyone the end is nigh, though – you don’t want to seem overconfident.
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Recruiting in a Down Market, Part 4: How to Weigh Your “Plan B” Options and Ensure That You Don’t End Up with “Plan Z” Instead
Sure, it’s great if you can defy all odds and get into finance in the midst of a recession.
But let’s be honest: there’s always a chance that things may not work out, simply due to probability, bad luck, and the general lack of hiring.
So, if you don’t get into investment banking, private equity, hedge funds, or whatever else you’re after, what are your best alternatives?
In other words, how do you decide which “Plan B” option is best and which one you can actually leverage to move onto something better?
Rather than giving generic advice, we’ll go through a couple common “Plan B” options and look at the advantages, drawbacks, and key considerations for each one.
The Problem with “Plan B” Planning
There are 2 big problems when you consider any “Plan B” scenario:
- It’s really, really hard to time the market. Like, almost impossible.
- It can be very, very difficult to transition over to a front-office finance role later on.
These problems are lessened if you’re only resorting to Plan B for your internship. If you’re going to the fall-back plan for a full-time offer, you’ll encounter greater difficulties.
Whenever you’re consider your backup plan, you need to take into account the 2 problems above and consider how much your plan depends on timing the market, and how difficult it will be to transition over later on.
So let’s go through some of the more common options you might be considering, and look at each one through the lens of these 2 key points.
This is a popular one these days.
“I’m an accounting major and didn’t get into banking! Should I go to an MBA program right after graduation?”
“What about the Harvard 2+2 program? Will that get me in?”
The bottom-line is that business school is a bad idea if you only have minimal work experience.
Theoretically, a top MBA program allows you to re-brand yourself and break into new industries, but the reality is more complicated – especially when the economy is bad.
Business school is a terrible “Plan B” if you’re just out of undergraduate or you’re graduating soon – it’s a better move if you’ve already been working for 3-5 years and you’re looking to make a transition.
But even then, your success will depend greatly on the state of the hiring market – so it’s always a gamble.
Despite what new programs like HBS 2+2 may claim, banks are still heavily biased against anyone who lacks substantial experience.
Other Grad School (Master’s Programs and More)
Master’s programs are a better idea for anyone who didn’t break in during the first round and wants to have another chance at it.
But don’t expect that the degree itself will give you any advantages.
You go through such programs to give yourself more time to prepare for recruiting, to make a stronger impression, and to land more offers next time around.
But don’t expect to come in as an Associate after finishing a 1-year Master’s program – that’s just not the way it works.
The best reason to do one of these programs: if you got a lot of interviews but didn’t end up with offers, or you didn’t up with the right offers – and you’re at a school where you can take advantage of on-campus recruiting.
Corporate Finance / Strategy at Fortune 500/1000 Companies
Of the “non-school” options, going to a corporate finance or strategy position at a large company is the closest to front-office finance work that you’ll find outside the industry.
If you get this kind of offer, but have nothing else client-facing in finance/consulting, it’s probably in your best interest to take it.
But there are 2 problems you’ll face:
- You may not get to work on any acquisitions / partnership deals, so it will be more difficult to “spin” your experience into looking finance-related.
- You will still be at a disadvantage vs. anyone who has had a banking/private equity internship before.
You can’t do much about the second one; that’s just the way it goes. But for the first one, you should push to work in groups and teams that do more transaction-oriented work.
In other words, try to be involved with business development as opposed to internal strategy planning. You want to be valuing and evaluating acquisition, not dreaming up operational strategies.
You could also run into difficulties if you go to a smaller firm rather than a Fortune 500 / 1000 company, because the name is less credible and it won’t stand out – so try to work somewhere well-known if you go this route.
Middle / Back-Office Work
We covered this last year in one of the most controversial articles to be published on this site, “Holla Back, Office: 7 Reasons You Shouldn’t Work in the Back Office,” but just to re-cap: it’s really, really hard to transition over from middle or back-office work to client-facing work, especially if you’re working full-time.
It’s easier if you’re trying to move into prop trading or sales & trading, because the middle/back-office people there actually work with traders closely – but it’s much harder if you’re trying to make the move into banking or private equity.
I’d advise against this as a “Plan B” unless you truly have nothing else – even delaying graduation or taking time off to do something else is usually a better idea.
If you want to make the transition after working in the middle/back-office, keep in mind the following:
- It’s often easier to move to another firm rather than transferring internally.
- You will need to “build a buzz” about yourself in a front-office division by networking extensively and getting to know people there who will push for you.
This is an incredibly difficult transition to make in a poor economy – but hey, nothing’s impossible.
An Entirely Different Industry & Role
Maybe you’re thinking about going to a Big 4 firm, working in advertising at a big agency, or even doing volunteer work or going to a non-profit for a few years.
The big downside to doing anything like this is that you’ll almost certainly need to go to business school to re-brand yourself and have a chance at breaking in later on.
If you’re considering one of these as a summer internship option, it’s not necessarily the end of the world – though if it’s your final summer before graduation you’ll face a serious uphill battle against those with more business experience.
There’s another danger as well: you might be “over-qualified.” Some readers with finance experience actually had trouble going after accounting-type positions as back-up options, because they seem over-qualified on paper – and no one likes to be known as a “sure thing,” as Johnny Drama might say.
If you do end up doing one of these full-time, you’ll probably need to go through an MBA program to have a shot at breaking in.
Becoming a Ski Bum
Ah, yes, the fabled ski bum option.
The problem with becoming a ski bum is that your fate is tied almost 100% to what the market is doing. You’re not gaining any relevant experience or making any contacts, so you aren’t helping yourself too much if things don’t improve.
If the economy rebounds and hiring picks up, you might be able to pull this off… but if it stays bad, you’re in an even worse position.
Personal story: A few friends from top schools went to teach English in Asia following graduation, at the peak of the bubble.
When they got back, the recession was in full-swing and they had a hard time finding anything despite having Ivy League names on their resumes.
So you shouldn’t do this unless you’re not set on finance in the first place. There’s nothing wrong with taking time off, but it does put you at a big disadvantage unless the market happens to miraculously recover in short order (not likely).
Well-known fellowships and other scholarly programs could be an interesting option these days, especially if they’re finance-focused. You’re not technically “working,” but you’re also not sitting on the beach.
But you’ll need to make whatever you did look finance/business-related – oh, and a lot of these programs are extremely competitive, sometimes more so than getting into finance in the first place.
This type of plan is still better than doing something middle/back-office related or in a completely different industry if you lack better alternatives.
The main downside to fellowships vs. staying in school or delaying graduation is that you can no longer use on-campus recruiting – so you’ll really need to become a networking ninja.
The good news is that many of the well-known programs have strong alumni networks that you can leverage, so it’s not as difficult as pounding the pavement and breaking in from ski bum-land.
Treasury / Government Work
This is a relatively new option for most prospective bankers, but it just might be the most interesting one on the list.
These days, governments around the world own stakes in almost every financial services company because of all the bailout activity – and they need fresh blood to help manage all these new “portfolio companies.”
It’s sort of like working in private equity, except you’re more concerned with saving the economy rather than earning a high return.
This is also one of the few finance-related areas that’s actually growing these days – and as the economy gets worse and more banks get bailed out, that need for fresh blood will only grow.
Especially if you’re going to school in the DC area (if you’re in the US), or in a major government capital elsewhere in the world, you should be strongly considering this one.
The only “better” options would be front-office finance work or doing business development at a large company.
Entrepreneurship… for a Summer?
A recession is the best time to start a company. Microsoft and Apple were both founded in the stagflation of the 70s, and many successful Internet companies today were founded in the aftermath of the dot-com bust.
Starting a company or organization shows initiative and leadership, both of which look good to banks – but the downside is that it also shows that you’re independent and free-spirited, which banks don’t like.
Actual quote overheard from a recruiter once:
“I don’t know if we should take him… he’s done a lot of creative ventures before, I’m not sure how well he would fit into a more structured environment.”
If you have this type of experience, you need to emphasize the leadership skills you developed and downplay your independence – usually the best strategy is to say you didn’t learn much because of the lack of structure, and that’s what appeals to you about i-banking.
Then there’s another paradox that you’ll encounter with entrepreneurship: if you’re successful, banks will wonder why you’d ever want to work 100 hours a week for someone else and make less money doing it – but if you’re not successful, it looks like you’re changing careers because you failed.
That can make it difficult to tell a good story, and in a lot of cases business school will be necessary if you want to make this type of transition.
One other note: private equity firms – especially smaller ones – are more impressed with entrepreneurial experience than banks are.
So if you’ve run a mid-sized import/export company before, that can be a strong-selling point if you’re applying to middle-market PE firms.
Plans C Through Plans Z
We’ve covered a lot of ground here with some common “Plan B” options you might be considering.
What else are you thinking about doing if you don’t get into finance in the near future?
Leave a comment here with some of your ideas and fall-back plans, and we’ll respond with thoughts and feedback.
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Positioning Yourself for Business School, Part 1: The Financier
It’s a question on everyone’s minds these days:
“How can I get into the Harvard, Stanford, or Wharton MBA programs?”
“If I don’t get into finance or consulting right now, should I go back to business school instead?”
“How can I stand out from everyone else who’s applying?”
With the markets still in turmoil, more and more people are thinking of heading to business school. Even those who actually have jobs are thinking of going back to school to insulate themselves from layoffs and get a 2-year vacation while they’re at it.
Regardless of your background, though, you’ll face a unique challenge getting into business school and then using it to get into finance:
The criteria to get into business school is different than the criteria to get into finance coming from business school, and the two often contradict each other.
So here’s how you solve that problem…
The False Promise of Re-Branding?
Here’s the paradox that crops up when you apply to business school and then try to leverage it to get into finance:
- Top schools like a diverse student body – they don’t want everyone to have done two years of banking followed by two years of private equity. Especially in recent years, these schools have become biased against students with pure finance backgrounds.
- Banks and financial firms, on the other hand, don’t care nearly as much about diversity and would love to recruit only students with previous finance experience. Someone with previous experience represents reduced risk, and is more likely to stick around past their first all-nighter creating a pitch book.
In late 2007, recruiters were still trying to convince me that two years of banking followed by two years of private equity was a “guaranteed” ticket into top MBA programs. It’s funny how quickly things can change.
One of the key selling points of MBA programs is a chance to “re-brand” yourself. And when banks desperately need people (see: 2004-2006), they’ll open up to your story of personal transformation from traveling bard to the next Gordon Gekko.
But when they’re not so desperate (now), they start to consider only those who have done finance before.
So this selling point is highly dependent on market conditions and often turns into disappointment for MBA-level applicants without some type of finance experience.
This past recruiting season, I spoke with many talented business school students who had started companies, nonprofits, and had all sorts of other impressive accomplishments. But even with those credentials, each one faced an uphill battle getting interviews and job offers if he or she had not done finance previously.
This brings us to a curious conclusion when looking at both of these points together:
If you’re already in finance, you need to find a way to stand out amongst the crowd and tell an interesting story if you want to get into business school. And if you’re from a different background, you still need to worry about that – but more importantly, you need to find a way to show banks that you can do the work.
In this article, we’ll address anyone in the first category: anyone from a finance background thinking of business school.
Standing Out From a Finance Background: Got Prestige?
I received an email from a reader the other day asking, “I thought it was basically the prestige of your firm that set you apart in MBA admissions?”
My response: While brand-name recognition matters, admissions committees don’t view you dramatically differently based on where you worked within a specific industry. They’re not going to look at someone and say, “Aha! He worked at Morgan Stanley so he should definitely get in, but that guy only worked at Houlihan Lokey so he is obviously unqualified to join us!”
You do gain an advantage by working somewhere well-known, but keep in mind that people from all sorts of different backgrounds apply to business school – so the “prestige” arguments people often get in on message boards become even more pointless in this context.
After reading thousands of applications, anyone in admissions starts to view most banker types as… pretty much the same.
So basing your entire application on the “prestige” of wherever you worked is a losing proposition, especially these days when tons of laid-off financiers are applying to business school.
The Real Way to Stand Out
Alex from MBA Apply hits the nail on the head with the real way to stand out in admissions:
“Build a life, not a resume.”
This is not a new concept for anyone who’s been reading this site over the past year. Regardless of whether you’re applying for business school, university, or even going through interviews, your chances of success depend largely on your “story.”
One small problem: if you work full-time in finance, it may be almost impossible to find the time to do anything outside work.
How to Develop an Interesting Story Even If You Have No Time
You don’t need to spend 20-40 hours per week on something to make yourself stand out.
But if you’re in banking or at a large PE firm, you probably don’t even have five hours per week to spend on other activities.
If you’re still thinking about business school and have absolutely no time for outside interests currently (Wait, how are you reading this article then? Hmm…), here’s what I’d recommend:
- First, decide if you’re actually interested for the right reasons. If you’re planning to stay in finance for the long-term and you’re already in it, an MBA usually doesn’t make a big difference (exceptions apply). Being “interesting” therefore matters far less.
- If you are interest is sincere, reduce your work commitment by moving into a different firm, group, or industry. A word of caution: in most cases the only move that “guarantees” a better schedule is leaving finance and moving into “industry” in a business development or corporate finance role.
- Once you have the time, develop some of those forgotten interests and hobbies… or find new ones. Even something that only takes up a few hours per week can be spun into a good story on your applications.
Before exiting or entering different industries, you really need to weigh why you want to go to business school in the first place. My own personal view is that the “2-year vacation” plan is a bit silly given the expense, opportunity cost, and the fact that you’ll actually be quite busy (programs have become more rigorous).
That’s especially true these days, when everyone has the exact same plan and admissions are more competitive than ever before – you need better motivation than just wanting to take a break.