8 Tips to Networking Without Being Fake

As investment banking is a business of people. Whoever is good at networking will have a better chance to succeed. I come across this video which is really impressive. Whether you are a skillful networker or a starter, you'll find this video inspirational. Enjoy it and feel free to share it with your beloved.

8 Tips to Networking Without Being Fake

Credit Suisse Interview Tips

If you are serious about landing an investment banking job in 2013, here's a very insightful article to read.  This short article doesn't only talk about interview tips but a lot of information you need to know about landing an IB job.

In a nutshell it covers these points:

• About the author
• Why IB
• Special Attention / Keywords for Investment Banking Resume
• Interview Preparation
• Questions I Would Ask a Prospective Investment Banker
• Dos and Don'ts in the Interview
• Selection Criteria
• Life as an Investment Banker 

How To Become An Investment Banker At Credit Suisse

About Myself

 

I graduated from a top undergraduate business school. I did a summer internship with Credit Suisse and spent nearly two years there after graduating from undergrad. I worked in the Los Angeles office and was focused on leveraged finance and M&A. I spent the bulk of my time working on deals for many of the largest private equity firms in the world. After my time at Credit Suisse I decided that I wanted to complement my finance skills with strategy capabilities. I joined one of the leading management consulting firms, rising to the position of Senior Case Team Leader. I completed my MBA at one of the top programs and I now work at a leading middle market private equity firm, a role which combines both my finance and strategy skills.

 

Why I Chose Investment Banking

 

Skill set development is extremely important to me. In business I consider finance and strategy the two paramount capabilities requisite in rendering strong business decisions. Unequivocally the best training out of undergraduate and MBA studies to develop a financial skill set is investment banking. It enabled me to become fluent in everything from financial statements to valuation to investment logic to transaction execution. This is a skill set that can only be achieved through the experience of doing deals. Furthermore, investment banking allowed me at a very young age to have deep exposure to the senior executives of Fortune 500 corporations. These exposures were both stimulating and great learning experiences. Investment banking also enables varied exposures. I worked on industries spanning energy, entertainment, health care, industrials, manufacturing and more. I also worked on product groups spanning equity raises (IPOs), bank and bond raises, leveraged buyouts, dividend recapitalizations, and strategic acquisitions. It is very rare in business to have such varied exposures so quickly and this breadth of experience meaningfully motivated me to banking. More than anything though was that I knew it was a very respected profession that would be a great springboard to whatever I ultimately decided I wanted to pursue in business.

 

Special Attention / Keywords for Investment Banking Resume

• Transaction experience: If you have ever been involved in deals like any of those I noted above, be sure to make mention of them in your resume and explain your role in those deals in your interviews as well as at a high level in your resume.
• Attention to detail: Investment bankers have a tremendous attention to detail. No comma can be in the wrong place, no extra spaces, everything must be accurate and aesthetically appealing. So too is the case for the resumes reviewed by investment bankers. If there is an error in the resume then the odds are the candidate will not have the requisite attention to detail. Make sure your resume is thoroughly reviewed so it is accurate.
• Financial Designations: If the candidate has any significant designations, such as a Series 7, CFA, etc. be sure to note this in the applications. Languages: Investment bankers often work on deals internationally. If you speak any other languages make sure to note this.
• Extracurriculars: Too often when I reviewed candidate resumes at Credit Suisse people failed to list their extracurricular achievements. Investment banks are highly social institutions and seeing lots of good extracurricular roles suggests that the candidate can fit in. If your leadership roles were elected, you can put “(elected)” in brackets after your title for the role, this is further proof that you are well-liked and can fit in.
• Job Locations: This point is particularly important for bank offices outside of New York. These offices will want to know that you have a link to the area. Therefore, if you have ever worked in or near that city be sure to list the location of your jobs on your resume. At a minimum, if you are applying for a role in Charlotte make sure your cover letter indicates why you want to work there.

Interview Preparation

• Read a few investment banking culture related books like Monkey Business and Liar’s Poker, it will give you something casual to discuss with the interviewer and most everyone in the industry has read these two books.
• Make sure you are deeply familiar with the principles of valuation: accretion/dilution analysis; equity and debt comparables analysis; comparable transaction analysis; leveraged buyout modeling; discounted cash flow analysis (make sure you know what weighted average cost of capital is and be able to explain it in granular terms). Be sure to understand each of these analytical tools, when and why they are used and what they tell you.
• Know your metrics. Know how any why to calculate: EBITDA (earnings before interest, taxes, depreciation and amortization); total enterprise value / EBITDA; the difference between trailing (aka LTM – last twelve months) and forward multiples; free cash flow (aka FCF); EBIT (earnings before interest and taxes); maintenance versus growth capital expenditures; debt ratios like total or net debt to EBITDA; covenants; have a broad understanding of reps and warranties in deals.
• Know stock market index numbers especially: where the DOW, NASDAQ, S&P, oil, gold, LIBOR, and if applicable the stock of the investment bank you are meeting with are trading at. Also know key currency exchange rates (US versus pound, euro and Canadian dollar).
• Have researched a minimum of two companies and be able to discuss why they would or would not make good investments. How they are viewed by analysts in the market. What they are trading at (overvalued or undervalued in your estimation and why). What are their growth prospects? What geographies do they serve? What is their revenue mix? What are their greatest risks?
• Have at least 3 questions in hand to ask them about working at their firm. Some good ones: How are deal teams structured here? What is the mix of pitching to live transactions? What is the typical path for Analysts/Associates? What separates a good from a great Analyst/Associate (they really like ambitious people so this type of question so long as you do not come off as arrogant is valuable)?

Questions I Would Ask a Prospective Investment Banker

• Name one company you would invest in and why? Name one company you would not invest in and why? [Expect numerous follow-up questions on these so know these companies cold].
• Explain to me what happened in the most recent financial crisis. Expect this question in most interviews and have a very detailed, thorough understanding.
• Why do you want to work at this firm? Be prepared to discuss how you think they differ from their peers – do your homework on them as well.
• What is the best and worst pieces of financial advice you have ever been given?
• Describe to me the time when you worked as hard as you ever have. Investment bankers, especially junior ones, work grueling hours (often as much as 100 per week), showing you are willing to do this and demonstrating you have worked hard in the past will be important.
• What is free cash flow? Why is it important? How does it differ from EBITDA?
• You may also be asked a question that requires you walk them through the debit and credits resulting from a situation.

Dos and Don'ts in the Interview
Dos:

• Dress nicely. Appearance matters.
• Do all the preparation noted above, you will be surprised how much of it and more is asked of you over the course of the interview process.
• Truly ask yourself if you can handle the great stress and hours of the job and have a deep interest in finance and deals. If you honestly say you can and do, then go for this job with full fervor, they will see this in the process and want you as well. If you do not, this is not an industry to take lightly and I have been exposed to too many people unwilling to do this before and they were very unhappy in banking and soon left.
• Learn as much as you can about finance and accounting in school and research, this will both help you in the interviews and separate you in the job.
• Send thank you notes after the interviews. This diligence is noticed and appreciated.
• If there is a question you really mess-up they will appreciate it if you email them shortly after with the answer. Do not over apologize for the error, you have lots to learn and the job will provide that. They will notice the diligent effort.

Don'ts:

• In the interview itself DO NOT come off as arrogant. That is the kiss of death. Confident but not arrogant.
• I would caution against disagreeing with the interviewer unless you are certain you are correct. Unlike consulting interviews, investment bankers view the process as less of a date than a right and wrong answer. Bankers are proud people that generally do not take well to being questioned.
• DO NOT fake something in your interview. For example do not just pass off that you think the deal will be accretive without knowing what that word means and how to calculate it. Bankers can smell weakness and will likely pounce on it asking follow-up questions that uncover your lack of understanding. Thus, study hard and choose your words and areas of conversation carefully.
• Do not discuss compensation. The job pays well, you already know that.

Selection Criteria

• Grades: Generally each bank has certain target schools that most of their candidates come from. Applications are generally read by those who went to those schools and know good from average grades there well. In particular focus is on accounting, finance, economics and management science courses.
• Extracurriculars: See notation above, emphasis here is on if the candidate has had leadership roles and if the experiences suggest a level of socialism and friendliness.
• Job Experience: Related is better, but the more impressive the better. Bankers are a capable bunch and expect high levels of accomplishment from applicants. If an applicant received top tier ranking in their annual reviews, be sure to note this in your resume as that is an important metric for bankers themselves at their annual bonus reviews.
• SAT , GMAT, GRE test scores are secondary, if you have a great score put it on your resume, it will only help.

Life as an Investment Banker

 

Work generally starts at 8:30am or 9:00am and it is rare for an Analyst or Associate to leave work before 10:00pm. Many days are well beyond midnight, especially if you are in the midst of a live transaction. The busier the group you are interviewing for the longer the hours generally. Smaller shops with smaller and less frequent deals generally have lower hours but also generally lower compensation. The hours for junior bankers tend to get busier after lunch as the Directors and Managing Directors spend the morning generating work for the junior bankers. Travel is frequent but far less than consulting. In general expect a day trip every two weeks at the Analyst level and one day a week at the Associate level (note this fluctuates meaningfully by office geography and firm). The type of work you will be doing will generally take the form of the different types of analysis I noted already above (such as leveraged buyout modeling, equity comparables, etc.). You will spend a great deal of time with those in the class you enter the firm with, especially those in your group. They are going through the exact same hardship as you and you get very close as a result. The good news about banking is that life gets easier at the Vice President level and much easier beyond that point. You then get more control over your hours and what you are working on. However, be prepared for some grueling years before that point.  Article source: InterviewBay.com

Inside Investment Banking (IIB)

If you are eager to apply for investment banking roles, visit the IIB website. It is authored by five young investment bankers who all succeeded to break into investment banking without a degree from Harvard and without an internship from Goldman. They’ve created the IIB website to share their experiences and help others to do the same. Click here to visit Inside Investment Banking

 

Principles for Excelling in Investment Banking

Relationships are Everything. Banking products, like equity, debt and advice, are essentially commodities. What separates one bank from another is the relationships its bankers have built with their clients. Investment banking is a relationship business, where credibility and golf ties make all the difference. At every level, the most respected bankers will be those that have established credibility with their clients.

Don't Lose the Forest for the Trees. Relationships are qualitative. Numbers, though, are the foundation of the advice and recommendations that investment banks provide their clients. Associates and analysts frequently get so carried away with simply finding & collating digits that they forget to check for obvious errors. Computational accuracy is critical to establishing a good reputation as a junior banker.

Deals Count. Getting deals done puts experience on your resume and in your bank's pitchbooks. It also familiarizes you with the processes banks go through to get their product offering to market. Your banking career will be best served by staying close to the deals, and that means aligning yourself with groups and individuals who seem to be deal centers.

Commitment is Critical. Banking is cyclical, and even on specific deals there are bound to be highs and lows. Bankers sometimes get yelled at by clients or snubbed publicly; and junior bankers sometimes find themselves in over their heads with huge deadlines looming. Banks go through bad bonus years. To a greater degree than with other professions, a certain amount of your banking success is dependent on your ability to stick with it through the bad times.

Transition with Care. Moving to another investment bank is an institutionalized practice, with many senior bankers having worked at two to three banks, and sometimes more. There are three good reasons to move: (1) more money, particularly with a guarantee, (2) more reputable bank, or (3) a better fit in terms of industry focus or geographies covered. While these are all good reasons, bankers should take care not to switch too often as frequent moves between banks is not well regarded in the industry.

Investment banking is a challenging career that's well suited for confident, well-prepared people at the top of their game. With these tips, you will be prepared to stay ahead of the pack and deliver enduring value to your employer while earning an excellent living yourself.

How To Build An Investment Banking Career

How to build a banking investment career, including education, training and how to find a job.

Investment banking is deservedly one of the most respected career paths available today. The profession involves challenging work at every level, attracts the highest caliber of employees, and pays top dollar. As a result, the screening system to get a foot in the door is rigorous, and once you've successfully secured an investment banking job, you will find yourself in fierce competition with your colleagues for top bonuses.

Entry Points for Investment Banking Careers

There are three traditional entry points for investment banking careers: as an analyst, as a post-MBA associate, and in one's later career. Let's examine each one.

Every investment bank recruits a large class of analysts each year from the top undergraduate institutions. The analyst position offers an unparalleled degree of challenge and responsibility for young professionals, but the experience typically demands more than eighty hours a week for two years straight. Virtually all analysts are hired directly out of four-year undergraduate institutions. All possess stellar grades, a poised interview presence, and a very timely approach to interviewing and resume preparation - analyst interviewing typically occurs in September and October of senior year.

Investment banks also recruit large classes of associates from top MBA programs. Although a few analysts go on to become associates, the associate position is usually seen as the beginning of the investment banking career path - from associate to vice president to managing director and beyond. Associates assume responsibility for all aspects of investment banking marketing materials (pitchbooks), and deal execution. Virtually all associates are hired from summer associate positions at the same bank - meaning interviews in the first year of business school are very likely to determine job choices later on.

Finally, there are those who join investment banking later in their careers. This is the most cyclical of all investment banking intakes. Some years banks are desperate for people, and other years there are hiring freezes and it is impossible to enter the industry. When opportunity strikes, it pays to be prepared. This means having a resume with significant experience at either a smaller boutique investment bank, or a major commercial bank or asset manager. Furthermore, it means keeping in touch with contacts in the industry so you will know when banks are soliciting resumes.

Once you're in the door, it's time to build your successful interview into a successful career.
Article source: essortment.com

Inside Investment Banking (IIB)

If you are eager to apply for investment banking roles, visit the IIB website. It is authored by five young investment bankers who all succeeded to break into investment banking without a degree from Harvard and without an internship from Goldman. They’ve created the IIB website to share their experiences and help others to do the same. Click here to visit Inside Investment Banking

Ideal Candidate For Investment Banking

One of the most common questions my readers ask is - what makes me an ideal candidate for investment banking? It is obvious that those who don’t have a degree from Harvard or without any intern experience from Goldman may think that they are in a less competitive position.  In fact, it is not.  Some very successful bankers don’t even study finance at college.   And on this planet, there isn’t a degree to train students to become a president.  What make things happen is ‘YOU’.   

I’ve recently clipped this article which should help you gain a better understanding of the business and find out whether you can be an ideal investment banking candidate.  Find out what employers look for and see if you have those qualities.  The article is quite long, here is an extraction. 

Communication Is Key

Investment bankers need to be effective team players with excellent communication skills in order to avoid disconnects and wasted effort. Investment banks communicate with external parties such as clients, accountants, consultants and lawyers. Furthermore, many client representatives tend to be extremely scrutinizing, well-respected and often short-tempered, and you'll need to know how to deal with them…… 

Not Your Average Nine to Five

Due to the long hours involved, work stamina is required. When deadlines approach for deals, consecutive all nighters are a frequent occurrence.  

The late-night hours, client demands and finite number-crunching lead to relatively high attrition and burn-out rates. In many circumstances, analysts will stockpile several bonuses and move on to another career after a few years. The intellectual stimulation and challenging rigors of high-level corporate finance and executive level analyses, however, do provide a context where those who seek to exert themselves can find comfort and satisfaction in a prestigious and lucrative career. The classes of top business schools are dotted with former investment bankers wanting to go back to school to earn master's degrees. The low- to mid-six-figure compensation packages piled up over the years provide ample cash supplies for graduate school. Alternatively, there is an opposing and convincing view that experience counts for more when compared to a graduate degree. 

Rising To The Top

It is common for a rising star to specialize in a particular industry, whether it is in real estate, health care, energy, retail, transportation or infrastructure. As an investment banker progresses throughout his or her career and becomes involved in a multitude of projects, he or she becomes able to quickly apply industry norms, ratios, trends, forecasts and typical performance benchmarks. 

During the first few years, the analyst/associate conducts financial and operational grunt work. An associate's progression to a principal or director role, however, requires a higher level of responsibility in business development, and the ability to generate revenue for the department or firm. Assuming a supervisory role for a project, and becoming the primary contact for clients, along with training and recruiting, are appropriate adjuncts to business development and revenue generation. 

Differentiating Yourself From The Crowd

Investment banks seek high academic achievement, involvement in campus leadership positions, stellar communication skills and internships at well-regarded companies and nonprofit organizations. The applicant needs to be able to convey raw mental and emotional horsepower, a solid sense of direction in terms of goals and objectives and credible step-by-step supporting actions that have been taken to arrive at those objectives.  

Students and young professionals who possess broader or non-business academic curricula, or who worked at nonprofits, traveled overseas, volunteered and who display a burning curiosity and desire to explore this field, should resolve to apply and reapply for investment banking roles. There is a minimum requirement for a basic understanding of finance for your chances to be enhanced. But as long as the applicant conveys authenticity in his or her endeavors and possesses the passion and determination to explore investment banking as a career, an opportunity will often open up. Do not underestimate people's respect and admiration for someone who follows his or her conscience and dreams. Remind yourself that many of the world's most successful business leaders did not study finance or accounting - if they even received a college diploma at all.  

The Bottom Line

Applicants with a true passion for finance, market and organizational analysis should apply and reapply for investment banking roles, conduct self-study on finance, business, management and leadership. They should also secure impressive standardized test scores, differentiate themselves by volunteering or leading groups, and network with current or former investment bankers. If you're an energetic professional with strong valuation skills and the ability to interact with others, this challenging and rewarding job may be just what you're looking for.  Source:  Investopedia

 

Inside Investment Banking (IIB)

If you are eager to apply for investment banking roles, visit the IIB website.  It is authored by five young investment bankers who all succeeded to break into investment banking without a degree from Harvard and without an internship from Goldman.  They’ve created the IIB website to share their experiences and help others to do the same. Click here to visit Inside Investment Banking

Investment Banking Salaries, Jobs, Interviews…Through A Glass Door

Want to look into investment banking through a glass door? Here is an interesting website I want to share with you - GlassDoor.com

What’s interesting is that you can search by jobs, company and reviews, salaries and interviews.  For example, if you are going to interview at Morgan Stanley, then go look up Morgan Stanley and you can view salary by position and location, and the interview notes from other candidates. It’s a good source of reference as all information is input by actual employees and employers. I’m sure you’d love surfing this website.

One disadvantage is that they only provide limited free information. So after a few clicks, you’ll be prompted to create an account. But don’t worry as it’s free to become a member. If you don’t want to take time to register, leave the website and re-enter, then you’ll get anther few free clicks. With the loads of information to get to know about investment banking, it’s really worth it to become a member of the website.

Investment Banking Salaries

Hong Kong Investment Banking Salaries Overtake London

Average base pay for investment banking and hedge fund staff in Hong Kong has shot up by 15 per cent this year overtaking salary hikes in London

Such generous rises highlight the two-speed global economy in 2011 as Asia powered ahead while Europe and the US teetered close to recession.

Analysts in Hong Kong have seen 20 per cent base pay increases while those at “managing director” level have seen raises averaging 25 per cent. Average base pay for investment banking and fund management staff now stands at HK$890,000 (about £74,000).

Equivalent staff in London saw rises of 12 per cent.

Mark O’Reilly, managing director of recruitment firm Astbury Marsden which carried out the research, said: “Investment banking teams operating in Hong Kong have performed more strongly than their counterparts in London and New York in 2011. Generally banks are keener to invest in their teams in Asia than in Europe and the US and that has meant a bigger boost for Hong Kong bankers’ base pay.”

But next year is expected to be tougher as Western banks caught up in the eurozone debt crisis take a more cautious approach to their Asian expansion.

Mr O’Reilly added: “Most of these pay rises will have been agreed earlier this year, when confidence in the banking recovery was strongest, and banks were eager to retain and recruit staff in order to be best-positioned for the expected growth. More recently pay increases have been rarer and more modest.”

Last month John McCormick, RBS chairman for Asia-Pacific, warned that bonuses for investment bankers may be in danger of being clawed bank if the unit performs poorly.

Some banks are actually paring back their Asian headcounts, despite strong growth in the region. HSBC is wielding the biggest axe – cutting 3,000 staff over the next three years in Hong Kong.

Findings from Hong Kong-based headhunters Morgan McKinley show that 35 per cent of financial services firms plan to reduce their headcount within the next six to 12 months.

Another group that has prospered this year are compliance staff. As Hong Kong has expanded its range of financial products the need for greater compliance to monitor these new products has also grown.

Staff working in compliance teams reported pay rises averaging 21 per cent of their salaries. This was more generous than the average 11 per cent pay rises enjoyed by their counterparts in London over the same period.

Article source: The Telegraph, 21 December 2011

Investment Banking Salary 

Current Recruiting Trends and Tips

I had a chance recently to speak with the hiring experts at Street of Walls to get a feel for current market conditions and tips on how to improve your Investment Banking Resume.

Can you discuss current hiring trends?

Hiring has been slowing at most of the large banks over the last 6 months. In fact, firings have become more of the norm. Typically during an economic expansion, investment banks increase the number of analysts as the number of deals increase. Conversely, as the economy slows, those teams shrink, which is what we are seeing today. Due to the current economic conditions such as lower trading volume and slower deal flow, large investment banks have been cutting the size of their investment banking divisions.

Recently we have been seeing massive layoffs at almost every investment bank including Goldman Sachs, Bank of America, Credit Suisse, Morgan Stanley and others.  Banks are experiencing large operating pressures from poor market conditions weighing on M&A, lower trading volumes (analysts estimating volumes down 20% this quarter), and big write-downs in investing and lending. Our sources within the banks are telling us hiring is expected to be down between 10%-20% this year, which isn’t as bad as we feared.

Will an MBA help you get a job in this environment?

We have recently seen a shift in hiring trends where investment banks are hiring equivalent talent at lower compensation levels. This has put excess pressure on recent MBA graduates. So in a sense, yes, an MBA may help you get a job but at a more junior level. Think about all of the talent that is now out there on the street. If you can hire a 3^rd year associate for the same price as a newly minted MBA, why wouldn’t you? That’s the problem. Now, MBA grads are being forced to take jobs equivalent to a 2^nd year analyst.

Along those lines, we are seeing mid-tier investment banks hire 1^st year associates that were recently laid off from bulge bracket banks rather than an MBA candidate. These laid off banker are just glad to have a job, worrying less about overall pay as they survive the current recessionary times.

What would attract the hiring managers' attention most when reading a resume?

We break this down into 3 parts:

1. Pedigree: School/GPA, top tier work experience
2. Wow factor: Have you done something incredibly impressive
3. Diversification and Differentiation: Women, international, ethnicity

Pedigree:

The number one thing that will attract a hiring manager to a resume is pedigree. Think about how a hiring manager gets judged by their boss - you don't get fired for hiring a person who interned at Goldman Sachs, but you could get fired if the guy from the state school turns out to be a dud. If the person was good enough for Goldman, they are probably good enough for you. Of course if you have gone to a top-tier school, you should highlight that on your resume, but it probably won't help as much as solid work experience.

Wow Factor:

Do something to really impress the recruiters and this can supersede a less than top-notch pedigree. A “wow factor” can be something like starting and growing a company with multiple employees selling products or services in multiple states. This example shows a person who can manage personalities by dealing with employees, and a person who is an extreme multitasker.

Diversification and Differentiation:

Be different, don't be a boiler plate. Highlight anything that will make someone remember you.  For example, not many people take the time to give back to the community. If you started/ran a charity or are a frequent volunteer make it known that you are significant contributor. I have interviewed over 1,000 people in the past 3 years and I still remember one candidate who put on his resume that he played golf in Antarctica. In reality he was on a submarine in the navy and they only briefly surfaced in Antarctica, but I still remember the example today.

Private Equity Jobs

Private equity (raising funds to invest in private companies) is a relatively young business however has become of the most well paid careers in the financial field.

A career in private equity (PE) which includes venture capital, PE fund of funds, hybrid funds, and secondary funds can be extremely rewarding. But landing a job in this field can be difficult.

If you're seriously considering a career in private equity, you have to become familiar with how firms hire. Here are a few links that you may want to look at.

PE Recruit – This website offers a free test of your PE skills

PrivateEquityBlogger – This website offers a free PE eBook

PE Jobs Digest – This website offers free PE job listings alert

DreamResume – This website has a team of experienced finance professionals to help write your PE resume with one-on-one support

Related Article
How To Write a Private Equity Resume

Investment Banking Resumes - Private Equity Jobs

How Do I Get An Interview?

Recently I spoke with a few guys at a new start up that focuses on providing young candidates the tools they need to break into Investment Banking. They provide everything from Resume over-hauls, headhunter contacts, recruiter contacts, 60 page Interview Prep Material, Phone Interview Cheat Sheets, Financial Models (DCF, M&A, LBO), and 1-on-1 consultations over the phone. This is very interested information.

Their website is StreetOfWalls.com, and courtesy of our site they will critique your resume for free, simply email them with your resume attached.

Their motto is this: 22 year old investment bankers can make up to $140,000 per year, why not invest $30-50 to give yourself an edge over your competition. These guys not only worked at a large Investment Bank but also were on the recruiting team – they’ve seen thousands of resumes and have interviewed hundreds of candidates. They claim their products are the best and necessary to give you an edge.

If you’re still trying to get into the industry & think Merger Models (picture below) is still rocket science I definitely recommend checking out the website. They’re nice guys and usually pretty quick to respond.

How to Become A Proprietary Trader - V

The Career Path
Let's make one thing clear upfront: the hiring process for traders is highly competitive.

The conventional way of becoming a trader is to become an assistant trader to begin with. In reality, there is no such job as assistant trader. This is really more of a catch-all job title meant to attract interns. The assistant trader is generally responsible for verifying deals and working out problems with the back-office when he has a doubt. He also estimates the P&L (profit & loss statement) and verifies its main items, updates the prices in the morning, answers the phone, updates the spread sheets for pricing and the calculation of present or historic risk, monitors risks and positions, acts as liaison with research and helps provide quotes on big trading days.

In principle, the assistant trader should go on to become a trader, and eventually a proprietary trader, though there is no guarantee. He is unable to get hired into the position straight off. However interns are allowed a measure of freedom including contact and job rotations with traders from other desks.

Another way to become a trader is via the middle and back offices or risk management where the diploma requirements are more easily met. Above all, this path involves accepting a job and making a commitment to work there, typically for a minimum of 3-5 years. That is why age is so important. The younger you enter the field of trading, the better. A new trader must possess a dynamic personality, entrepreneurial spirit, intelligence, ambition and discipline to succeed in the field. In fact, the new graduates and assistant traders have priority over the front- and back-office staff in the scramble for front office positions.

You can take the direct approach and submit your application via the career opportunities page of corporate web sites where you may also find expensively developed training programs for young graduates to become traders, sales people, structuring people and analysts - in short, the firm's future managers.

In any case, landing an internship at the age of 22 is the key to the future, even though the hardest part is yet to come.

Can I be a prop trader if my qualifications are less competitive?
Yes. Provided you are dedicated, chances are there.

Many modestly-sized investment banks and stock brokers, whose profits do not mount into the hundreds of millions of dollars per trader, but offer people with less brilliant diplomas plenty of opportunities. As such, if someone performs well, even in a small company, he has every chance of being recognised and eventually handling more substantial sums, catch the eyes of headhunters and move on to work for bulge brackets. Therefore if you are taking the non-diploma path to success, the earlier you begin to make money, the better your chances for dealing with large funds and being hired by large banks as a prop trader.

What is Required?
Regardless of the path taken, the trader must be able to deal with technical and financial issues. Apart from the university math credentials, the job candidate must also have completed a solid year or two of graduate level finance or at least show a good understanding of economics and finance, a thorough understanding of financial issues, understanding of the main derivatives and the principles for pricing them, an understanding of the fundamental issues in finance and of the operations of the monetary system and the main players in the capitalist system. 

What is the Future?
When the time comes to make a change, a trader will find it hard to make the transition to a new career outside the trading room, given the job's degree of specialisation. Traders after 10 or 20 years of service may choose to retire early. Highly-driven individuals who have made a name for themselves may launch their own investment funds.

Action now
Browse the JP Morgan Intern Opportunities 2011 and go through the resume and cover letter tools in this blog and start your intern role searching. Also visit the career sites in this blog for more intern opportunities.

Download FREE eBook: "The Complete Guide To Day Trading"
If you are serious in a trader's role, better learn something about day trading now. Markus Heitkoetter, a professional day trading coach is offering his ebook for free and he promises to help you to become the trader you want to be.

Investment Banking Career

How To Become A Proprietary Trader - IV

A Day In The Life of A Trader
The daily work of all traders is similar. However there are variations according to the trades they do. Observing a trader at work, you may wonder if the job really warrants all those diplomas and other credentials. After all, it looks simple. Let’s take a look at the daily activities of a trader of any kind before we enter the world of a proprietary trader.

The basic trading job is driven by three factors: information, intuition and technical know-how. A trader keeps his eyes on the eight or nine screens in front of him, such as Reuters or Bloomberg, delivering world news continuously. Apart from the journalist himself, the trader is the second person in the world to get wind of breaking news. He will also observe a flow of scheduled company releases and economic statistics, among other news. There are also audio announcements, often unrelated to the text on the screen, from the trader's dealerboard, the system which connects him to brokers. Reading information takes up 45% of a trader's work day.

In order not to miss any breaking news, a trader seldom leaves his desk. He even minimises his visits to the toilet or Starbucks. As for lunch, he may ask the trading room interns to help buying.

Another time-consuming task involves watching the market and acting intuitively. The trader must make a subjective interpretation of the information they have. He forms an opinion on the market's direction by observing all the signs making up the price action, including price fluctuations and the liquidity of the orderbook. This is a matter of intuition, and it also takes up 45% of his time.

The remaining 10% is spent on market making as to issue quotes to his clients. The trader uses an Excel spreadsheet with the useful "pricer" functions invented for quantitative research, calibrates it to correspond to the market and then pushes the F9 key each time a client asks for a price. This may sound repetitive and boring.

All traders including market makers, plain vanilla securities traders, structured products traders and proprietary traders have similar daily activities. Then what is specific with a proprietary trader?

A Proprietary Trader (or prop trader) has carte blanche to speculate with the investment firm's funds on all markets. Unlike other traders, he does not provide quotes to clients. He also doesn’t need to share the profits with the structuring, sales and research teams. The prop trader only share his portfolio profits with the Bank.

In terms of working hours, a proprietary trader works typical 8 am to 5 pm. However, his work schedule depends mostly on the markets they trade. For example, a New York-based proprietary trader who focuses on Asian financial markets may have to work at night because of time differences. A trader in Hong Kong trading Australia market have to go to the office as early as 6am in order to pick up the latest market news and discuss investment strategies with his team. Nevertheless, be prepared to work long and flexible hours.

Want to become a proprietary trader? I'll talk about career path in my next post.

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If you are serious in a trader's role, better learn something about day trading now. Markus Heitkoetter, a professional day trading coach is offering his ebook for free and he promises to help you to become the trader you want to be.

Investment Banking Career

How to Become A Proprietary Trader - III

Why Does A Proprietary Trader Receive Fat Pay Check?

A prop trader's salary averaging around $68,000 doesn't sound extremely attractive. However when bonues are counted, the figure becomes completely different. Prop traders can take home as much as multi million $ per year. If his portfolios turned out to be profitable, his take-home money could be practically no ceiling. However I’ve seen star traders taking home millions of dollars and also traders who lost their jobs when their portfolios lose money.

Let's look into more details of how a proprietary trader make money for himself and the bank.

A proprietary trader (or prop trader) has carte blanche to speculate with the investment firm's funds on all markets. He doesn't need to provide quotes to clients. With a high-risk job, the prop trader is paid a percentage of the profits. When other traders have to share the profits with the structuring, sales and research teams, a prop trader doesn't.

For instance, a bank transfers $100 million at the beginning of the year to a trader's proprietary account. At the end of the year, if his portfolio grows to $300 million, he will then share a portion of the $200 million profit as his bonus. Hence prop traders are among the highest paid traders however have to be the most experienced kind of trader. They have usually put in ten years in the trading room before assuming this post.

Everything has a beginning. If you want to assume a role in proprietary trading, you usually begin as a market maker who works with basic products, such as spot (currency rates), cash equity and government bonds.

In my next post, I'm going to talk about a trader's job in a trading room.

Investment Banking Career - Proprietary Trading

How to Become A Proprietary Trader - II

Life In A Trading Room

OK, here is a 110+ seats trading room in the real world. A trading room is a restricted area in any investment bank. Only authorized persons can access. I have the privilege to borrow this photo from one of my clients.

If you want to be a proprietary trader or any other kind of trader, consider two things first. These have to come before qualification and experience counts.

Working Environment - Looking at the photo, you’ll see it is a huge room with no partition. There is no privacy at all. What you say on the phone will be over heard by people around you; and what you say on the phone will be recorded. Some banks ban the use of mobile phones within the trading floor. Some encourage you not to use mobile phones.

You need to also consider the noise level. People shout on the phone, because they were excited about a deal or because they couldn’t hear what the other party said due to noisy environment. If you feel comfortable working in a noisy open area without privacy, you meet the first criteria to become a trader.

Taking Risk – Chinese has a proverb ‘create wealth from taking risk’. You need to make quick and important decisions everyday and take risk. If this describes your personality, you meet the second criteria to become a proprietary trader.

I don’t mean to scare you. This is just a beginning. Please make sure you meet these two criteria before submitting a resume targeting for a trader’s role. Want to know more about a proprietary trader’s life, come back to my next post.

Investment Banking Career - Proprietary Trader

How To Become A Proprietary Trader

This is a high-risk job but one of the best paid in the world. See if I can lure you into this job.

You can’t be a prop trader direct from college. You need to spend about 10 years in the trading floor before you qualify for the job. But everything has a start, if you don’t start, you’ll never be there.

Let’s start with the trading room.

First of all, click the link here to gain an idea of a trading room set up.

OK, now you have an initial idea of how a trading room looks like. But those photos are only from a training trading room at Hofstra University. We shall look at a trading room in the real world in my next post.

No matter what kind of trade you are going to do, a trading room is where you need to spend most of your work hours. Do try to get a sense of feeling of working in such an environment.

I shall talk more about how to become a Proprietary Trader in my next post.

Investment Banking Career

Royal Bank of Canada (RBC)

A reader ask me what kind of roles are good for him to start a banking career. Well, it all depend on the person, such as interests and skill sets.

I have a link from the RBC. You simply answer three questions and it will help to find a right fit for you.

• RBC one of the "Best Workplaces in Canada"
• RBC among Canada's 10 Most Admired Corporate Cultures
• RBC recognized as one of Canada's Top 100 Employers for 2009
  

Anna Maria D'Souza's Thought Of The Day

Before you start any banking job search, ask yourself these questions. Do you really know what an ibanker does? Do you know how the life of an ibanker is? It would be good to speak to more people in the business. Get more insights before writing your investment banking resume.

Hire an IBanker to Write Your Resume

Investment Banking Career

Ken Griffin Video

A reader left me a comment and suggested this interesting video about Ken Griffin.

Ken founded Citadel at the age of 22 with $4.2m. He started two funds from his dorm room at Harvard, and he claims that in between classes he would make trades. His first 'seeder' was Frank Meyer of Glenwood Capital who was amazed at Ken's success and his ROI. Frank provided $1m for Ken to invest while Ken was only 19, and the result exceeded his expectation.

Here is a video on Opalesque.tv in which Frank Meyer describes the keys of seeding new managers, as he did with Ken.

Anna's thought of the day:

It doesn't matter how old you are, as far as you are
good at investment and good at making money for yourself and others.

Download FREE eBook "The Complete Guide To Day Trading"
Ken Griffin started day trading when he was at Harvard. Obviously he started early and be successful early. If you want to start now, download this free ebook and become the trader you want to be.

Investment Banking Career

Be a Private Banker in Asia

If you ever fancy private banking be your investment banking career, you might want to consider relocating to Hong Kong. One more senior banker has moved his desk here.

After moving its CEO to Hong Kong in January 2010, HSBC is in advanced discussions to move Chris Meares, the global head of its private bank, from London to Hong Kong.

Apart from HSBC’s senior moves, JPMorgan has just relocated its head of international private banking unit, Douglas Wurth, from New York to Hong Kong in February. “Asia is seeing greater growth in the ultra-high-net-worth space than any other region.” said Douglas.

There are more than 2.4m dollar millionaires in Asia Pacific with a combined wealth of $7,400bn, according to the latest data from Merrill Lynch and Capgemini. The region is forecast to overtake North America as the world’s largest pool of wealth by 2013.


You might want to review my previous post of ‘how to become a private banker’


Investment Banking Interview Guide
Amazing Cover Letter


Doug Wurth - Bio
JPMorgan Private Bank
Doug Wurth is a managing director of JPMorgan Securities Inc and global head of alternatives of JPMorgan Private Bank’s alternative investments group, which supervises over $33 billion in alternative investments including hedge funds, private equity and real estate. Doug is also a director and president of JPMorgan Private Investments Inc, which oversees private investment funds with $5 billion under management. Doug has been with JPMorgan since 1997, when he joined the Bank’s mergers and acquisitions group. He has helped lead the Private Bank’s global alternative investments business while based in San Francisco, London and New York. Prior to joining JPMorgan, he practiced law at the New York firm Skadden, Arps, Slate, Meagher, & Flom, and served as General Counsel to former Senator Robert Dole’s 1996 presidential campaign. Doug holds a B.A. from the University of Notre Dame and a J.D. from the University of Virginia School of Law.



Investment Bankin Career - How to become a private banker

Investment Banking Career Overview

My free ebook has generated encouraging responds. Some readers asked me for additional reading material.

Here is a link for you to access WetFeet’s Investment Banking Overview.

WetFeet has also published a book called Careers in Investment Banking. If you are keen to start an IB career, might get this book for more indepth reading.

Product Description from Amazon

Careers in Investment Banking - In this Insider Guide, you’ll find plenty of research from WetFeet's experts to help you launch your I-banking career. Turn to this popular WetFeet Insider Guide to explore what investment banks really do-forget all the corporate PR. Industry trends and what they mean for today's job seekers. Industry performance and how the major players have fared in recent rankings. Profiles of the leading firms, including financial highlights. Opportunities in corporate finance, public finance, M&A, sales and trading, and research... ...and what people working in each of these areas actually do everyday, in plain English. What insiders consider the pluses and the minuses of an investment banking career, from lifestyle and culture to travel and hours (oh, the hours!). Interviewing tips from industry insiders and recruiters.

Investment Banking Career Overview

Investment Banking Classes

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I just browsed this website with great interest. For those who are not yet hired, but want to pursue an investment banking career, you might want to check out the training classes offered by Investment Banking Institute.

Investment Banking Institute (IBI) employs 10 investment bankers who have worked for some of Wall Street's most respected firms, each having between 5 and 15 years of I-Banking and Private Equity or Hedge Fund expertise. Moreover, each of their bankers have, at some point in their careers, been an instrumental part of the training programs and hiring process in the banks they worked for. I've browsed their bios, and they are well qualified individuals.

THE IBI INVESTMENT BANKING CLASSES ARE APPLICABLE TO THE FOLLOWING FINANCIAL CAREERS:
· Investment Banking (Boutique, Mid-Market, and Bulge-Bracket)
· Private Equity
· Hedge Funds
· Equity Research (Buy-Side and Sell-Side)
· Asset Management
· Corporate Finance and Strategy
· Private Wealth Management

CLASS FORMAT: There are 8 sessions and each is 3.5 hours long for a total of 28 hours of in-class live training. Classes are available in 11 cities in the Americas and 4 in Europe.

What interests me most is one-on-one resume revision and mock interviews with industry professionals (including common interview questions) during and after course completion.

CFA CONTINUING EDUCATION CREDITS
The Investment Banking Institute is registered with the CFA Institute as an Approved Provider of continuing education programs. This program is eligible for 24.5 CE credit hours as granted by the CFA Institute. If you are a CFA Institute member, CE credit for your attendance at this event will be automatically recorded in your CE Diary.

CLASS FEE: ?? I am unable to find out in the IBI website. You might have to email them and check it out.

Investment Banking Classes