Want a Career in Banking? Ask a Senior Banking Exec

Career Opportunities & Internships
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The vast majority of banks leverage their commercial lending relationships in the form of RCFs or other lending products into capital markets roles and use these two relationship areas as a platform from which to engage in I bank business. For example BOA or JPM are consistently the lead banks when it comes to corporate lending and consequently they sit at the top of underwriting league tables. They have built out, well established and meaningful i bank franchises based on this footprint. Please note those initial loans are by extension funded by their relatively low cost of funding based on having huge deposit bases.

In terms of traditional I banks like GS or Jeffries they donā€™t have the access to relatively cheap capital (I think this is your reference to GS) because they arenā€™t meaningful retail deposit takers. Their franchises are based on C suite relationships, expertise and often extremely well constructed and professional markets teams.

Career wise, at junior levels the bigger the bank the more these roles are well defined and movement limited. In my earlier post I tried to describe the different roles. In many cases a desire to move within this construct is what causes kids to go for the MBA.

At senior levels these business are all interrelated and contingent upon one another but at junior levels the goal is to thoroughly train the analysts within one spoke of a complex wheel.

I will try again to convey the cycle in an over simplified wayā€¦

1- Retail deposits received.
2- Those funds lent out to corporate customers.
3- Corporate customers reward those lender banks with financial markets business and fees when they access global capital markets.
4- Financing (access and cost) tends to be at the root of most I banking decisions. Consequently 3/4 are an excellent platform to build an i banking franchise.
5- The totality of NIM (net interest margins) on the loans + financial markets fees (transaction and hedging) + I bank opportunities and fees = the total return. This total is compared to the capital used by the customer to derive a ā€œreturnsā€ number and compared to the banks cost of capital to determine profitability.

Sorry for the geeky and simplified explanation but I offer it so that future unfamiliar readers appreciate the interdependence of retail/commercial/I bank.

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@roycroftmom, just to confirm, this AMA is intended for those seeking a career in banking. We had another one hosted by @DadOfJerseyGirl about fintech here: Want a Career in Financial Technology? Ask A Wall Street Exec

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Yes. The roles I described are found in large commercial banks.

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Sorry, I apparently misunderstood your wording as to mean beyond the list you provided. Several of the roles you mentioned I had previously detailed.

Happy to do my best which roles are you looking for?

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For those who start off in IB, but want to segue into other optionsā€¦what are some good options that one could move to given the experience they have as an entry level or even senior level IB person.

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My son graduated college (Hamilton) in 2022. He really wanted banking, but didnā€™t get any internships and nothing panned out after graduation. Heā€™s currently an analyst for an executive compensation consulting firm. He doesnā€™t like consulting and still would like to segue into banking, but heard itā€™s hard to make the jump from consulting to banking. Is this true? Heā€™s trying to network with alumni and figure out how to make the transition. Should he go for an MS in finance? CFA? Wait until heā€™s promoted to Associate? His major was economics. Any suggestions would be helpful.

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Many IB professionals end up going into VC or managing their own funds or into industry. CEO or CFO is a common landing spot for MDā€™s once they decide to get out of banking. Depending of course on how long they stay in banking. Getting those types of positions usually involve developing personal relationships with executives within the various industries.

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Perhaps he could stay one more year in his current position and then get his MBA. He should shoot for a top program since many IB recruit from top 15 schools.

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At junior levels front office banking professionals are taught and acquire a relatively fungible skill set that makes them appealing to numerous industries. They have a tremendous amount of work thrown at them. They must learn to prioritize, be detail oriented, proactive in their thought process and able to perform under stress. Typically they arenā€™t learning industry, sector or client specific information until later in their careers but in the interim they are readily adaptable and great candidates for almost any other industry. I have seen analysts who have done everything from VC, pro sports team, teaching, large corporations etc. They use the two years to ā€œfindā€themselves and figure out what they really want. For some 100 hour work weeks are what they aspired to and they hang in for the payoff of IB but for many they use the experience and credential to recalibrate.

More seasoned bankers typically become well suited for general management, industry specific to their experience. For example you often see experienced bankers go off and work for their clients and or become CFOs within the industry. Sales and trade staff often go to work for investment companies, hedge funds or start their own business.

For both groups I think there are far more options then limitations given the combination of perceived intellectual ā€œpre screeningā€ followed by a foundational skill set leading to in depth knowledge and or relationships within a narrow sector or industry. Good bankers typically can find opportunities although there is significant burnout and every few years managers donā€™t let a good crisis go to waste, and RIF high cost seniors to make room for rising talent.

I will also mention I know several senior bankers who have become teachers in lower socio economic areas or endeavored to give something back. The industry has produced its scoundrels but certainly far more who are appreciative of the opportunities that they have been blessed to experience. Second careers tend to be all over the place.

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Sorry your son isnā€™t enjoying his current role. Undergraduate recruiting is very idiosyncratic so hopefully he hasnā€™t personalized anything.

Unfortunately, (I will be honest) recruiting at junior levels is very defined, structured and calendar driven. Once a kid misses their recruiting window it gets very tough.

His current role would likely serve to suggest his best opportunity in banking to be in the HR dept (given your description). He would still be fairly far removed from where it sounds like he wants to land. Not sure if he has considered this sort of move.

Otherwise he is going to have to be lucky (finding a connection or spotting a job posting and wowing someone) or some other anomaly. Banks just donā€™t typically recruit non bank experience people 2 cycles removed. At this point most fill in vacancies by ā€œstealingā€ analysts from competitors.

In terms of CFA or even MBA they can serve as a reset but also are risky. Both take a lot of time and effort and no matter what he will still be competing with many kids that have gone through foundational training as analysts in the same field he would be targeting.

I donā€™t mean to be negative but set expectations. I would suggest he very actively use every resource available and be hyper assertive in the hopes of finding a sponsor. Learn about the industry, use the current role and contacts, read and consider WSJ and find a a way to stand out. Itā€™s a tough path but not impossible.

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If he doesnā€™t like consulting in general (as opposed to the specifics of executive compensation) then what does he think would be better about banking? Many aspects of the actual work (spreadsheets and slide decks at midnight) are similar, and banking has even longer hours without the travel that can make a junior consultantā€™s life a bit more fun.

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How hard is it to switch from asset management at a top firm to IB? Is the training received and skills gained complementary? Also, IBs seem to come in various sizes and shapes. How is the culture at boutique IBs different than or similar to bulge bracket firms in terms of work schedule and advancement?

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Many of the skills at asset management firms are directly applicable to various I banking teams. The ability to evaluate credit worthiness, asses relative value, execute financial market strategies are all skills that are highly desirable in research, sales & trading, lending and banking. The reality that you are a client of I banks gives you a unique perspective that you can leverage in the way you market yourself. Flip side is you have to be aware the I banks will be cautious to avoid angering a client by stealing their talent.

In terms of different cultures at different I banks they tend to have more in common than differences amongst the bigger shops. Boutiques however all tend to have somewhat unique cultures and reputations based on their founders (often individuals who are still in leadership) and their areas of focus. Some of this dynamic is driven by the firms ā€œeat what you killā€ mindset and or the reality that these firms are often partnerships such that founders money and deal fees are their life blood. In the case of startups the meter is running day one.

I would say the upside both financially and advancement wise at smaller firms tends to be better but they extract their pound of flesh in terms of demands and ultimately pay (and job security) can be very volatile.

Hope this helps answer.

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@Catcherinthetoast Can you give a quick comment a couple of the LACs into banking? There is a specific scenario that doesnā€™t need expansion here but I was wondering about any specific advantages between Middlebury, Wesleyan, and Hamilton for a Math/Econ major. Feel free to PM if more detail helps.

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Trying my best to answer your question succinctly, there would not be a consistent specific advantage to one of these three outstanding schools relative to the others. Any advantage would have to be scenario specific such as an alumni member being particularly active in recruitment or a sports team connection, etc.

All three schools reputation wise produce, smart, well rounded kids and likely are well represented by alum at most banks.

The challenge for the aspiring banker will be to stand out. The schools you mention (+Williams, Amherst, Bowdoin, Bates, Wellesley, Vassar, Swarthmore, Colby, etc) produce a lot of Math/Econ majors who on paper look very similar. This isnā€™t to diminish them (I was one of them).

Many play a sport, have a 3.7 or higher GPA, etc. Often the reality is that extremely impressive and accomplished students like this get passed over for WS jobs. Just like college applications some sort of spike helps.

Examples being an interesting thesis (cap stone) subject, at schools like Hamilton using the flexible curriculum to display academic curiosity, an off the run independent major or minor, sports excellence or leadership, other interests such as drama or fine art, language proficiencies, internships or entrepreneurship during college, community service that is impactful. You want something in a world of amazing kids to make your resume not just amazing but interesting, eye catching and most importantly one that once reviewed the reader says I want to know more about that person.

I know this sounds daunting but it is the reality of the process. The other ā€œsolutionā€ is to work on an alumni network early and vigorously. This approach however is far less in your control and practically doesnā€™t make you a better candidate broadly but it does sometimes work.

Lastly, be aware many large banks have automated first application reviews so including key words, high GPAs, etc is important but for many if not most elite LACs their will be a recruitment team led by alum who will review resumes. Ideally search LinkedIn and send your resume to a human who you have connected with to ensure you get a nuanced review.

Sorry wasnā€™t quick :grinning:

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Is investment banking bad for your health?

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No more so in my experience than other demanding, stressful and highly remunerative fields.

Thanks for contributing.

FYI I donā€™t always agree with TIMEā€¦

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I have one at one of the Boston consulting firms and this is what she sees happening ā€¦ a lot. I donā€™t know what happens after this particular cohort acquire their MBA (the ā€œresetā€ idea), so Iā€™ll defer to @Catcherinthetoast on that point (ā€˜that pointā€™ being that itā€™s risky in that the kid with no previous banking experience is missing the foundational training, and all that implies). It appears to be an excellent platform from which to place into a tippy top MBA program (or PhD, as a lot of kids from my kidā€™s firm go do that too). One would think that if you jump from consulting to a Wharton, Harvard or Stanford and get an MBA that some kind of opportunities in finance will come available. But it may just not be banking at particular firms A, B and C. Worth exploring because itā€™s two years and itā€™s expensive ā€¦ risky, as @Catcherinthetoast points out, if youā€™re doing it for some very narrowly defined reason.

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Agree that there should be opportunities somewhere in finance, the PE firms that I know hire plenty of post-MBA ex-consultants (typically from MBB firms) who havenā€™t worked at banks.

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Well, should we ask if medical residency is bad for your health. It has similar hours, lower pay, and the additional stress of being responsible for peopleā€™s lives.

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