When I was involved in hiring in the 90’s and early 2000’s, unless it was a Wharton kid, I generally preferred the engineer, math, physics or econ major over a business/finance major. What finance knowledge they needed to do their job we were going to train them on internally. We wanted kids who had the talent to solve problems, usually involving numbers, and who could communicate well (verbal and written) and work within teams.
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Exactly. How long did it take you to teach a physics major how to do a discounted cash flow analysis? I was a Classics major as an undergrad and learned it in B-school in an afternoon.
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I don’t think anyone believes STEM majors are incapable of learning business functions. Whether they really wish to do so, or will be satisfied in roles requiring them to do so, is another matter also important to hiring companies.
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I think the point is investment banks are looking for the quick and analytical. Just doing finance undergrad does not give anyone more of an advantage in the hiring process. It is all in how one thinks and processes information.
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Absolutely. But presumably if a kid is interested enough to show up at the Dog and Pony presentation (pre-Covid, now on Zoom), AND submit a resume by the drop date, AND show up for the interview- at least that shows a modest amount of interest in a business role. Whether or not the role be satisfying- an open question in the early stages for sure.
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How big is the industry in terms of annual undergrad intake into either the bulge bracket or the boutiques? Do you have a sense of how these numbers breakdown into business majors vs non business majors? Thx.
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Recruiting targets expand and contract. 2007 for example- a big year across the industry. 2008- also a big year, and then POW in October; many new hires had not even started yet when they were being asked to delay their start (all the Decembers) while things shook out. 2009- tiny, and 2010 also small. Hiring didn’t normalize until about 2013.
So I would not describe “an annual intake”. It’s not like U Michigan knowing how many beds they need to fill… it’s supply and demand based on projections around M&A volume, overall state of the economy and how that translates to the business needs, etc.
Thanks. I was just looking for an order of magnitude. 100, 1000 or 5000…
Roughly 100 first year analysts in my daughter’s IB, across all groups.
Thanks.
Of course there are many high finance jobs that arent IB. Private equity, sales and trading, hedge funds, wealth management, treasury and trade finance, the newly glamorous fintech…
At the elite levels, there are mostly kids from T20 schools, only some of which have business majors, so the majors are quite mixed. The non-target kids at my kid’s large BB all have a finance or accounting background. Every one of them.
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The link in post 47 gives you a good order of magnitude.
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While the total number of majors with a non-zero number of persons working in finance is large, there is a strong correlation between major, such that a large portion of econ majors work in finance and only small portion of the vast majority of other majors. Some example numbers from the past 6 Yale classes are below. I am including all students with the listed major, rather than just those working full time. Other groups that are overrepresented among students entering finance include males, athletes, and final clubs members.
Yale: First Destination % Finance by Major
Economics – 41% finance
Math/Stats – 23% finance
Political Science – 14% finance
Engineering – 7% finance
Computer Science – 6% finance
Philosophy – 4% finance
Psychology – 4% finance
Biology – 2% finance
English – 1% finance
= = = = = = = = = = = = =
All Students – 10% finance (14% class of 2021, 9-10% other 5 years)
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Not surprised by athletes. IB is not rocket science whereas persistence, time management and teamwork are important traits for IB that many high level athletes have who can pass the GPA/course rigor threshold.
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The more I look into it the more I find myself interested in a profession such as private equity, sales and trading, hedge funds, treasury and trade finance, etc. I may not pursue the profession of IB, so there is a good chance that if I go to IU I may not even attempt to join the IB workshop. In that case, is the difference between IU and TCU still that large if I’m not interested in IB?
There is only a very small intake into PE directly from undergrad. More of the intake into PE happens through IB, because PE shops want kids to be trained by IB shops before hiring them. For other areas on your list, you don’t need to go through IB.
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For example, for a firm such as Barclays do they typically hire out of undergrad or only take kids coming out of top grad schools?
@Paul45 please see this.
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There are many finance roles other than IB for undergrads. For example, Bank of America and Citibank hire more undergrads for non-IB roles on finance than 1st year IB analysts. Most large corporations have a finance rotational training program for undergrads. Commercial banking and commercial real estate have hired mostly undergrads.
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Here are the questions I’d ask and research I would do.
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What will be the difference in net cost between the 2 schools (tuition, room, board, travel, incidentals less FA grants and merit scholarship)? What will be resulting total debt, your and your parents?
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Ask IU and TCU business programs for outcomes data: % and # of grads obtaining full time jobs in targeted fields within 1 year of graduation, median income, employer names and locations, median GPA of grads getting these jobs
These 2 questions will frame a risk/return picture for you. For example, if IU is over $200k more (and a lot of this in debt) than TCU, for it to be worth considering, the outcomes need to be far superior in terms of job placement, compensation, geographical and industry options. If on the other hand the differential is only $40k, then even marginal but better outcomes may be worth it, especially in optionality of career and geography.
This analysis only gives you a rough idea of probability of outcomes against a “known” cost. There are plenty of TCU grads with much more successful outcomes than IU grads and vice versa. This will be driven by your efforts and a measure of luck, but at least you will get an idea of a range of possibilities vs costs.
It will also be critical to ask where you think you would be more happy, and therefore have a better chance of excelling. Top of your class at TCU will likely offer better outcomes than bottom half of your class at IU.
To answer the question I think you are asking, all things being equal (academic outcomes), I suspect IU will give you better opportunities in all the fields you mentioned, especially if you are looking for a starting job in a major national financial market/firm. TCU will be more than fine if you are happy to stay in Texas, which does have good markets for these types of jobs in DFW, Houston and even Austin.
Based on your question to me and the later question on Barclays, I think you need to do more research on what each of these fields entails. The jobs are all different and require different skills and strengths. The compensation is also very different. Barclays is a huge diversified financial institution. Think of BofA, Citibank, the kind of institution with significant retail, commercial and institutional banking businesses. Plenty of entry level jobs in certain business lines which are relatively easy to obtain while other lines are very selective in who they hire.
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