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Your guide to finding a job in securities and banking

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WelcomeWelcome to Careers in Financial Markets and eFinancialCareers.com.

Investment banking is one of the most popular career choices among the very best graduates and MBAs, and competition to secure that all-important first foot on the ladder is intense.

The aim of this guide is to offer you real insights into this multi-faceted field to help you stand out from the crowd. We hope that eFinancialCareers.com will be your online companion as you develop your career.

eFinancialCareers.com serves the global financial community as the Web’s top site for career management and jobs in the securi-ties, investment banking and asset management fields. In addition

to graduate and senior level jobs, eFinancialCareers.com provides premier job market and pay analysis, employment advice and a series of tools to help you maximize your career opportunities.

One such tool for job seekers is our series of careers guides: Careers in Financial Markets U.S. and U.K. editions, and sister publications Careers in Accounting and Finance (U.K.) and le Guide des Carrières en Finance (France). These unique guides profile the current trends, career paths, top players and skills required for the principal financial professions.

If, having read this guide, you’d like to learn more about the industry, conduct some pre-interview research, or simply post your resume for your next job, come and visit us at eFinancialCareers.com.

With best wishes for your future career,

Nicki Gilmour Managing Director, eFinancialCareers.com

Employers DiversityPlanning AheadFinding a JobSectorsOverview Careers www.efinancialcareers.com

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ContentsWelcome 1

Contents 2

How to Use This Guide 3

Overview A Career in Investment Banking 4

Trends: A Cyclical and Highly Competitive Industry 6

Sectors Mergers and Acquisitions 8

Debt and Equity Capital Markets 9

Sales, Trading and Research 10

Alternative Investments 13

Foreign Exchange 14

Corporate Banking 15

Private Banking 17

Operations 18

Fund Management 19

Investment Consulting 21

Private Equity 22

Global Custody 23

Risk Management 24

Compliance 26

Human Resources 27

Legal 28

Information Technology 29

Marketing and Public Relations 30

Ratings Agencies and Information Providers 32

Finding a Job The Recruitment Process: A Survival Guide 34

Interview Insiders: Know Your Q&A 36

Job Offers Rebound for Grads 37

Planning Ahead Voices of Experience 38

Take the Offer and Run 39

How the Right Recruiter Can Push Your Career 40

How to Blow Your Career in 90 Days or Less 41

How to Future Proof Your Career 42

Flexible Working in the Financial World 44

The Global Private Equity Club and How to Get In 46

What it Takes to Make Managing Director 48

Diversity Trends in Diversity: Banks Chase Same Minority Talent 50

Enlarging the Talent Pool: Necessity, Not Luxury 53

Bank Profile: UBS Embraces Diversity at All Levels 56

Culture and Shared Values: Finding the Right Fit 58

Careers Career Path: Merrill Lynch MD, Multi-Product Derivatives Sales 60

Career Path: Sanford Bernstein Associate Analyst 61

Career Path: FWA President and Managing Director, JPMorgan 62

Careers in Financial Markets is published by eFinancialCareers Ltd, www.efinancialcareers.com

Editor: Ian Brown; Assistant Editor: Melissa Donohue; Project Manager & Writer: Lena Quek; Design & Production: Michael Ballou Dudley

Writers: Mark Feffer, Jane Carruthers, Sarah Butcher, Teri Karush Rogers, Tom Groenfeldt, Marcia Stepanek

Additional copies: [email protected] +1 800-380-9040; ©2005-06 eFinancialCareers Ltd; no part of this publication may be reproduced without permission

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Employers Going Global: International Career Options for Graduates 64

Better to Go Bulge or Boutique at Career Start? 65

Employer Essentials 66

Employer Profiles 68

Glossary 72

Future Bankers and the Work/Life Balance Spiderweb 76

How to Use This Guide Careers in Financial Markets is designed to be used in conjunction with www.efinancialcareers.com, where you’ll find up-to-date graduate pay and hiring news, careers advice and employment trends in the financial markets. This guide serves as a grounding in the sectors, entry routes and skills neces-sary for a successful career in this field.

To be credible at interviews, you must know your global custody from your pri-vate equity. That’s why our Sectors section reflects the range of professions and skills needed for each. The Overview section presents trends and career paths across investment banking and the securities industry as a whole.

In Finding a Job, you’ll find the tips you need to land that first job, while our Planning Ahead section explores ways to take you to the top. Careers profiles some of the players in the financial markets; Employers outlines the main insti-tutions looking to hire the best talent.

This year’s issue also features a Diversity section that examines how and why banks are seeking to improve on their diversity efforts.

I hope this guide will inform and inspire you for your future financial career.

Ian Brown Editor, eFinancialCareers.com

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Careers in Financial Markets 2005-06

Employers DiversityPlanning AheadFinding a JobSectors CareersOverview www.efinancialcareers.com

04

A Career in Investment BankingFrom analyst to managing director – the ‘typical’ investment banking career

Whether you join a large investment bank or a small boutique, you’ll en-counter roughly the same retinue of job titles, in the same order of importance.

Analyst An analyst is the lowest position of all, and what graduates become when they join. In investment banking speak, analyst is simply another way of saying trainee.

What analysts do vary from division to division. In corporate finance,

analysts are hardworking number-crunchers who put together pitchbooks (company and sector research that help banks win bids for business) and analyze a company’s financials. In sales, analysts telephone relatively unimportant clients on non-crucial matters. On the trading floor, analysts can’t trade until they’ve passed their regulatory exams, and even then are heavily constrained until they’ve proven they’re not going to press the wrong button and lose millions.

At most banks you’ll be an analyst for three years. The bank then decides whether or not to renew your contract, and you have the option of whether or not to stay on. So what does it take to move up to the next rung? An analyst being considered for promotion should demonstrate an aptitude for leadership, the ability to present his or her point of view persuasively, whether contrary or not, and an understanding of both clients’ and the firm’s needs and motivations.

Associates The next rung on the ladder, associates are analysts who have made the grade, or business school students who joined after studying for a Masters in Business Administration (MBA). Associates typically manage and allocate work to their own team of analysts.

Expect to be an associate for another three years before moving up to the next rung – vice president.

Vice Presidents At this level, life starts to become exciting. The title sounds daunt-ing, but don’t be deceived: Vice presidents (VPs) are plentiful at any large investment bank.

As a VP in corporate finance, you’ll manage the day-to-day affairs of the associates and analysts under you and you’re more likely to have frequent contact with clients. If you work in sales, trading or research, you will likely have your own book of customers, more flexible trading risk parameters, or your own list of companies to research. Because sales people and traders work on their own to make money, an exceptionally talented VP on a trading desk could

potentially make more than a managing director.

You’ll typically work as a VP for three years, but you could be one for much longer, as VP can be a more difficult career transition point. VPs who fail to progress at one bank tend to move to another one, where they can join at the next rank up: director or executive director.

Director or Executive Director By this point, the top rungs of the ladder are within your grasp. Directors and executive directors (the titles are used interchange-ably) are the right-hand men or women of the real big-wigs of the investment banking world, managing directors. In corporate finance, executive directors help managing directors handle relationships with client companies. In sales and trading, directors have bigger and more important clients to call and ever larger trades to place.

Managing Directors You’ve made it! Managing directors (MDs) sit at the upper echelons of the banking hierarchy. They typically make the most money, have the biggest offices and command the most respect. MDs are the rainmakers – they deal directly with clients and bring in business.

As with any pyramid structure, very few people who started out as analysts will make it this far. At one large U.S. bank, only 6%-8% of directors are promoted to managing director each year. Goldman Sachs, for example, has roughly 1,000 MDs for 20,000 employees.

At the end of the day, individual performance, revenue generation, and client service are paramount to moving up the investment banking ladder. If you progress smoothly, you can become an MD by the time you’re in your early 30s.

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Global graduate careers

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Trends: A Cyclical and Highly Competitive IndustryOpportunities and volatility abound across financial services

If you’re looking for a slow and steady career where you progress predictably up the corporate ladder and pocket an engraved watch when you retire, the financial industry is not for you.

A career in investment banking follows a path something like the lifecycle of a butterfly: You’ll have to do your time as a grub (analyst/associate) before you morph into a triumphant winged creature (managing director). Successful managing directors earn fortunes and can retire young, but the unsuccessful at any level are crushed early on. And throughout your life, your career is susceptible to fits and starts, depending on the phase of the economic cycle.

The financial industry is both highly competitive and highly prone to the ups and downs of the global economy. There are few other industries where tens of thousands of graduates apply each year for just a few thousand places and where you can make millions by your mid-30s. At the same time, few organizations are as ruth-less as investment banks and securities firms at downsizing when business stalls.

Only the Best Succeed (and Get Big Bonuses)Investment banks pride themselves on being meritocracies.

This means two things. First, you won’t move up – or keep your job – unless you’re very good. Following annual talent reviews, firms like Goldman Sachs regularly cull 5% or more of their worst-per-forming staff. Goldman Sachs’ Business Principles, listed on their corporate website, state: “We offer our people the opportunity to move ahead more rapidly than is possible at most other places. Advancement depends on merit and we have yet to find the limits to the responsibility our best people are able to assume.”

Second, you won’t become a multimillionaire unless you also bring in millions of dollars of revenue to the firm and land a big bonus. Most investment banks cap salaries at around $250,000 and bonuses for top performers add hundreds of thousands, or even millions more, to annual salaries.

“Financial service firms have suppressed salaries in favor of performance-related bonuses for the last twenty years,” says Alan Johnson, a New York-based expert on investment banking pay structures. “If you’re a senior person, less than 20% of your pay is base salary, and the rest is down to performance. At junior levels it’s likely to be 50-50.”

Hiring and Firing The potential to be paid phenomenally well is the upside to a career in finance. The downside is the risk of losing your job.

Financial companies have a reputation for hiring wildly when things are good and firing just as wildly when things are bad. The

rash of layoffs in the years after 2000 followed a manic hiring spree in the late 1990s. In 1996, for example, worldwide head-count at Goldman Sachs was 6,000; by 2001 it was 25,000, and by 2004 it was down to 20,000. Merrill Lynch reduced its headcount by 24,000 in two years in the early part of the decade and as of 2004 had 48,100 employees worldwide.

Those going into the business should be aware that the industry has a flexible approach to recruitment. To avoid being left high and dry, would-be investment bankers should develop strong transferable skills relevant to other industries or sectors. Working for companies with established brand names also helps build a more impressive resume, leaving you better placed to find a new job when necessary.

Graduate Recruitment: A Variable Flow The industry’s flexible approach to hiring extends to graduate re-cruitment. When times are hard, companies might cut recruitment to little or nothing in some divisions. When times are good, there’s a graduate hiring bonanza.

The best known hiring spree was in 2000, when financial com-panies dramatically increased their hiring and boosted pay by as much as 50% in an effort to compete with dot-coms. Over the next two years, graduate vacancies fell 25% and students found it increasingly hard to secure jobs.

The good news is that by mid-2005, things were looking fairly promising for graduates. In late 2004, business schools reported that investment banks and management consulting firms were more aggressively recruiting MBA graduates in comparison to prior years. Several banks are expecting to increase their 2005 intake by around 30%. Whether or not this trend holds true for 2006 remains to be seen.

Hot SectorsBearing in mind the roller-coaster nature of the financial business, it’s worth giving some thought about where you want to work. Fixed income? Equities? Corporate finance? Choose carefully: You’re not just selecting a job, you’re positioning yourself in an industry where some sectors are healthier than others.

Ted Moynihan, a partner with management consulting firm Mercer Oliver Wyman, lists two factors to consider when choosing where to work: the economic cycle and a sector’s long-term growth prospects.

“Different points of the economic cycle will favor some divisions above others. However, several areas of the financial services in-dustry are benefiting from underlying structural growth, regardless of the point in the cycle,” he says.


06

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07


Which are the areas currently experiencing either long term or structural growth?

Structured Products This is where demand for people is hottest right now – and it’s likely to remain this way for the foreseeable future. Structured products are complex derivative instruments based on underlying stocks, bonds, currencies or assets. At their most simple, they might be futures, in which a buyer acquires the right to purchase a financial product at a specified future date and a specified price. A more exotic structured product might be first-to-default baskets, which allow buyers of protection to hedge themselves against market-to-market risk as well as broader default risk.

As a rule of thumb, the more complex the products, the greater the demand for employees, both those who can work on existing products and develop new ones. Most banks are interested in hiring structured product specialists. According to Forbes.com, “the most sought after candidates at banks are people who specialize in de-rivatives and other structured products, as well as merger advisors.”

Recruitment is being driven by the pursuit of better investment returns: Equity markets have performed poorly in recent years, and debt products haven’t been great either. Derivatives based on underlying debt and equity products have been one of the only ways for investors to achieve high rates of return.

If you ultimately want to work with structured products, you should train in a sales, trading, or capital markets role. If you go into opera-tions, you could also end up clearing and settling derivatives trans-actions. Traders who work with structured products will typically need a Master’s degree, or even a PhD, in a mathematical subject.

Leveraged FinanceRecruiters also report a rash of interest in leveraged finance specialists. Leveraged finance refers to debt raised by companies typically considered below investment grade by ratings agencies like Standard & Poor’s (see the Ratings Agencies and Information Providers sector profile for more detail). Leveraged debt is typically secured against a company’s assets. Leveraged finance teams in investment banks help put the debt package together.

Demand for leveraged debt is high and there are lots of jobs avail-able. Unfortunately, most positions require a few years’ experi-ence. If you want to break into this sector, you should start out in credit analysis or corporate banking. Accountants can also move into the sector.

Compliance Another area of persistent hiring is compliance. Greater scrutiny

by the world’s regulators is prompting securities firms to hire more staff to help keep their departments on the straight-and-narrow.

Marie Rice, a senior consultant at Jay Gaines & Company, Inc., a Manhattan-based financial services recruitment firm, says that compliance is definitely a growing sector. “Not only is there a premium for compliance people now, the job of compliance is getting bigger,” she says. “The market is demanding, more than ever, people who can sort through the complexity of the law and translate that into the specific initiatives across the corporation.”

Firms such as Goldman Sachs and UBS run graduate training programs for compliance specialists. Other routes into the area include law or working in the regulatory division of a large ac-counting firm.

Private Banking Private banking is also looking like a growth sector.

“Wealth is driving demand for brokers in the U.S. market,” says Harry Pilkington, a search consultant at Armstrong International who covers the U.S. market out of London. “Merrill Lynch, UBS, Deutsche Alex. Brown, Smith Barney - all the big brokerage houses are hiring.”

Strong demand is pushing up prices. Private client brokers are typi-cally paid 30%-40% of the fees they generate. This can amount to $2 million or more. To encourage top people to join, Pilkington says some houses are offering upfront payouts equivalent to a year’s commission.

If you want to go into private banking, try to start in a bank like JPMorgan or Goldman Sachs, which are known for training private bankers. Or you could complete a few years’ training as a corpo-rate financier, capital markets banker or fund manager and then move across departments.

Hedge Funds Finally, despite the tribulations surrounding recent poor returns and fund closures, the hedge funds sector is still fairly hot. You might not be able to go in as a fund manager, but there’s plenty of demand for people to work in hedge fund risk management, compliance, or information technology.

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Employers DiversityPlanning AheadFinding a JobOverview CareersSectors www.efinancialcareers.com

08

Mergers and AcquisitionsBig deals, long hours and lots of travel… oh, and lots of money

Definition and TrendsMergers and acquisitions, or M&A, specialists travel the world, earn millions, and work on deals that reshape entire industries.

Strictly speaking, it would be more accurate to talk of MA&D than M&A. As well as mergers in which two companies join as equals, and acquisitions in which one company buys all or part of another, M&A bankers also work on disposals, helping client companies sell all or part of their businesses.

Most large banks only become involved in deals worth at least $150 million. Lower value transactions, worth $20 million to $150 million, are typically handled by the M&A divisions of accounting firms.

M&A deals are hard work. The people involved often work days, nights, and weekends, and are at their clients’ beck and call. Once a deal is underway, junior bankers can expect to be kept very busy assembling the reams of financial information and legal documen-tation required for its completion.

Nevertheless, M&A is very popular with graduate applicants. In 2004, for example, 30% of graduate applicants to JPMorgan wanted to work in M&A, which accounted for just 16% of the bank’s openings.

Roles and Career PathsMergers and acquisitions is an advisory role, with M&A bankers providing advice to client companies on all aspects of buying, selling, and merging with other companies. They are typically part of a broader corporate finance advisory team, which also advises client companies on how to raise the money needed to finance a transaction.

As a rule of thumb, the more senior you become in M&A, the more contact you will have with clients. As an analyst, or junior banker, you will spend a lot of time working on pitchbooks. These are documents outlining a bank’s ideas for a particular transaction (e.g. should the client buy company X or company Y and, if so, how should the deal be financed?).

Analysts in the M&A division usually conduct basic industry research for the pitchbook and build the financial models used to price the companies concerned. Associates, who are one level higher than analysts in the banking hierarchy, oversee analysts’ work and check that their models are correct.

A further rung up, vice presidents oversee the work of analysts and associates, and often ask for the pitchbook to be partially or completely rewritten, even if it means staying up until the early hours of the morning making last minute changes. Vice presidents report to directors and managing directors who own the client relationship, meaning they are the main point of client contact.

It is usual for pitchbooks to come to nothing. Clients may decide not to go ahead with the suggestions, or they may engage a rival bank. However, when a pitchbook elicits a positive response, the M&A team moves into execution mode – seeing the deal through to completion.

Skills and Qualities• Appetite for hard work

• Analytical ability and statistical aptitude

• Team-working prowess

• Good communication skills and self-confidence

• Strong attention to detail

U.S. Announced M&A 2004

Advisor Value $bn No. of deals

JPMorgan 270.8 137 Goldman Sachs 258.8 153 Lehman Brothers 241.7 114 Citigroup 205.4 162 Morgan Stanley 158.3 140 Merrill Lynch 134.9 84 Lazard 131.6 60 UBS 89.8 95 Credit Suisse First Boston 88.8 115 Deutsche Bank 74.7 71

Source: Thomson Financial

Pay: Mergers and Acquisitions

Role Salary Range ($)

Analyst 55k – 75k + Bonus Associate 75k – 85k + BonusVP 100k – 125k + Bonus

Source: Wall Street Options, LLC

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09

Debt and Equity Capital MarketsThe ‘factory floor’ of the financial markets

Definition and TrendsCapital markets divisions are where traded financial products are born. Bankers here produce the core financial products for companies and institutions looking to raise money. The two main products are stocks, traded on the equity capital markets (ECM) and bonds, traded on the debt capital markets (DCM).

Stocks, also known as shares or equities, are bought by investors who then share in the profits of the company through dividends. If the price rises, they can sell them on to other investors at a profit; if it falls, they might sell them at a loss.

Bonds are a form of debt. Like equities, a company or a govern-ment issues bonds to investors in order to raise money. At some designated point in the future, the issuer promises to pay the bondholders back. Since bonds can also be sold on to other investors in the bond markets, the bondholder who is eventually reimbursed is likely to be totally different from the original buyer.

Until the redemption date, the bondholder receives interest pay-ments from the company in payment for the service of lending the money. Because these interest payments take the form of a fixed cash sum paid at regular intervals, bonds are known as fixed income products. Similarly, the bond markets can be known as the fixed income markets.

As well as simple equities and bonds, capital markets divisions also issue more complex products, such as equity-linked products, or bonds which can be converted into equities at a pre-arranged price, and derivatives.

ECM divisions and DCM divisions have traditionally been separate businesses. Over the past two years, however, a trend has emerged for banks to combine them into a single division.

Both types of markets grew during 2004. Companies raised 400% more money by listing their shares for the first time, known as initial public offerings or IPOs, on stock exchanges. Bond issuance rose by a more modest 15%, but high yield bonds, which are riskier and so offer a higher rate of return, rose more dramatically.

Roles and Career PathsIf you work in a capital markets division you could do anything from originating, to structuring, or syndicating.

Origination specialists are usually senior capital markets bankers. It’s a job that involves a lot of travel: Originators spend their time meeting clients in an effort to gain insight into their financing needs, and persuade them to offer up their business.

By comparison, structurers are distinctly desk-bound. They spend their time creating complex financial products to suit a company’s financing needs as communicated by the originators.

It’s up to the people on the syndication desk to ready the market for the sale. They calculate the best price range for the product concerned, assess demand for the product, and make sure the correct documents are in place.

Skills and Qualities• Analytical ability and statistical aptitude

• Awareness of how markets work

• Strong communication skills

• Ability to manage multiple projects

• Perseverance

Global Debt, Equity & Equity-related Issues 2004

Bookrunners Proceeds $m No. of issues

Citigroup 534.5 1,892Morgan Stanley 413.5 1,334JPMorgan 385.8 1,492Merrill Lynch 374.3 1,564Lehman Brothers 369.6 1,292Credit Suisse First Boston 362.4 1,359Deutsche Bank 334.8 1,299UBS 299.6 1,175Goldman Sachs 285.9 855Banc of America Securities 203.7 780


Pay: Debt and Equity Capital Markets

Distressed Debt / Equity Research Salary Range ($)

Analyst 55k – 75k + BonusAssociate 85k – 100k + BonusVP 100k – 140k + Bonus



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10

Sales, Trading and ResearchFortunes are won and lost trading in the secondary markets

Definition and TrendsEvery day, millions of financial products are traded in the second-ary markets. The secondary market provides a marketplace for traders to buy and sell financial products subsequent to original issuance. This is distinct from the primary market where brand new financial products are initially issued. Salespeople, traders, and researchers advise on and carry out secondary market trading.

Sales Salespeople spend their time working the phones. They call clients from the moment the financial markets open to the moment they close, as well as several hours before and after. Clients are gener-ally high net worth individuals, pension funds, and institutional investors. Salespeople take orders for financial products, which they communicate to their traders who buy the products on the financial markets.

Salespeople have to be charming and persuasive. Clients often need to be encouraged to purchase particular products, and salespeople might just as easily call them up for a friendly chat to discuss events in the market as to plug 20,000 shares in a particu-lar company or the latest government bond.

In between salespeople and traders exists a hybrid: the sales-trader. Like salespeople, sales-traders call clients to recommend securities. Like traders, they can also trade the securities once a sale has been made.

Trading Traders are the people who actually buy and sell products on the secondary markets. They make snap decisions worth millions and can make substantial profits in the process.

If you work as a trader, you’ll have to get up before dawn to be at your desk when markets open. The rest of the day is spent sitting before an array of computer screens in the company of scores of other traders on the trading floor. The screens are a window onto the financial markets and show movements in the prices of stocks, bonds, commodities, and other financial products, as well as real-time news and research reports. At the touch of a button, traders can buy and sell the products whose prices they’re tracking.

Trends in trading teams’ profits and hiring differ with each financial product. Traders in fixed income, or debt, products in particular, if anything, are on a bit of a roll. Since 2000, banks have derived an increasing proportion of their profits from trading complex fixed income derivatives and proprietary trading. How-ever, traders working with simple equity products are increasingly being replaced by electronic systems, which can do their job more quickly and efficiently. In June 2005, for example, Goldman

Sachs fired 30 equity traders in New York as it prepared to boost electronic trading.

ResearchThese days, researchers exist for the benefit of salespeople. Researchers produce written reports on topics like trends in the share prices of particular industry sectors. Reports are read by salespeople who then use the information to make investment recommendations to clients.

Researchers spend their time scouring companies’ balance sheets, talking to company directors, and participating in conference calls where companies discuss their annual results and future expecta-tions for performance. Researchers also analyze interest rates, economies, and other areas that could provide insight into the proper valuation of different financial instruments.

Researchers have had some bad press in recent years. In 2002, Eliot Spitzer, the New York State Attorney General, imposed fines totalling $1.4 billion on 10 U.S. banks following accusations that they produced biased research in favor of their corporate finance clients. Two well-known researchers, Henry Blodget of Mer-rill Lynch and Jack Grubman of Citigroup, were barred from the securities industry for life.

Following the Spitzer investigation, the linking of research to use of banks’ other services has been banned and research houses independent of the banks have sprung up as a result.

As researchers are no longer involved with bringing in lucrative business to the corporate finance department, they are paid less and fewer of them are employed. One researcher who recently lost his job said the sector was likely to remain down for at least five years. He says research was being battered by a combina-tion of falling commissions and rising compliance costs. “For the moment, it’s the end of equity research as we knew it. But, at some stage, fund managers will realize that performance is under pressure without specialist research. At that point, they will start paying again,” he says.

Roles and Career PathsTraders, salespeople and researchers can be categorized according to the products they trade, by the types of clients they sell to, or by the sector they specialize in. For example, a trader might trade for-eign exchange derivatives or corporate bonds, a salesperson might sell equities to pension fund investors, and a researcher might specialize in analyzing the stock price of oil and gas companies.

In addition, there are two fundamental types of trader: proprietary traders and flow traders. Most traders are flow traders who buy and sell financial products on behalf of the bank’s clients. Sales-

EFC_CIFM_090605.indd 10 9/6/05 8:53:04 PM


11

people tell flow traders what clients want to buy and sell; flow traders tell salespeople whether a particular trade is possible at a particular price.

Once a client agrees to buy at a price quoted to them by the sales-person, flow traders are obliged to make the trade at that price. If they don’t act quickly, and the price rises, they will have to sell the products to the client at a loss. If traders buy at a price lower than that quoted to the client, the firm makes a profit.

While flow traders trade on behalf of clients, a handful of elite traders trade on behalf of the bank. These are the proprietary trad-ers. Proprietary traders can make huge profits but can also make considerable losses. Advancement in sales and trading is all about performance.

Skills and QualitiesSales

• Outgoing and self-confident

• Ability to grow and maintain client relationships

• Excellent communication skills

• Ability to understand complex products

Trading

• Passionate about financial markets

• Work well under pressure

• Think on your toes

• Math aptitude

Research

• Innovative and decisive

• Ability to assimilate information and take an original view

• Excellent communication and relationship skills


Pay: Sales, Trading and Research


Sales associate 55k – 75k + BonusJunior trader 55k – 65k + BonusResearch analyst 55k – 75k + Bonus



2003 Leading U.S. Institutional Sales Firms

2002 2003

Source: The Institutional Investor Research Group

4 1 Bear Stearns

6 2 Lehman Brothers

2 3 Smith BarneyCitigroup

3 4 Goldman Sachs

5 5 Merrill Lynch

7 6 Morgan Stanley

8 7 UBS

1 8 Credit SuisseFirst Boston

10 9 JPMorganSecurities

11 10 Sanford C. Bernstein

12 11 Prudential EquityGroup

9 12 Deutsche BankSecurities

13 13 Banc of AmericaSecurities

15 14* Robert W. Baird

20 16 Legg Mason

11.44%9.35% 10.89%9.20%

9.46% 10.62%

9.09% 9.91%9.08% 9.23%

8.47% 8.57%

7.56%4.65%

6.52% 11.56%

4.15% 4.20%

4.04%3.82%

2.90%2.61%2.82% 4.45%

2.17%2.03%

1.08%0.92%

1.05%0.56%

EFC_CIFM_090605.indd 11 9/6/05 8:53:05 PM

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Alternative InvestmentsAlso known as the mysterious – and megabucks – world of hedge funds

Definition and TrendsConsidered the ‘maverick’ outsiders in the financial services world, most hedge fund managers are highly successful former traders or fund managers who’ve decided to go it alone.

The name ‘hedge fund’ comes from the idea that money manag-ers can hedge their bets to ensure they make money no matter whether the market goes up or down. For example, a fund that invests in shares of company X risks losing out if the share price falls. To offset this risk, it might buy an ‘option’ giving it the right to purchase a particular quantity of company X shares for a particular price at a particular point in the future.

If the option to buy is set at a low enough price, the fund will profit even if the share price itself has fallen: it can buy the shares at a price below the market price and sell them on again, thereby recovering the losses on its initial investment.

In reality, hedge funds aren’t the only financial institutions to employ hedging – banks do it every day. What really distinguishes a hedge fund from a traditional fund manager is its willingness to push the boundaries of normal investment techniques to achieve unusually high returns.

Most hedge funds follow a particular investment strategy. The most popular strategies are:

• Short selling: Short sellers borrow assets that they believe are overvalued and sell them. When the price falls, they buy the instrument at a lower price and deliver it to the lender.

• Global macro: Instead of focusing on movements in particu-lar stocks, global macro funds focus on worldwide trends.

• Event-driven: Managers using this strategy aim to profit from one-off events, such as mergers and acquisitions or bankruptcies.

Because hedge funds are considered risky, investors can also put their money into ‘funds of hedge funds.’ These invest money across several different hedge funds, with the intention of spread-ing the risk.

During the past few years, the hedge fund industry has enjoyed a period of impressive growth. But despite strong year-on-year growth, more recently, hedge funds have been declining. Accord-ing to Tremont Capital Management, a provider of information about the hedge fund industry, new money invested in hedge funds fell 35% in the first three months of 2005, to $24.6 billion globally.

Roles and Career PathsJobs in hedge funds tend to fall into four categories:

• Analysis: Analyzing the companies, markets and financial products a hedge fund invests in

• Sales and marketing: Liaising with investors and helping sell the strengths of the fund

• Trading: Executing the investment strategy, buying and selling financial products according to analysts’ recommendations

• Risk management and back office: Settling trades, working out a hedge fund’s risk exposure and making sure everything flows smoothly; in many small funds this is outsourced to prime brokerage divisions in investment banks

Most roles are quite distinct – if you join as a risk manager the chances of graduating to become an analyst are slim. However, it’s not unknown for analysts to become traders.

The bad news is that hedge funds rarely take graduates fresh out of school. Most are small organizations without the time or resources to train graduates themselves. Instead, they prefer to hire them away from investment banks.

Skills and Qualities• Math aptitude

• Adaptability

• Creativity


13

Pay: Alternative Investments

Role 0 – 2 years 2 – 4 years 4 – 8 years ($)

Fund manager 70k + B 100k + B 150k – 200k + B (%)Research analyst 70k + B 120k + B 150k + BMarketing executive 70k + B 75k + B 125k + B


Hedge Funds (%) A percentage of the buy side trading profits are paid to the hedge fund portfolio manager who is responsible overall for a trading strategy. The percentage in terms of dollars can range from nothing to six, seven or eight figures. The majority of hedge funds charge customers a 2% management fee and about 20% of profits. “B” equals Bonus.

Top 10 U.S. Hedge Funds Ranked By 2004 Return

Fund Name Return (%) Assets $mMagnet Fund 245.34 8.90Tradewinds Russia Partners 90.75 69.00Westcliff Energy Strategy 88.17 12.30JK Navigator Fund 80.25 229.10Accessturkey Fund 79.82 37.60Tradewinds Fund 76.39 27.00Firebird Global Fund 68.66 234.60Park Place Columbia 68.03 N/ALake Street Fund 61.10 13.97Schultze Partners 59.84 39.00

Source: CISDM database/MarHedge

EFC_CIFM_090605.indd 13 9/6/05 8:53:05 PM



14

Foreign ExchangePlacing bets on the course of currency markets is not for the faint-hearted

Definition and TrendsThe foreign exchange (Forex or FX) market involves converting one currency into another and predicting changes in exchange rates based on global events. FX salespeople and traders aim to profit from currency-price fluctuations.

Anyone who has lost money by buying a foreign currency before going on vacation, only to find its value falls before they arrive and spend it, will appreciate the need to keep an eye on the value of currencies. Banks and their clients face a similar problem but to a much greater degree. If you’re a U.S.-based company that owns hundreds of millions, or even billions, of euros, you stand to lose hugely if the euro drops even minutely against the dollar.

Working in foreign exchange means predicting whether one currency will fall (depreciate) or rise (appreciate) against another. If depreciation is forecast, salespeople and traders will advise clients to sell that currency and buy the one that’s appreciating instead. It’s a simple variant of the “buy low, sell high” maxim of financial markets.

The trading of currencies themselves is known as the spot market. However, a lot of the products bought and sold in foreign ex-change markets are not actual currencies themselves but bets on the future direction of foreign exchange price movements known as futures. Futures fall into a class of assets called derivatives: contracts whose value is based on the performance of an underly-ing financial asset, index, or other investment.

The big story in FX markets over the last few years has been the weakness of the dollar, which lost ground consistently against the euro from mid-2002 to March 2005. Since then, the dollar has been regaining lost ground as the U.S. Federal Reserve raised interest rates, making it more attractive for international investors to hold dollars, but it’s uncertain whether or not this trend will continue, especially during the seasonal year-end dollar weakness.

Roles and Career PathsRoles in the world of foreign exchange are much the same as in the sales, trading and research area, with the qualification that you will be trading currencies and their derivatives instead of corporate and government bonds and equity products.

FX trading jobs are usually split between vanilla trading, where products are simple and trades are easy to execute, and more complex, exotic derivatives trading. Sales jobs in foreign exchange (as in other product areas) are usually divided between different client types, with some salespeople specializing in hedge funds and others selling only to companies.

Researchers produce written reports used by the salespeople to keep clients informed of what’s happening in the FX markets. If

you work with FX derivatives, you could also become a structurer, assembling complex exotic derivative products for clients.

Skills and Qualities• Understanding of geopolitical events and macroeconomics

• Quick thinking with a good awareness of how markets work

• For FX derivatives: reasonably strong math aptitude

• For structurers: patience and communications skills

Pay: Foreign Exchange

Role FX Trading Salary Range ($)

Associate 1–3 years 75k – 100k + Bonus VP 3–5 years 100k – 125k + BonusDirector/Head of desk 150k – 200k + Bonus


FX trading (sell side) pay is based on product sold (commissions generated). A discretionary bonus is paid out at year end based on sales performance.

EFC_CIFM_090605.indd 14 9/6/05 8:53:06 PM


15

Corporate BankingJobs may be folding as more consolidation is in the cards

Definition and TrendsCorporate banking is a broad term given to the different banking services that large companies, governments, or other big institu-tions need in order to function from day to day. It spans the rela-tively simple business of issuing loans, to more complex matters such as helping to minimize taxes paid by overseas subsidiaries, managing changes in foreign exchange rates, or working out how to finance the construction of a brand new theme park.

If an organization is exporting overseas, corporate bankers might also arrange a process of international payment or put together ‘trade finance’ packages to ensure the company is paid by its foreign customers.

In many cases, there’s an overlap between corporate banking and capital markets. Bankers working in capital markets help compa-nies raise money by issuing equities or debt. Corporate bankers typically help clients raise money through loans. But corporate bankers will bring in the expertise of their capital markets col-leagues if necessary.

Increasingly, corporate banking also requires an understanding of complex financing methods, such as securitization, in which a company sells bonds based on the money it will in earn in future from assets like rented shop space or a back catalogue of 1970s disco music.

Longer term, the big news in the corporate banking sector is con-solidation. In the past five years the sector has changed consider-ably as participants look to become bigger to better compete.

Roles and Career PathsDifferent banks do things differently, but if you opt for a career in corporate banking, you may start out as a credit analyst. Credit analysts spend their time looking at companies’ balance sheets and working out whether it’s a wise idea to issue loans to them, just in case they can’t pay them back.

From being a credit analyst you could progress to being a relation-ship manager responsible for lending money to a handful of the bank’s customers. It’s a job that requires an intimate understand-ing of the company’s strategy and a strong appreciation of the risks of default.

If you aren’t interested in the relationship management side of corporate banking, you could always go into treasury manage-ment. Treasury managers help companies cope with their cash flow. They ensure that companies have enough money to pay for whatever they need to buy and help them deal with fluctuations in the value of their foreign currency holdings.

As well as frontline client-facing jobs, corporate banking also has a variety of operational positions, including technology and human

resources. Various banks offer training in corporate banking, including Citigroup, Goldman Sachs, UBS, and HSBC.




• Demonstrable drive

Pay: Corporate Banking


Credit analyst 75k + B 85k + B 100k – 150k + B Relationship manager 75k + B 85k + B 125k + BTreasury/Cash manager 75k + B 85k + B 90k – 120k + B


“B” equals Bonus


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17


Private BankingFor financial markets diplomats with in-depth product knowledge

Definition and TrendsAs their name suggests, private bankers help very rich people manage their money in private, far away from the prying eyes of paparazzi and other interested parties.

The clients of private bankers can be anyone from chief executives to property tycoons, investment bankers, professional athletes, pop stars, or members of privately run family businesses. They all have one thing in common: they are extremely wealthy. Private banks typically look for clients with at least $1 million to invest, but many only deal with clients whose financial assets are worth more than $30 million.

The main role of a private banker is to help clients manage their money by helping them invest wisely while avoiding risks that might reduce the value of their assets. They also offer tax and pension advice, help clients develop a strategy for philanthropy, and advise them on estate planning.

As the array of potential investment products widens, the job of a private banker is becoming increasingly complex. Private bankers need an understanding of financial products from basic stocks and bonds to complex financial derivatives. An increasing proportion of their clients’ wealth is now also invested in hedge funds.

At the same time, rich people are getting richer, and business is booming. A study by the Scorpio Partnership, a wealth manage-ment consulting firm, found assets managed by private banks rose 13.1% in 2004 to more than $6 trillion worldwide. Profits rose by an average of 24% over the same period. Not surprisingly, this has been mirrored by a surge in hiring.

Roles and Career PathsIf you work as a private banker, you can expect to work in one of three areas: investing money for existing clients, building relation-ships, or managing back office functions such as human resources and accounting.

People working on the investment side of private banking either in-vest their clients’ money themselves or offer their clients detailed advice to help them invest their own money. They are typically product specialists who are expert in a particular asset class.

People working on the relationship side are essentially sales-people who spend their time building connections with clients and selling the bank’s services. This can involve a lot of traveling and close contact with interesting, unusual, and demanding people. When a relationship private banker has established a client’s needs, investment specialists are brought in to put a more detailed solution together.

A decade ago, most private bankers combined the investor and relationship role. In some organizations, they still do. But in most

banks, investors and relationship managers are now separate – another sign of the industry’s growing complexity.

Firms such as Goldman Sachs, HSBC, and UBS run graduate training programs for private bankers. If you don’t find a place on a graduate training program, it’s often possible to move into private banking with a background in corporate finance or, more particularly, fund management.

Skills and Qualities• Discretion and trustworthiness

• Excellent customer service skills

• Knowledge and understanding of financial markets

Global Private Banking Managed Assets 2004

Institution Under management $bn

UBS 1295.53Merrill Lynch Global Private Client Group 1030.00Credit Suisse 528.73JPMorgan Private Bank 304.00Deutsche Bank 195.11Citigroup Private Bank 182.00HSBC Private Bank 178.20Dresdner Private Banking 158.27ABN Amro Private Banking 156.91Wachovia Wealth Management 147.00

Source: Scorpio Partnership

Pay: Private Banking


Relationship officer 125k – 150k + BonusInvestment analyst/advisor 65k – 85k + Bonus


EFC_CIFM_090605.indd 17 9/6/05 8:53:07 PM


OperationsThe unsung, and largely hidden, heroes of investment banking

Definition and Trends The operations division is also known as the back office. Unlike the traders, salespeople, bankers, and corporate financiers of the front office, people working in operations don’t work with custom-ers to generate revenues and profits for the bank. Instead, the operations division is a support function. Operations professionals support people in the front office to make sure everything works smoothly and the firm gets paid.

The business of operations covers everything from information technology to human resources, accounting, and risk management. Its functions are so broad that operations specialists typically specialize in only one of these areas. At its core is the function of clearing and settling trades.

Clearing trades involves looking at the records made by the bank’s traders when they buy and sell financial products and checking that they match the records kept by people from whom, or to whom, the shares were bought or sold (the counterparties).

People who work in settlements ‘settle’ trades, or ensure the stocks or shares bought and sold by the bank’s traders are exchanged for the correct amount of money. Settlements cover everything from preparing the documentation required for a sale to making sure the bank has been paid for all the shares it has sold and has paid for all the shares it has bought.

The operations division may not be where banks make their prof-its, but it is certainly where they can lose them. The more efficient a bank is at conducting its business, the greater the percentage of revenue that will be fed into the bottom line.

Banks have realized this and are now looking for a higher caliber of employee to work in operations. At the same time, banks are shifting simple elements of the operations function to lower-cost locations like India, China, Russia and even Scotland.

The move offshore has been paralleled by increased use of technology. Twenty years ago, clearing and settle-ments were labor-intensive businesses involving a lot of forms and enormous filing systems. Today, they are largely processes dominated by computerized settlements facilities that transfer financial products electronically. Settlement systems such as CHIPS, Fed-wire, and Depository Trust and Clearing Corporation (DTCC) hold securities in electronic format and transfer them from one owner to another automatically.

None of this bodes particularly well for jobs in opera-tions, which are taking a hit as processes are elec-tronically streamlined and business moves overseas. The good news, however, is that the jobs left behind tend to be more interesting and higher paid.

One area of operations is hedge fund operations, or ‘prime broker-age.’ Prime brokers are the back office for hedge funds, offering everything from clearing, settlement and custody facilities to help in managing relationships with investors and raising new funds. Prime brokers are a lucrative role in large investment banks.

Roles and Career PathsToday, roles in clearing and settlements are typically for exception managers. Exception managers deal with occasions when data on the electronic systems don’t match up and try to work out the rea-sons for the discrepancy. If you work as an exception manager you might find yourself talking to traders who claim to have sold shares for $3 each when the buyer says the agreed price was only $2. You could also find yourself chasing payment from a recalcitrant overseas buyer for a trade that he or she denies ever took place.

Electronic systems have vastly increased the speed with which simple trades are processed. But derivative trades are often too complex to be settled electronically and tasks are still done manu-ally. Trades are often confirmed still by fax, for example. The large number of documents required for derivatives transactions creates roles for documentation specialists.

Whether you work with derivatives or not, most operations jobs also have a strategic element. Banks use operations staff to analyze ways of making processes more efficient, and project managers implement their suggestions. The more senior you become, the more likely you will work in this kind of strategic or project management role.

Skills and Qualities• Deal with conflicts firmly and efficiently

• Strong analytical and problem-solving skills

• Attention to detail

• Good organization and time-management skills


18

Pay: Operations


Associate 85k – 100k + Bonus Manager 125k – 200k + BonusDirector 150k – 300k + Bonus


EFC_CIFM_090605.indd 18 9/6/05 8:53:08 PM


19

Fund ManagementA game of patience, profits, and pension funds

Definition and Trends Fund managers are professional investors. They invest money on behalf of their clients, which can include pension funds, insur-ance companies, unit trusts (institutional investors), and other repositories of cash, with a view to making it grow. They take a long view, buying financial products in the hope their value will rise over time.

There are two basic kinds of funds. Passive funds, which are also called ‘index trackers,’ track a financial index. The investment deci-sions of passive funds are typically made using computers.

While passive fund managers let computer programs do the leg-work, active fund managers actively buy and sell financial products. Active fund managers correspond to most people’s idea of what fund management is. They invest in products which they hope will rise in price over time in order to sell them later at a profit.

Funds invest in everything from stocks, bonds, or real estate, to commodities such as oil, wheat or aluminium. Different types of clients can tolerate different amounts of risk, so fund management companies usually run several different funds at a time. Some offer fast growth but big risks; others offer slower growth and aim for less risk.

Most large investment banks have their own fund management divisions and, in many cases, they are not doing particularly well. Citigroup is selling its fund management division after it gener-ated just 1.5% of its profits. Deutsche Bank sold a major part of its U.K.- and Philadelphia-based Deutsche Asset Management busi-ness to Aberdeen Asset Management in June 2005 after senior staff left and clients started withdrawing money.

Roles and Career PathsFund managers focus on the business of managing. If you aren’t interested in being a fund manager, you could work as a fund management marketer, research analyst, or an operations expert.

Fund management marketers wine and dine potential clients in an effort to persuade them to invest money in their fund and manage relationships with existing clients. They also meet investment consultants and play a role in the development of new products.

Analysts working in fund management help steer fund managers in the right direction when it comes to choosing assets to invest in. They spend their time analyzing companies’ results and meet-ing with companies’ senior management to discuss strategy. They then write lengthy reports communicating their conclusions.

Like their counterparts in investment banks, operations staff work-ing for fund managers do everything from working in information technology to settling and reporting trades, project management and customer services. However, many funds have outsourced the

administrative aspects of their operations to global custodians.

Skills and Qualities• Understanding of how the financial world operates

• Ability to assimilate information and pick out key points

• For researchers, an inquiring mind

• For marketing experts, excellent communication skills

Pay: Fund Management


Fund manager 75k + B 85k + B 150k + BResearch analyst 75k + B 85k + B 125k + BMarketing executive 75k + B 85k + B 90k – 150k + B




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Investment ConsultingStrategic advisors to fund managers and scrutinizers of them

Definition and TrendsInvestment consultants advise pension fund trustees on what to do with their money. They help trustees decide the proper asset allocation and with which fund management firms they should invest their money. In the process, they look at fund manager track records and try to predict how they will perform in the future, knowing that strong returns over the past decade are no guarantee that the same fund won’t fall in value in the next twelve months.

To avoid turbulent stock markets, many investment consultants have advised clients to switch money away from equities into bonds and higher risk alternatives such as hedge funds. Hedge funds aim to produce positive returns in both falling and rising markets.

Some of the larger investment consulting firms include Watson Wyatt, Mercer, Wilshire Associates, Frank Russell Co., Callan Associates, BARRA RogersCasey, Evaluation Associates and Capital Resource Advisors. Each hires an average of six to 12 new graduates per year.

Roles and Career PathsJobs in investment consulting usually fall into one of two main categories: asset allocation and fund selection.

Asset allocation specialists advise clients whether to invest in equities, bonds, private equity funds, or alternative asset classes in order to generate the returns they require to pay pensions over the next thirty years or more. It is a complex role that involves examin-ing economic factors such as interest rate changes, as well as the timing of the pension fund’s liabilities, or pay-outs, and the likely risks and returns associated with each type of asset. To help them, asset allocation specialists create mathematical models that fore-cast how a client’s money should be divided among asset classes.

Fund selection specialists spend much of their time analyzing indi-vidual fund managers and asking questions about their investment strategy. They scrutinize particular funds and author reports on their strengths and weaknesses. Most investment consulting firms produce confidential lists ranking each fund manager according to their likely success going forward.

Within fund selection and asset allocation, there are also roles for relationship specialists, who are the true consultants of the investment consulting world. While many asset allocation and fund selection specialists work in research, and specialize in a particular type of fund or investment product, relationship special-ists are usually generalists. They are often more senior – staff in investment consultancies typically begin their careers in research and move into client facing roles as they gain more experience.

Most large investment consulting firms take on graduates. After

entering investment consulting you will typically go on to gain a pro-fessional qualification, such as a Chartered Financial Analyst (CFA).




• Powerful reasoning skills


Pay: Investment Consulting

Experience Salary Range ($)

1 – 2 years 75k – 85k3 – 4 years 85k – 100k5 – 7 years 100k – 150k


EFC_CIFM_090605.indd 21 9/6/05 8:53:09 PM



22

Private EquityYou’ll need a few years’ experience or an MBA to make it into this sector

Definition and TrendsLike the capital markets divisions of investment banks, private equity funds raise money for companies in need of cash. But while capital markets bankers do this by selling a company’s stocks or bonds, private equity funds do it by offering cash to companies in exchange for an ownership stake. As a result, they become co-own-ers, or even sole owners, of the companies in which they invest.

In the ideal situation they invest in an underperforming company, turn it around, and sell their stake at a profit some years later. Sometimes private equity companies engage in ‘asset stripping,’ or breaking a company up and selling its assets separately to make a profit.

The money invested by private equity funds is frequently used for management buyouts (MBOs), where a company, or a division of a company, is bought by its managers. Alternatively, it may be used for a management buy-in (MBI), where managers from outside take over a company.

Venture capital and private equity are often used interchangeably. But strictly speaking, venture capital refers to the funding of new and developing businesses, while private equity is more usually associated with MBOs and MBIs.

The private equity industry is booming due to the lack of trade buyers, and the relative ease with which private equity companies can sell their investments at a profit. Trade buyers usually bid against private equity funds to buy underperforming rivals, but recently have been doing that less.

Roles and Career PathsPeople who work in private equity can make huge amounts of money. They also benefit from the kind of job security most invest-ment bankers can only dream of. But don’t count on finding a job in the industry easily: private equity funds hire very few juniors, and

they hire almost no one straight out of college (See The Global Private Equity Club and How to Get In article on page 46).

There are two main entry points to a career in private equity: two to three years after graduation and after spending time working in an investment bank or management consulting firm, or immedi-ately after graduation from an MBA program.

Junior staff at private equity funds are typically number-crunchers who analyze the companies in which the fund is thinking of invest-ing. The next rung in the hierarchy is made up of principals, who determine whether an investment deal is worth pursuing and, if it is, doing anything from arranging the right legal documentation to negotiating the right price to ensure the deal takes place.

Originators are at the top of the private equity tree. They are usu-ally the fund’s partners, who, as the title suggests, originate deals. They then oversee the deals, and make the most money if one of the fund’s investments is sold at a profit.



• Confident and outgoing


Pay: Private Equity


Analyst 55k – 75k + BonusAssociate 75k – 85k + BonusVP 100k – 125k + Bonus


PE Firms Ranked by Capital under Management 2004 – Excludes Funds of Funds

Rank Firm Name Size ($m) No. of Funds

1 The Carlyle Group 26,492.3 342 Goldman Sachs 25,637.2 153 Blackstone Group 19,066.5 114 Kohlberg, Kravis, Roberts 15,066.7 35 Oaktree Capital Management 14,284.2 156 Bain Capital 14,164.2 177 Warburg Pincus 13,810.0 58 Apax Partners Worldwide 13,056.6 119 DLJ Merchant Banking Partners 12,498.2 1110 PAI Partners 12,473.9 5

Source: Thomson Financial Venture Economics/NVCA

EFC_CIFM_090605.indd 22 9/6/05 8:53:09 PM


23

Global CustodyThe guardians of the world’s financial markets

Definition and TrendsBefore computers existed, global custodians had gigantic filing systems for their core work – storing certificates of stock and bond ownership for their clients. Today, certificates related to asset ownership are stored electronically, making the business of custody much less space-intensive.

Custodians look after these assets, charging a fee of typically up to 0.08% of the assets they’re managing for the service. Global cus-tody is a big business. The total value of worldwide custody assets is $65 trillion according to globalcustody.net, a specialist website.

The bad news is that custody fees are under pressure as everyone competes for the same business. Custodians are increasingly branching out into more lucrative businesses, such as securities lending and risk measurement.

Small custodians lack the manpower and technological wizardry for these higher margin activities and are gradually being sub-sumed into bigger players as a result. In October 2004, Citigroup purchased ABN Amro’s direct custody, securities clearing, and fund services businesses in some European and Asian markets for an undisclosed sum. This followed numerous other instances of consolidation, such as Deutsche Bank’s sale of its large global custody business to State Street in 2003.

Roles and Career PathsMuch of the work is administrative and repetitive, but the role of custodian has widened to include a range of other services. These include income collection (e.g. collecting dividends from clients’ investments); performance measurement (calculating the returns clients’ investments have made over a period of time); and proxy voting on behalf of clients at shareholder meetings. However, custodians typically specialize in a particular area, so what you do exactly will depend on where you work.

Corporate action professionals normalize and consolidate cor-porate announcement information – generally referred to in the industry as scrubbing – to inform clients about important events at companies which could impact the value of the shares they hold.

If you work in fund operations, you might for example, be asked to record and monitor the investments made by fund management clients, or to work on clearing and settlements. Staff in clearing and settlements ensure the contracts and payments are in place following a trade made by a client. Similar to operations staff working in investment banks, fund operations staff in custody houses look out for so-called ‘exceptions’ when trades have not been settled properly, and try to resolve any problems.

Custodians also offer more client-focused and technical jobs. Relationship managers, for example, work with clients to reassure

them that their assets are safely maintained. Graduates may start out in corporate actions or settlements and move into other positions after a few years. Few global custodians offer structured graduate training programs.

Skills and Qualities• Strong communication, presentation, and selling skills

• Organized and process-driven


Banks by Global Custody Assets Worldwide 2004

Provider Total assets $bn

JPMorgan 10,154The Bank of New York 9,859Citigroup 6,640BNP Paribas Securities Services 3,397Mellon Group 3,259Northern Trust 2,700UBS 2,652Société Générale 1,518Investors Bank & Trust 1,470RBC Global Services 1,355

Source: globalcustody.net

Pay: Global Custody


Corporate actions 75k + B 85k + B 85k – 125k + BFund operations 75k + B 85k + B 85k – 125k + B




EFC_CIFM_090605.indd 23 9/6/05 8:53:09 PM



24

Risk ManagementRisk managers act as a brake on a bank’s risky activities

Definition and TrendsRisk managers make sure that investment banks are not overex-posed to plummeting stock markets and prevent huge loans from being made to companies on the verge of bankruptcy. Risk manag-ers also ensure that business continues as normal in the event of computer system failure or a terrorist attack.

Market risk, also known as systemic risk, is the risk that a whole group of traded financial products (e.g. stocks, bonds, or commodi-ties) will fall in value simultaneously. Market risk is caused by out-side events, such as rising oil prices, terrorist bombs, earthquakes, or sudden hikes in interest rates.

Credit risk is the risk that a particular company or an individual will default on its obligation to repay its debts. Credit risk is becoming increasingly more complex as new credit derivative products mean that banks can trade the risk that a company will fail to repay a loan. If the customer defaults on the loan repayments, whoever bought the credit default swap has to repay the remainder to the bank.

Operational risk is the risk that something might go wrong in the day-to-day running of the bank, while reputational risk, sometimes considered a sub-sector of operational risk, is the risk that some-thing will happen to damage a firm’s reputation. Following a succes-sion of financial scandals in the collapse of Enron and Worldcom, banks are increasingly sensitive to reputation management.

Roles and Career PathsPeople who work in market risk are typically situated on, or close to, the trading floor. Market risk specialists use mathematical value-at-risk (VaR) models to work out the maximum amount of money the bank would lose in the case of a particular event. They also work closely with traders to calculate the risk associated with specific trading transactions.

The people in credit risk analyze company balance sheets and meet with company directors to determine the organization’s financial health. By comparison, operational risk experts review the likelihood of particular risky events taking place and formulate plans in case they do.

Reputational risk specialists attempt to present the bank’s best side in public. Few banks employ reputational risk specialists per se; the role is typically dealt with by the public relations depart-ment, the human resources department, or by the legal team.

If you want a career in risk management, it’s a good idea to join a bank’s graduate training program. At some banks, risk manage-ment training is covered by the IT or operations department. However, Deutsche Bank and UBS are among the banks offering risk-specific training to graduates in 2005.


• Strong skills in mathematics and finance

• Good problem-solving and decision-making abilities

• An understanding of the bigger picture

Pay: Risk Management


Operational risk 65k – 75k + B 75k – 85k + B 100k – 125k + BMarket risk 65k – 75k + B 75k – 85k + B 100k – 125k + BCredit risk 65k – 75k + B 75k – 85k + B 100k – 125k + BReputational risk 65k – 75k + B 75k – 85k + B 100k – 125k + B



EFC_CIFM_090605.indd 24 9/6/05 8:53:10 PM

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26

ComplianceThe internal watchdogs of the banking world

Definition and TrendsIf you want to work in the compliance area of an investment bank, you’ll need a healthy respect for rules and regulations. Compliance professionals ensure banks operate within the rules set by govern-ment regulators.

As well as interpreting the complicated and ever-changing exter-nal rules that regulators lay down, the compliance function creates a system of rules to apply those regulations internally. Compliance then communicates those internal rules to the bank’s employees and works to enforce them.

In the U.S., the primary regulatory body for financial markets is the Securities and Exchange Commission, or SEC. The SEC’s main goal is to protect investors and maintain the integrity of the U.S. financial markets.

At an investment bank, the compliance function is usually split into teams. These include money laundering specialists, training specialists, monitoring specialists, and advisory and product specialists.

Money laundering regulations have been tightened considerably in the aftermath of the terrorist attacks of September 11, 2001. The U.S. passed the Patriot Act to impose new anti-money laundering requirements on financial institutions. The European Union broad-ened its existing money laundering regulations in June 2003.

Roles and Career Paths Jobs in compliance vary depending on the area in which you work. If you opt for money laundering, you’ll spend your time on the lookout for suspicious transactions. For example, if someone pays cash for a very large quantity of bonds, it’s likely to warrant your attention, particularly if that person or organization has never dealt with the bank before. In the U.S., money laundering officers report to the Financial Crimes Enforcement Network (FINCEN) of the Department of the Treasury.

The job of compliance training specialists focuses on internal control. While money laundering teams are identifying financial fraudsters, training specialists preach the compliance message to the bank’s employees. They create and present training courses explaining what the rules and regulations are, and why it is that bankers need to follow them.

Monitoring specialists look out for infringements of rules and regulations that suggest employees are up to no good. Tradition-ally, in the realm of junior compliance staff, much of this role has been taken over by computers. Computers can monitor billions of email messages per day and can spot unusual activities such as dormant trading accounts that suddenly come back to life.

Compliance advisors interpret regulations and apply them to particular business areas and products. An increasing number are product specialists who offer advice on particular types of finan-cial products. Product specialists sit on or near the trading floor. They tell traders whether or not a particular trade can go ahead, and suggest alternatives that will still be satisfactory to the client. Compliance advisors need to know a lot about trading and about the products they’re advising on. Some are ex-traders.

Compliance-specific graduate training programs used to be rare, as were entry-level jobs. The good news is that some banks now offer dedicated compliance training, and more are likely to follow.

If you don’t get onto an investment bank’s compliance training program, there are a few other options. One is to train with the SEC, which has training programs. Another is to work for the compliance consulting arm of a Big Four accounting firm, such as PricewaterhouseCoopers or KPMG.

Skills and Qualities• Self-confident and assertive

• Competent understanding of legal issues

• Methodical

Pay: Compliance


Monitoring specialist 55k – 70k + B 70k – 80k + B 80k – 125k + B Money laundering 55k – 70k + B 70k – 80k + B 80k – 125k + B Training specialist 55k – 70k + B 70k – 80k + B 80k – 125k + B Advisor 55k – 70k + B 70k – 80k + B 80k – 125k + B



EFC_CIFM_090605.indd 26 9/6/05 8:53:10 PM


27


Human ResourcesThe ‘people people’ of investment banks

Definition and TrendsThe human resources (HR) department is responsible for the peo-ple issues that arise in an investment bank. This means everything from hiring, firing and paying people to implementing workplace policies on diversity, discrimination, and employee monitoring, as well as managing disciplinary cases.

The mantra of HR professionals? “People are an organization’s best asset.” This is particularly relevant in investment banks, where the difference between a good employee and a bad employee can mean millions of dollars. Hiring trends at invest-ment banks also tend to reflect the markets: The industry has a reputation for bulking up when times are good and laying off large numbers when times get tough.

Most banks have changed the structure of their HR departments in recent years, outsourcing much of the peripheral HR activity. Questions about compensation and benefits or employee relations, which used to be dealt with by HR people in each banking divi-sion, are now often dealt with centrally through call centers. As a result, there are fewer HR people inside banks, and those that remain face increasing pressure to become more of a ‘strategic partner,’ understanding and advising on crucial business matters like reward policies and retaining top staff.

Roles and Career PathsJobs in HR departments usually fit into one of five categories: employee relations, recruitment, compensation and benefits, train-ing and development, and ‘generalist.’ A new ‘diversity’ category is also emerging as people working in HR are also entrusted with nurturing a workforce that includes ethnic and minority groups.

Another area of HR that is growing, as a result of increasing employment legislation, is the employment law field, with growing demand for professionals with a mix of HR and legal training.

Finding a job as a graduate trainee in the HR department of an investment bank is no easy task. Few banks offer HR traineeships, and those that do usually offer no more than two or three places. Rothschild, Citigroup, UBS, and Goldman Sachs were among those recruiting for HR in 2005. JPMorgan Chase recruits HR staff for its operations program, which also covers roles in finance, audit, and marketing and communications.

If you don’t find a job as a trainee, you have other options in the field. Because banks train so few HR staff themselves, they often recruit HR expertise on the open market. Former HR staff from Time Warner, General Electric, and Pepsi-Cola can all be found working in banks.

If you’re interested in working in recruitment specifically, it can be useful to first gain experience with a recruitment firm that

helps investment banks find staff. Recruitment firms fall into two categories: ‘contingent’ and ‘retained.’

Contingency recruiters only get paid for their work if their clients make a hire. In comparison, search firms are often retained by banks, meaning they are paid a fee irrespective of whether they find anyone.

International contingency recruitment firms such as Badenoch & Clark, Robert Walters, and Michael Page run graduate training programs. To be a recruiter at a search firm, you will usually need previous experience. But search firms such as Russell Reynolds, Korn/Ferry, and Heidrick & Struggles employ bright graduates as researchers and train them to become search consultants.

Skills and Qualities• Broad range of interpersonal skills

• Intuitive reasoning

• Good judgment

• High degree of self-motivation

Pay: Human Resources


Associate 80k + BonusVP 100k – 150k + BonusHead of HR/Director 125k – 200k + Bonus


EFC_CIFM_090605.indd 27 9/6/05 8:53:11 PM



28

LegalFrom internal control to M&A advisory, calling all lawyers

Definition and TrendsBanks are large and complex organizations, and most of their activities have legal implications. It is up to the legal department to ensure that all the contracts signed by the bank are watertight, that the bank fulfils the commitments to which it is contractually bound, and that lawsuits are avoided.

Thanks to banking scandals and hefty fines from regulators, banking lawyers have come into their own in recent years. For example, who would expect to find a lawyer heading a Wall Street firm? Look no further than Chuck Prince at Citigroup. Prince, the bank’s former chief legal counsel, was promoted to chief executive in 2003, just after Citigroup was forced to set aside a massive $1.2 billion to cover the costs of litigation related to Enron and biased equity research.

Roles and Career PathsAs a banking lawyer, you may specialize in the legal complexi-ties of merger and acquisition (M&A) deals. Alternatively, you could find yourself working on the trading floor, or with the capital markets teams. Usually, there is also a team of lawyers working in a central legal office dealing with issues such as discrimination claims and major litigation.

M&A work can involve everything from preparing the documents expressing one company’s intention to buy another to conducting due diligence on the company under consideration.

If you work on the capital markets team you’ll deal with the legal complexities surrounding the issuance of new financial products. In addition, lawyers ensure that the information provided by a company preparing to list on the stock exchange is correct and within the law.

Trading floor lawyers advise on the legality of trades and deal with the documents required to buy and sell financial products. By determining which trades can and can’t go ahead, trading floor lawyers play an important role in the development of new complex derivative products.

Few investment banks train lawyers themselves. It’s usually necessary to obtain legal training elsewhere. This typically means working for one of the major law firms.

Skills and Qualities• Ability to assimilate information and pick out key points

• Very strong interpersonal and lateral thinking skills



Top Law Firms for M&A Deals 2004

Legal advisor Value of total deals $bn Market share (%) No. of deals

Sullivan & Cromwell 230.4 30.8 95Simpson Thacher & Bartlett 213.3 28.5 85Wachtell Lipton Rosen & Katz 210.1 28.1 42Skadden, Arps, Slate, Meagher & Flom 199.0 26.6 131Latham & Watkins 134.7 18.0 156Fried Frank Harris Shriver & Jacobson 128.7 17.2 51Dewey Ballantine 105.0 14.0 63Debevoise & Plimpton 104.1 13.9 54Cleary Gottlieb Steen & Hamilton 98.8 13.2 48Davis Polk & Wardwell 97.1 13.0 68


EFC_CIFM_090605.indd 28 9/6/05 8:53:11 PM



Information TechnologyThe banking division that is increasingly being outsourced overseas

Definition and TrendsIf you work in the information technology (IT) department of an investment bank, you’ll be responsible for the web of technology that underpins any large modern financial organization. Firms use computers for just about everything: communicating with staff, storing information on clients, and running complex computer models to price and trade financial products. They are known for having some of the world’s cutting-edge computer systems, especially for their trading floors, where financial products and commodities are bought and sold electronically.

IT spending has risen slowly in recent years because of an increase in cost. In pursuit of lower costs, growing numbers of banking IT jobs are being outsourced to low cost locations such as India and China. Plenty of banks have offshore activities already. JPMorgan, for example, has an outsourcing agreement with Wipro Technologies, an Indian IT vendor, which developed an operational risk management system for the bank. Deutsche Bank operates an Indian subsidiary, Deutsche Network Technologies.

Deloitte Research, a division of the accounting firm, forecasts that by the end of 2005, financial services organizations worldwide will shift billions of dollars of their cost base to India for a substantial annual savings. Does this mean fewer IT jobs in investment banks in the U.S.? The answer is, undoubtedly, yes. As many as 3,000 IT jobs at Wachovia may migrate to India, for example, while ABN Amro is reportedly cutting 5,000 European technology jobs.

The good news is that banks will still need plenty of people in western financial centers to liaise with overseas employees. Ac-cording to technology research company Forrester Research, there will be no shortage of future demand for business analysts and project managers who understand the banking business and can manage the outsourced functions.

Roles and Career PathsJobs in IT departments of investment banks tend to fall into one of four categories: development, business analysis, project manage-ment, and technical support.

If you become a developer, you may be responsible for writing the computer programs that help the bank do everything from pricing and booking trades to calculating risk. The programming languages used by banks are usually C++, Java and Microsoft’s .NET (dot net).

While developers write the programs, business analysts look at the way technology is used in the bank and analyze the opportuni-ties for making it work better. A trader might complain about the length of time it takes his computer to execute a trade, so it’s up to an analyst to investigate whether the complaint is valid. If it is, a new computer might be needed, or some of the programming

code might need to be changed by the developers.

Business analysts help identify the potential for making changes to a bank’s technology systems. Once big changes are underway, the responsibility for managing them often passes to another set of IT staff: the project managers. Project managers plan, structure and fulfil IT projects. If IT development work is outsourced to third party providers, project managers liaise with providers to ensure the work is completed correctly and within the right time frame.

Technical support staff require razor-sharp technical skills and the thickest skin of all to handle not only the technology problems but the frustration of irate traders as well. It’s a role that carries a lot of responsibility: a computer problem on a trading floor lasting a few minutes could cost millions of dollars. It’s up to technical sup-port staff to identify and resolve the glitch as soon as possible.

Generally, IT staff in investment banks specialize in a particular business area. While many IT staff work on the trading floor, oth-ers are based in private banking, fund management, operations, or deal with core infrastructure requirements.

Skills and Qualities• Superior programming abilities


• Innovative

• Client-focused

• Good problem-solving and decision-making abilities

Pay: Information Technology


Developer 75k – 85k + B 85k – 110k + B 110k – 140k + BBusiness analyst 65k – 80k + B 80k – 100k + B 100k – 125k + BProject management 65k – 80k + B 80k – 100k + B 100k – 125k + BTechnicalsupport 60k – 80k + B 80k – 100k + B 100k – 125k + B



29

EFC_CIFM_090605.indd 29 9/6/05 8:53:11 PM



30

Marketing and Public RelationsMarketing and PR people manage the firm’s image to the outside world

Definition and TrendsMarketing and public relations (PR) people act as the interface be-tween financial services companies and the wider world. They try to present the firm as it would like to be seen. Marketers concern themselves with ‘reputation management,’ or how a bank’s brand is portrayed in advertising and promotional campaigns; PR people focus on how a bank is represented in the media. The two roles are related, but also distinct.

In recent years, the role of investment banks’ PR people has become more important. Following a rash of negative coverage of scandals around biased research and dubious trading deals, banks are increasingly sensitive about their portrayal in the media. As a result, staff at most firms are forbidden to talk to journalists with-out prior permission from the PR, or media relations, department.

Roles and Career PathsInvestment banks typically employ centrally-focused marketing staff to help promote the bank as a whole, as well as product-specific marketing staff who sit alongside sales teams. This might involve sponsoring sporting events or producing brochures and developing corporate logos.

While people in the central marketing department communicate to customers, people in PR encourage journalists to write positive ar-ticles about the company they work for. Investment banks typically have their own in-house PR departments which they use, among other things, to help communicate quarterly results or manage media coverage of mergers and acquisitions.

If the bank is attracting negative media attention, PR departments engage in damage control, limiting the impact of the harmful news coverage as much as possible. In some cases, banks combine the marketing and PR functions in a single communications department. This typically encompasses broader responsibilities, such as com-municating with the bank’s own staff, and with its shareholders.

Few investment banks train their own marketing and PR staff in-house. Banks typically hire both marketing and PR staff with several years’ experience, usually gained in a blue chip company or top PR agency. The people who develop a bank’s brand are typi-cally drawn from large advertising agencies.

There are also various independent PR agencies active in the financial world, which are sometimes hired by banks to give their own PR teams a boost.

Skills and Qualities• Strong written and oral communication skills

• Networking and relationship management

• Understanding of and ability to communicate financial issues

• Ability to grasp complex issues very rapidly

Pay: Marketing and Public Relations


Associate 75k – 85kVP 100k – 150kHead of marketing/Director 150k – 350k


EFC_CIFM_090605.indd 30 9/6/05 8:53:12 PM

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Ratings Agencies and Information ProvidersDelivering the grades and data for the markets

Definition and TrendsRatings agencies rank organizations and governments based on an analysis of their creditworthiness, or their ability to repay issued debt products (companies issuing debt pay the agencies for this pleasure).

Ratings are issued in a standard form, making it easier to make comparisons between one organization and another. If a company is rated AAA, the ratings agency judges it almost 100% likely to pay on time. If a company is rated C, the chances of getting paid are fairly bleak. There are numerous other ratings in between, from AA to A, Baa, and beyond.

Different agencies use slightly different codes for their ratings. In general, bonds ranked Baa, BBB, or above are considered ‘invest-ment grade,’ meaning investors are likely to get their initial invest-ment returned. Anything ranked below this is known as specula-tive grade or ‘junk,’ meaning that repayment is less certain.

The ratings agencies sector is dominated by three players: Standard & Poors (S&P), Moody’s Investor Services and the smaller Fitch Ratings. Other smaller ratings agencies do exist, but their role is nominal according to Sean Egan, managing director of Egan-Jones, an independent ratings firm. S&P and Moody’s together account for 80% of the market.

According to critics, the big three ratings agencies are overly conservative and ill-equipped to deal with the complex products used in today’s financial markets. Ratings agencies started out rating simple bonds, but today, they also rate various exotic credit derivatives such as collateralized debt obligations (CDOs).

Despite this criticism, the big three agencies still carry consider-able clout. In May 2005, S&P delivered a heavy blow to Ford and General Motors by downgrading their debt to junk status. The move affected billions of dollars of debt at the combined compa-nies, and followed a 40% drop in first quarter net profits at Ford. GM sustained a loss of $1.1 billion over the same period.

While ratings agencies help banks and their clients by analyz-ing the likelihood of default, information providers provide live data feeds to banks’ salespeople and traders. This data includes real-time quotes on fluctuating prices, as well as historical price data, of financial products. They also offer a host of other data, including news stories and information on companies. In addition to data feeds, information providers also sell their own products such as screens and terminals to access their information.

The industry is intensely competitive, with companies locked in a battle to provide data faster, more cheaply, and on increasingly fancy screens. The battle is principally between Reuters, the tradi-tional incumbent, and Bloomberg, its arch rival, which is dominant in the fixed income market. Like the ratings agency sector, there’s also a third competitor, Thomson Financial, which is seeking to increase its market share.

Roles and Career PathsIf you go to work for a ratings agency, don’t expect to find yourself rating companies’ bond issues immediately. Instead, you’re likely to start life as a research assistant helping an analyst and will have to work your way up.

Analysts at ratings agencies typically specialize in particular prod-uct types: corporate finance (company ratings), public finance (local government ratings), sovereign (national government ratings), infrastructure (utility companies and public project finance), struc-tured finance (rating derivative products), and financial institutions.

Roles at information providers are more varied and cover every-thing from data analysis to technology, journalism, and business development.

Skills & Qualities• Strong written and oral communications skills



• Ability to express complex issues simply


32

Ratings: A Guide

Agency Moody’s Standard & Poors Fitch

Investment Grade Aaa AAA AAA AA AA AA A A A Baa BBB BBB SpeculativeGrade (‘Junk’) Ba BB BB B B B Caa CCC CCC Ca CC CC C C C

Sources: Moody’s, S&P, Fitch

EFC_CIFM_090605.indd 32 9/6/05 8:53:12 PM

Fitch Ratings Corporate DescriptionFitch Ratings is a leading global rating agency committed to providing the world's creditmarkets with accurate, timely and prospective credit opinions. Built on a foundation of organicgrowth and strategic acquisitions, Fitch Ratings has grown rapidly during the past decadegaining market presence throughout the world and across all fixed income markets.

Fitch Ratings is dual-headquartered in New York and London, operating offices and jointventures in more than 49 locations and covering entities in more than 80 countries. FitchRatings is a wholly owned subsidiary of Fimalac, S.A., an international business supportservices group headquartered in Paris, France.

ANALYTICAL POSITIONS Entry level analysts are key contributors to all ana-lytical departments: Structured Finance,Corporate Finance, Public Finance, CreditProducts, Credit Policy, and Fitch RiskManagement. If you join Fitch, you will:

• Provide support to lead analyst on new issue ratings.• Gather and analyze financial statements, as

well as the latest industry, regulatory, and eco-nomic information.

• Develop an understanding of legal and account-ing issues affecting a security.

• Run computer models and spreadsheet-basedapplications to evaluate credit risk and cashflow coverage. Present analysis at rating com-mittee meetings.

• Develop an ability to differentiate among ratingcategories.

• Write research reports and press releases.• Adopt Fitch style: high level of service to our clients

and a team-oriented approach to ratings analysis.

CANDIDATES MUST POSSESS• BA/BS or MBA degree.• Ability to apply advanced mathematical

concepts.• Excellent verbal and written communication

skills.• Proficiency in Microsoft Word/Excel.

For more information about career opportunities asa Financial Analyst in New York or Chicago, pleaselog on to www.fitchratings.com and visit the“Careers at Fitch” section of our website.

Summer Internships available Equal Opportunity Employer M/F/D/V

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The Recruitment Process: A Survival GuideYour first job could be the hardest one to land

Competition for undergraduate and graduate trainee positions in investment banks is intense. With a reputation as a high paying, jet-setting industry, banking exerts a magnetic attraction over university leavers. Applications are received in tens of thousands and the vast majority are turned down.

To filter these applications, banks use a thorough screening process, from on-campus events to online applications and several rounds of interviews. And

you must stand out each step of the way.

Surviving Application FormsOnline application forms, found on banks’ websites, are used to eliminate over 50% of the applicants. Poor academic credentials are the most common cause of failure. Most banks are looking for nothing short of a 3.5 GPA and higher.

Strong academic results do not, however, guarantee an interview. To weed out those with little else to offer, application forms ask searching questions such as: “Describe a situation in which you displayed leadership skills to influence the outcome of an event.”

Students often underestimate the importance of such questions. To do well, they should produce a detailed but concise answer that provides evidence for the skills being looked for.

Recruiters say common mistakes include short answers, spelling errors, failing to answer the question and pasting answers from one bank’s application form on to another’s. To ‘ace’ the applica-tion form, it’s a good idea to prepare your answers offline and to proof them carefully before submitting. Make sure you’re answer-ing the questions, and try to do it concisely.

It’s also a good idea to get your application in early. Vivienne Dykstra, a former investment banking graduate recruiter turned graduate recruitment consultant, says the best applicants are the first off the mark. Banks are quick to offer these early applicants an interview as soon as possible, she says. (Check out the Employ-ers section for application details).

Surviving InterviewsIf banks like your application form, you may be invited to a first-round interview. Here they probe you further to find out your skills and your personality. First interviews typically take place in the familiar environs of your university campus, with your college’s career services coordinating the interview time slots.

There, you will face a less familiar panel of several interviewers

usually made up of junior people from the business area to which you’ve applied, and people from the human resources (HR) function.

The first round is all about ensuring you’re the right kind of person for the bank. All banks have a list of skills/personal characteristics known as ‘competencies,’ which they try to identify (see Interview Insiders: Know Your Q&A on page 36). At this stage, recruiters will also make some effort to probe your knowledge of investment banking and your motivation for working at their bank.

If you create a credible impression of being a banker who is both a team player and a leader, who is knowledgeable about the profes-sion and the bank, you should be invited back for more.

By this stage, around 300 of the original 8,400 applicants are left. Between half and two thirds will receive the coveted offer of a full-time place.

The main thing distinguishing second-round interviews from their first-round predecessors is a greater emphasis on technical apti-tude. The bankers interviewing you will want to ensure you have the wherewithal to function intelligently under pressure, and that you’re sufficiently interested in their line of business to have more than a basic understanding of how it works.

To this end, applicants for fixed income sales roles might be asked how bond prices respond to interest rate adjustments and why. Applicants for foreign exchange (FX) trading roles might be asked to explain how interest rates adjust to the price of FX options.

Networking is the KeyIn addition to the application and the interview, most banks, such as Goldman Sachs and Citigroup, organize on-campus events at the universities where they regularly recruit. Prior to the interview dates, they also hold networking sessions for the candidates to meet with both the recruiters as well as professionals in different divisions of the firm.

These on-campus events and networking sessions are extremely important, says Amabelle Cardenas, Global Markets & Research campus recruiter for Merrill Lynch. “In this business, it is so im-portant to network and make good connections,” says Cardenas. “Candidates must follow-up after the networking sessions are over and build that relationship.”

34

EFC_CIFM_090805.indd 34 9/8/05 6:06:54 PM

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The success of our business relies heavily on individuals and their ability to work closely in a team-driven environment. At the same time, the distinctive and unique strengths of each of our investment bankers and analysts are critical because these strengths continue to reshape our business and make Piper Jaffray the dynamic, exciting place it is.

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36

Interview Insiders: Know Your Q&AWhether in the U.S. or Europe, interviewers will try to trip you up

You’ve filled in application forms, you’ve excelled in aptitude tests… all that remains is getting through the interviews. Now the real preparation begins.

Put it down to nerves, or inexperience, but plenty of people answer interview questions badly. Take the person who described the rigors of enticing pigs to mate when asked to provide an example of his persuasiveness. “It’s surprising how unclued-up people can be about what we’re looking for,” says the head of graduate recruitment at one investment bank.

Some mistakes are self-evident. Angela Garnett, head of graduate recruitment at Lazard in London, recalls one candidate who when asked if he read the financial press said he found it quite boring. “It wasn’t a good answer,” Garnett says.

The best defense for a high-pressure interview is good prepara-tion. You need to understand the interview process, and know what kinds of questions will be asked before going into the interview.

Round One: Examples, Examples, Examples Just what are banks looking for? Examples, is the short answer. Most of them use ‘competency-based’ interview techniques.

In the first round of interviews in particular, candidates are typi-cally asked to provide examples of situations in which they have displayed a particular competency.

“We look for specific examples of past behaviors which provide examples of future potential,” says Nancy Labiner, head of Europe campus recruiting at Goldman Sachs. “We don’t require invest-ment banking experience: A candidate can talk about a job at Starbucks if they can tie the experience to leadership, working as part of a team or dealing with difficult customers, for example.”

First-round interviews are typically conducted by junior bankers and graduate recruitment staff. At this stage especially, you will need

to stand out: A bank hiring 200 graduate trainees will interview around 1,600 people at this phase.

What do Banks Want? When it comes to behaviors, most banks are focused on the same things: team building, com-munication skills, proactiveness, assertiveness, and leadership skills.

Joanne Scott, head of resourcing at Morgan Stan-ley in the U.K., says questions designed to elicit desired behaviors might include, “Give an example of a situation when you demonstrated leadership,” or “How would your friends describe you?”

Questions are designed to be open-ended, says Scott. Within reason, responses can cover any subject area, as long as they are detailed and specific to the candidate replying.

Round Two: Brain Teasers If first-round interviews are about checking that a candidate has the right behavior, second- and third-round interviews are more technical. At this stage, interviews are more frequently conducted by senior bankers.

“Some businesspeople like asking bizarre questions and conduct-ing high pressure interviews,” says Vivienne Dykstra, former head of graduate recruitment at Deutsche Bank and now a consultant on graduate recruitment techniques. “The idea is to put candidates on the spot and grill them until they crack, with a view to seeing how they react under pressure.”

Dykstra says a favored conundrum is, “Why are manhole covers round?” Answer: “So they don’t fall down the hole, and can be rolled along instead of lifted.” Others have been known to include “How many red cars are there in the U.S.?” or “You have a bowl of 100 marbles, 50 are black and 50 are white. Devise a strategy for being able to separate them when blindfolded.”

At the same time, David Schwartz, a financial services recruiter at Highland Partners in New York, and former global head of campus recruiting at Goldman Sachs, says high-pressure interviews are increasingly frowned upon. “HR people have to restrain bankers from asking these questions. In the end, a guy who knows how to solve a brain teaser won’t necessarily be any good at bringing in a corporate finance deal.”

Sample Brain Teaser Questions Used by Banking Interviewers: Q. At dawn on Monday a snail fell into a bucket that was 12 inches deep. During the day it climbed up 3 inches. During the night it fell back 2 inches. On what day did the snail finally man-age to climb out of the bucket?

A. The following Wednesday, nine days later.

Q: A man drove from Aardvark to Beeville. On the first day he traveled 1/3 of the distance. On the second he traveled 1/2 of the remaining distance. On the third he traveled 2/3 of the remaining distance. On the fourth day, after covering 3/4 of the remaining distance, he was still 5 miles away from Beeville. How many miles had he covered so far?

A: 175 miles: the total trip is 180 miles. On the first day he trav-eled 60 miles, leaving 120 miles. On day two he traveled another 60 miles, leaving 60 miles. On day three he traveled 40 miles, leaving 20 miles. On day four he traveled 15 miles, leaving 5 miles.

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37


Job Offers Rebound for GradsManage multiple offers to get that great first job

It could be called the ‘bus syndrome’: You’re waiting for a job offer from an investment bank and all of a sudden three come along at once. What do you do?

If job offers were buses, it would be tempting to go for the first one and hope for a seat. But mismanaging the decision-making process could take you way off track in your career.

Multiple OffersIt may seem unlikely that multiple offers could exist in such a competitive industry. But top candidates could easily have many offers to juggle, experts say.

“We’re all targeting the same top students,” says Kristina Peters, head of graduate recruiting at Deutsche Bank in New York. “At business schools like Harvard and Wharton it’s not unusual for students to have four or five different offers.”

Connie Thanasoulis, a director in Merrill Lynch corporate campus recruiting, says the best candidates are heavily pursued: “This is the most competitive hiring year in almost five years. Top under-graduates and graduate students used to have an average of one or two offers each. That’s gone up to three or four, with exceptional candidates having seven or eight offers from different banks.”

Don’t DelayIf you’re a member of the three or four, or seven or eight, club, it may seem tempting to delay as long as possible. Such behavior is not unheard of. “Some students take pride in collecting offers,” says Peters at Deutsche. “They’re like a badge of honor.”

But remember, every job you decline is an offer for someone else. “In the interests of their classmates, we strongly encourage stu-dents to make their choices and move on,” says Julie Morton, as-sociate dean of MBA career services at Chicago Business School.

At the same time, delaying for too long may also mean offers ‘explode’ beneath your feet. “All students will be given an explod-ing date by which to make a decision,” says Brian Hood, head of graduate recruitment at Citigroup in London, “After that, an offer will no longer be valid.”

Schools typically demand banks give their students a few weeks to make decisions. “We make it clear rapidly exploding offers are unacceptable,” says Morton. “Otherwise, banks would be asking students to sign up at the end of interviews.”

One graduate recruiter at a bulge bracket bank says deadlines can be stretched to a point. “We are very flexible. If someone needs more time because they’re interviewing somewhere else, we will typically give it to them. But we won’t do it twice.”

Be HonestIf you’re juggling multiple job offers, should you tell the banks pursuing you? There are clear advantages to doing so: Realizing you’re a hot prospect, banks might throw you some additional incentives to help make up your mind.

Banks would prefer you tell them everything. “We need to get as intimate as possible with candidates,” says Thanasoulis at Merrill. “It helps if we can get information about who else has offered them a position, and how that influences their significant other. The more we know, the more likely we can get a candidate what they want.”

When banks know what’s going on, they can be very persuasive. They typically invite candidates to meet their potential colleagues, and assign buddies (preferably an alum from the same school) to make frequent contact and steer candidates in their direction.

If a spouse has reservations about relocating to the likes of New York or Chicago, the banks’ lure may be extended in that direction. Deutsche has helped spouses find jobs, says Peters. Another bank said it has even offered to employ spouses itself.

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Employers DiversityFinding a JobSectorsOverview CareersPlanning Ahead www.efinancialcareers.com

Peter Marber, global head of GEM fixed income and currencies, HSBC Halbis Partners

• Try to find firms that commit to people versus a specific skill set. That way, if the firm’s goals change, your colleagues will help you evolve professionally.

• Stay flexible. The world is moving at a dizzying speed, and you may have to make decisions quickly to stay ahead.

• Remember: Your first job as an MBA probably won’t be your last. Don’t obsess too much on getting the “perfect job.”

Kelly Gately, CFA, vice president in private wealth management, Mellon Financial Corporation

• Find a manager to help your career development and a men-tor to help plot your path.

• It is important to network and to be a team player.

• Volunteer for special projects that help differentiate you and help you gain entry to the next level.

Richard Deutsch, head of European credit research, BNP Paribas

• Move around in product areas a little. This enables you to discover what you really want to do. Learning different products provides the practical benefit that you will not be too exposed if one boss leaves or your current product area becomes less profitable.

• When you begin your career, focus on opportunities and learning prospects, not the money. If you choose correctly, the money will come.

Cindy Ferrara, head of equity derivatives hedge fund sales, Citigroup

• Be persistent and get your foot in the door; people can’t hear why you’re so great if they haven’t met you.

• Always ask for what you want, but don’t confuse being assertive with being aggressive (people like assertive, ag-gressive seems to scare!).

• Work closely with your peers in a genuinely team-spirited way. People always remember those who are helpful and make everyone look good, not just themselves.

Mark Warham, head of U.K. mergers and acquisitions, Morgan Stanley

• It is not enough to decide simply, “I want to work in financial services.” You need to dig deeper to understand the differing aspects of the various roles, and which one suits you best.

• When starting out, give weight to how wide the institution’s

training program is and the breadth of experience it can offer.

• Above all, talk to as many people as possible before making your applications and decisions. Family, friends, relations, college alumni… all can offer you views and perspectives to help inform your judgment.

Michelle Smith, senior vice president, Wachovia Securities

• Be honest with yourself about what you are good at.

• Ask for feedback from people you respect to identify your weaknesses.

• Partner with a more senior person to study and learn the person’s practice.

Simon Widig, partner, Close Brothers Private Equity

• Get broad experience before you specialize; the large inte-grated houses can offer different disciplines, geographies and languages, so they make a good training ground.

• Remember that business is about relationships; you must be personable to get along, yet strong enough to make tough decisions where necessary. It’s useful to gain knowledge of human behavior, body language and negotiating skills as early as you can.

Karen Olney, director and European equity strategist, Dresdner Kleinwort Wasserstein

• The financial markets are often fast-paced and abrupt, but don’t take any early criticism too personally thereby wasting a great opportunity.

• Aim to be very good at what you do, but never be afraid to admit when you don’t know something – once the trust is gone it’s very hard to regain it.

• Find quiet time (or a hideout) to ready up on related current affairs or research. It gives you a fresh and well thought-out perspective on things.

Jon Moulton, managing director and founding partner, Alchemy, a U.K. private equity firm

• Essential to a long career: Have high standards of integrity towards others and yourself.

• Stay up with the technicalities – or else someone else will.

• Dead boring but a huge advantage: Be good at mental arith-metic. No one else is!

Voices of ExperienceSenior professionals from all over the world offer advice to students on investment banking careers

38

Peter Marberglobal head of GEM

fixed income and currencies,HSBC

Kelly GatelyCFA, vice president

Mellon Financial Corporation

Michelle Smithsenior vice president,Wachovia Securities

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You’ve landed your first job. A year later a recruiter brings you an offer of a better salary from a competing firm. You go into your manager’s office to resign and receive a counteroffer. Should you take it?

No, says Bob Deissig, a partner at search firm The Ayers Group in New York, and firms shouldn’t offer counteroffers either. He cites a survey published in The Wall Street Journal that showed more than 90% of job seekers who had accepted counteroffers were unhappy a year later and most had left the firm, voluntarily or not.

“In financial services, it’s like musical chairs,” Deissig says. “People from First Boston go to Morgan Stanley and people from Morgan Stanley go to UBS, and it just rotates.”

Why Leave?Rather than bring in a new hire who has to learn to fill a position, banks and financial services firms are looking for an exact fit. For the employee, often the only difference is pay. “That means the only pull for a person to leave their current company is more money, and if there isn’t a lot of push, when they go in to resign it becomes very commonplace to counter,” says Deissig. “So why should they leave when their current employer just matched the salary offer?”

Often, however, the employee who was ready to leave was also dissatisfied with a manager or the company culture, so his decision to accept a counteroffer is one that will raise second thoughts in the months ahead. And managers who have just learned the employee isn’t loyal may spend the next few months looking for a replacement.

Running up the Ladder Another approach is to fill an opening through internal promotion. In a recent Robert Half survey of executives at the largest 1,000 companies in the U.S., 60% of respondents said they were more likely to promote from within than they were three years ago.

Max Messmer, chairman and CEO of Robert Half International, and author of Managing Your Career for Dummies, says that job hopping can be an attractive way to advance in times of low unemployment.

“But employers value loyalty, and the best growth opportunities often are internal, particularly among those firms that recognize the morale and productivity benefits of promoting from within.” He advises employees to make sure that their managers understand their skills and career goals.

Know the skills required for the job you are pursuing, Messmer adds, and acquire any needed education. Volunteer for new tasks to demonstrate enthusiasm, and make your boss look good.

When Deissig evaluates candidates for their ability to move into a more challenging position, he looks for indications that candidates

are inquisitive. “You often can see that outside work as well,” he says. “You want to know if the person is a quick learner, if they go outside the box rather than always taking things in logical succession.”

Finally, says Messmer, candidates should help prepare a successor so your boss will agree to let you go with professional bridges unburned.

Learning Opportunities“We tell clients to be more flexible and provide learning opportuni-ties,” says Deissig. With that approach, the hiring firm is providing more than just additional money for the same opportunity – it is of-fering a candidate the chance to learn new areas of the business.

He adds, “If a person has the right experience, if they are smart and have a degree of learning agility, it is not a leap of faith to move that person into a bigger job.”

The result is a win-win for recruiters, candidates, and banks. The recruiters have a wider range of people to present, firms gets to look at a group of highly skilled, eager job candidates, the candi-dates have a greater incentive than just money, and the outcome is a loyal employee who has grown into a new position.

Take the Offer and Run When to make a move for greener pastures

39

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40

If you think recruiters are a chromosome apart from telemarketers, think again. A good search consultant is your ally through thick and thin.

Should you use a search consultant to get a job? How does that relationship work? Search firms can provide a network of potential jobs that may not otherwise be available, but the relationship needs to be handled properly. The first step is to get noticed.

Putting Yourself on the Map “A lot of job seekers think that getting attention is just a question of barraging people with resumes and endless telephone calls,” says Allan R. Starkie, a partner at New York-based executive search firm Riotto Jones & Company. Starkie counts Deutsche Bank, Citigroup and Goldman Sachs as clients.

While Starkie says barrage tactics won’t win you any friends, if your phone isn’t ringing with recruiters vying for your attention – or even if it is – you would do well to take matters into your own hands. Here’s what you can do to show you know what you’re doing:

• Because they’re only paid for successful hires, contingency firms are more likely than retained firms to consider resumes that come over the transom. It’s often easier to make human contact with contingency recruiters.

• Ask for referrals from colleagues or friends. Janice Reals Ellig, president of retained search firm Gould McCoy Chadick & Ellig, whose clients include HSBC, Citibank and Lehman Brothers, says, “One of the best ways to get on my radar is to be referred to me by someone I know, including clients, and I will make time to see the individual.”

• Research respectable firms operating in your area. Search the Web or visit the library to consult the Directory of Execu-tive Recruiters, which profiles practice areas, size, and salary level handled.

• Send an introductory email to the search partner who handles your area at a particular firm. Follow up by phone no more than twice; don’t nag – go to the next search firm on your list. If you do make contact, try to get a face-to-face appointment.

Face to FaceUse your meeting with a search consultant to gauge his or her pro-fessionalism. Susan Teeman, president of contingency search firm Teeman Perley Gilmartin, whose clients include Goldman Sachs, Bear Stearns, and Morgan Stanley, says, “Look at the office space. Ask about the person’s experience with the Wall Street product they’re handling, what kind of placements they’ve made and what firms they’re dealing with.”

You may find yourself opposite a less-than-professional recruiter. If he or she is sitting on a hot opportunity, you may still want to proceed after ratcheting down your expectations and setting a strict policy against sending your resume without permission.

Here’s how to handle yourself at your initial meeting with a recruiter:

• Be prepared to explain yourself – why you’re different from all the other candidates, that is. Retained search consultant Ellig says, “I always ask, ‘What do people say about you?’ I want to hear in a concrete but not arrogant way what you’ve accomplished and what differentiates you. If you’re going to be too shy about it, that’s not good.”

• Know your product, understand the movement in the market-place, what’s going on at different firms on the Street and what’s happening in your sector.

• Don’t talk negatively about prior bosses or companies, and don’t divulge confidential or proprietary information. (“I don’t know if I should be telling you this, but …”).

Even if you don’t fit a current opening, keep the long view in mind. Ask the recruiter for introductions to three people who might be helpful as you explore your options. Good search consultants know the value of introducing worthy clients to one another.

To wrap up an interview, ask if it’s okay to email every 8-12 weeks to check on new searches. And send a thank you. Email is good, handwritten is better.

Information Exchange Once you’ve made contact, it’s important to maintain a relation-ship with a recruiter. One way to do this is through some informa-tion sharing.

Jay Gaines is president of New York-based retained search firm Jay Gaines & Company, whose clients include Morgan Stanley, Deutsche Bank, and The Federal Reserve. He says, “If you’re in the ranks, you want to build career relationships with a couple of people in the recruiting world whose careers are going to grow parallel to yours. You really want to share information because recruiters can be a wonderful source of what’s happening in the industry and a good source of advice.”

Specifically, a recruiter can share market information, identify trends, spread the word about emerging jobs, help you think out of the box about your own career, and provide personal introductions to other professionals. And you can learn what you’re worth on the market just in time for performance reviews.

How the Right Recruiter Can Push Your CareerKnow what you’re doing to play the game

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41


How to Blow Your Career in 90 Days or Less What you need to know to manage a job transition

If you think the first months of a new job are a honeymoon period, think again. In the results-oriented world of finance, instant gratifi-cation – of your new employers’ expectations – is more like it.

“In all cases, they expect you to hit the ground running,” says Pe-ter Gonye, co-head of search firm Spencer Stuart’s private equity and investment banking practice. The best way to arm yourself for your trial-by-fire is through preparation.

“You should certainly understand what type of culture it is before going in,” says Janice Reals Ellig, president of retained search firm Gould McCoy Chadick & Ellig. “Some are bureaucratic, while others are more run-with-the-ball entrepreneurial.”

During your interview process, investigate those who held your po-sition previously, as well as your future boss and other successful figures within the company. Find out what makes them successful (or not), and how they operate. Also make sure you’re crystal clear on your boss’ operating style – is he or she a big communicator or not? Are you expected to operate independently or check in every step of the way?

Once you start your job, don’t be surprised if you are more or less abandoned to your own devices after being shown to your desk. “Companies often don’t welcome you with open arms because they don’t know how,” says Ellig. “They’re so busy working on things that they seldom communicate or fail to communicate.”

The “Other-Place” Trap In his former job as head of international human resources at Mer-rill Lynch, Sean Woodroffe observed many instances of hari-kari performed by overeager but insensitive new hires.

“One of the classic missteps was the ‘I’ve-done-it-better-at-the-other-place’ syndrome,” he explains. “I’ve seen instances of senior executives coming in and saying, ‘The way you guys do things is archaic, this is the way we did things at our company, and it was better.’”

Instead of coming on so strongly, take time to analyze and under-stand the new environment. Acknowledge the firm’s successes before taking a hacksaw to its failures – and avoid voicing your opinions in a critical or unflattering way.

Easier Transitions at High-Growth Firms Not surprisingly, many new hires find it easier to transition into places devoid of settled fiefdoms. “Companies that are in a really heavy growth mode are much more fluid,” says Ellig.

At the end of 2004, Rayomand Batiwala began work as a vice president of securitization at BNP Paribas. “Probably over the last year and a half or so, around 50% of the group has joined,”

he says, noting that it’s easier to join an expanding group at the beginning of a growth cycle.

Slower is Better At least one observer would like to see companies go a little easier on new employees. “To expect a stranger to come into a company and really have credibility and confidence and be able to hit home runs, I think is dumb,” says Jay Gaines, president of New York-based retained search firm Jay Gaines & Company, whose clients include Morgan Stanley, Deutsche Bank, and The Federal Reserve.

“Now we’re working with a client,” Gaines says, “a top asset management firm, where they asked the candidate, ‘Look, for the first year, we really would prefer it if you wouldn’t do anything – learn our culture, learn how we do things and then act.’”

Rayomand Batiwalavice president

of securitization,BNP Paribas

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42

Careers in investment banks carry a distinct risk premium: You may be earning more money than people outside the industry, but you’re also more likely to lose your job.

A recent manifestation of this phenomenon is Goldman Sachs’ decision to fire 30 New York-based equity traders in late June of 2005 in response to greater client demand for electronic trading. There’s no shortage of precedents, including Deutsche Bank’s announcement of 6,000 job cuts last February, and Merrill Lynch’s elimination of some 24,000 staff between 2001 and 2003.

So what do you do if you want your banking career to carry on as long as that of Sandy Weill, the Citigroup chairman who started out as a runner on Wall Street in the 1960s? We asked a selection of search consultants and career advisors for advice. Here’s what they said:

• Move proactively

• Build a large rolodex

• Don’t overspecialize too soon

– John Challenger, Challenger Grey & Christmas

John Challenger, chief executive of Challenger Grey & Christmas, the outplacement provider, says you need to recognize you’re not going to stay at one organization your whole career. You should move proactively when the right opportunities arise.

While you’re working, he says you also need to devote 10% of your time to building a hefty rolodex and doing favors for others. “The more favors you do for other people by connecting them and making things happen, the more favors they’ll do for you,” he advises.

And he cautions against overspecializing in a small organization too early in your career. “Early on, it’s better to be a generalist working for a larger bank,” he says. “You’ll meet a lot more people and have a broader scope. It’s also easier to go from a big organi-zation to a little one than the other way around.”

• If you’re based in the U.S., work for a U.S.-based firm

• Anticipate the strategic direction of the company you’re working for

• Watch out for consolidation

– Jay Gaines, Jay Gaines & Co.

If job security is all-important, Jay Gaines, CEO of Jay Gaines & Co., the NY-based financial services search firm, says Wall Street bankers should think about working for U.S. banks. “When Americans work for non-U.S.-based institutions it’s often a much bumpier ride,” he says, “Non-U.S. institutions have restructured on U.S. soil many times.”

By way of example, he points to UBS, which went through numer-ous gyrations before reaching its current powerhouse status.

As well as giving up-and-coming European banks a wider-than-average berth, Gaines advises keeping an eye on your employer’s strategic direction. He says, “Look at the institution you’re working in, consider its core strengths, and judge whether the area you’re in is peripheral to the core.” If it is, you could fall prey to business restructuring.

For Gaines, the securest career option is working for a large U.S. bank that won’t fall prey to a takeover. “If you work for a top-four bank in the U.S., the chances that your organization will be acquired (and that you’ll lose your job as a result) are very low,” he says.

On the other hand, he warns career progression will be probably slower than at a smaller firm or a fast growing European firm. “These are crowded places. There’s a trade-off between the speed of advancement and lower risk.”

How to Future Proof Your CareerThe right moves today mean you may be around tomorrow

EFC_CIFM_090605.indd 42 9/6/05 8:53:18 PM

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44

Investment banking has long had a reputation for long hours, high-pressure environments, and high burn-out rates. How does this sit with the growing trend for flexible working in other industries, such as accounting?

Flexible working, or flex-time, generally means an alternative work schedule instead of the traditional full day of going into the office, working hard, and heading home. The idea is that employees have more flexibility to complete their work while also balancing work and family, or other personal responsibilities. Flexible hours means that employees select and alter their work schedules, which could mean working only certain days of the week, or sharing a job with another employee. There are many possible arrangements outside of the normal workday.

Given that close to one-third of the workforce is in a flexible work arrangement, according to the U.S. Bureau of Labor Statistics, it would be reasonable to assume that banking might be dragging its feet in joining the corps of companies prepared to let employees manage their hours and their locations of work.

Not so, according to website www.workingmother.com. Things are definitely improving, certainly as far as working women are concerned.

In its 2004 survey of the 100 best companies for working mothers, the website included no less than six major banks offering flex-time or variations of it to the workforce. Citigroup, Credit Suisse First Boston (CSFB), JPMorgan Chase, Morgan Stanley, UBS and Wachovia all received honorable mentions for their workplace initiatives for working mothers, which included flex-time.

Some OptionsAccording to the website, at many of its locations Citigroup em-ployees can take one ‘catch-up’ day each month to focus on their work without any telephone or email distractions.

At CSFB, paid sabbatical leave is available to employees who have worked at the bank for at least five years. Staffers can take up to three months of paid time off, to use however they choose. In addition, CSFB has instructed all employees that flexible work-ing is an intrinsic part of cooperation between managers and their staff in an internal message to all staff:

“As CSFB continues to strive to be an employer of choice in the financial services industry, it is critical that our employees are able to balance the demands of their work lives and their personal lives,” the memo said. “We recognize that personal commitments will affect employees from time to time.”

The memo goes on to say: “We encourage employees and their managers to demonstrate judgment and common sense in agreeing whenever possible to occasional informal arrangements

whereby important commitments outside work can be honored without feelings of guilt or the use of vacation time.”

According to website www.workingmother.com, JPMorgan Chase permits 23% of its employees to take advantage of flex options, while another 35% want the opportunity to follow suit. The company is making a major push to drive home the business case for flexible schedules to managers, and they’re tracking the usage to ensure that numbers taking the opportunity rise.

The site says that Morgan Stanley also offers flexible work options, including telecommuting, job shares and compressed workweeks. Workers who live near Morristown and Princeton in New Jersey can use one of the firm’s suburban offices as their base instead of making the lengthy commute into New York City. UBS has embedded policies friendly to women and families, and offers flex-time, compressed workweeks and telecommuting.

Wachovia, described as a “Mom-magnet” on the same website, offers flex-time, job shares and even encourages staff to use four hours each month to participate in community service projects. Some 19,000 of the firm’s employees telecommuted in 2003.

Shifting Employment PatternsWith such a strong interest in flex-time, it may be only a matter of time before other firms follow suit, and not just for female workers.

Employment patterns have changed since our parents’ era: A job is no longer a nine-to-five, five-days-a-week exercise, nor is it for life, especially in banking. Better education and more access to opportunity means that employees can take career breaks, down-shift, opt for further study, relocate, start a family, and switch direction with far greater ease than in previous generations.

Taking these employment patterns into consideration, it doesn’t make sense to train an individual for several years, investing time and money in their progress, only to lose them to parenthood or relocation or any of a host of other reasons when people elect to drop out of the conventional “working day.”

The old-fashioned scenario of man-as-breadwinner taking home the income to stay-at-home mom is not the sole lifestyle scenario in the new millennium. More and more women hold down salaried jobs as well as run households, with or without a man by their sides. More and more men want to play a more active role in their families and develop themselves away from the career track. Traditional working methods will have to adapt and adjust to suit the requirements of the workforce if companies are to recruit and retain the most talented individuals.

Flex-time Pros and ConsThe ‘war for talent’ is a phrase bandied about by human resources departments. If firms are to win that war, they have to keep the

Flexible Working in the Financial WorldWill flex-time become the norm in investment banking?

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armies happy – and that means changing the way in which they expect their employees to function. Workplace stress and loss of productivity due to ill health cost U.S. companies millions of dollars each year, so any option that helps reduce these drains on profit should be welcome.

The convention that banking is a tough environment is valid, but there’s yet to be much evidence that managers in banking buy the idea of flex-time at all. Your physical presence in the office is pretty much a given at bulge-bracket banks, and it’s a culture that is resistant to change.

Part of the reason for this is pure practicality. In some areas of investment banking, it’s simply not possible to pull a deal together without the physical presence of the core team, or deadlines and time differences would make it impracticable to complete a proj-ect without those involved being in the present and accounted for. Regulation dictates that much business be conducted on-site, so that banks have full and proper records of transactions if a ques-tion or investigation comes up. Flexible working in these instances would create more problems than it solves.

However, the Internet explosion and improved telecommunications have enabled millions of people to adopt a working life which dovetails with their personal requirements. It would have been unthinkable as recently as ten years ago that people could tele-commute from home and be as effective and productive as their office-bound counterparts, but it’s now a daily reality. Bankers are seldom far from their BlackBerries.

Losing the commute gives those workers an instant advantage over employees who have to spend time getting to and from the office. Adapting schedules to fit in other routines like childcare and outside interests can mean more commitment from workers, who feel they achieve a true work-life balance. Add that to the reductions in stress levels and time off sick, and you have a viable alternative to what is still common practice in finance.

Then there’s the issue of trust: An employee who feels their man-ager has sufficient confidence in them to allow them to work from home – even if only occasionally – may be more likely to produce high-quality work than one who feels that there’s someone check-ing over their shoulder every five minutes.

What’s Next?Will investment banking make the leap? It will be a paradigm shift, but given the quantifiable benefits to employee health and motivation plus the need to hang onto key talent, it seems to be tiptoeing in the right direction.

Of course, banks may not have to adapt, simply because they have so many people applying for a much smaller number of available slots. With that kind of competition, not only can firms choose

those workers who won’t demand an alternative workday, but employees may be willing to sacrifice more for that plum position.

The true success of flexible working arrangements at investment banks may eventually be achieved if a win-win combination of meeting employees’ needs, while improving profitability, can be developed. For this, the last word goes to that internal memo at CSFB again:

“Achieving success when it comes to flexibility in connection with working hours is the shared responsibility of the manager and the employee. Communication and trust are essential. If manag-ers are supportive of their teams, and employees consider the repercussions of their requests on their work, co-workers, clients and CSFB, flexibility can have a positive impact on workplace ef-fectiveness and on CSFB’s bottom line.”

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The Global Private Equity Club and How to Get In Breaking in is tough, but the payoff can be substantial

Which career is at the top in financial services? Ask any well-informed investment banker in any financial center, and they will come up with the same answer: private equity.

Private equity (PE) funds are the kings of the capitalist system. With hundreds of millions, often billions of dollars to invest, they specialize in buying out large established companies, improving them, and selling them.

People who work in private equity can make incredible amounts of money. They also benefit from the kind of job security most invest-ment bankers can only dream of. But don’t count on finding a job in the industry easily.

Lucky Few “Private equity is one of the most popular career destinations at this point in time,” says Tim Butler, director of career development programs at Harvard Business School. “It is also one of the most competitive, if not the most competitive industries to get into.”

Guy Townsend, managing director of Walker Hamill, a London-based firm specializing in private equity recruitment across Europe, says most people haven’t much of a chance. “You need a top-class degree from a top school. If you’re coming from banking, you need to work for a top quality name, and you need to be ranked at the top of your peer group.”

If you’re one of the lucky few, how can you maximize your chances of success? It all depends on where you’re based. But on the whole, the message is the same for everyone: excel.

Start Young The English-speaking world has an advantage when it comes to finding work in private equity: U.S. funds hire junior staff on an annual basis. Funds in the U.K. increasingly do the same.

There are two common entry points:

• Two to three years into a first job after college graduation

• Immediately after an MBA

The first option is best but is no guarantee of a job for life. Funds typically hire two-year contracts and then send junior recruits to do an MBA (with no guarantee of being rehired). But if you delay moving into private equity until completion of an MBA, you risk being trumped by rivals who’ve worked in the industry already.

The Carlyle Group, the giant PE fund with nearly $19 billion under management, hires 15-20 associates per year. Lori Sabet, senior vice president for human resources at Carlyle, says most come from investment banking or strategy consulting.

If you’re a banker, Sabet says you’ll be well placed if you’ve worked in one of four areas:

• Corporate finance

• Financial sponsors

• Leveraged finance

• M&A

The MBA Springboard If you plan to use an MBA course as a springboard to a private eq-uity career, be sure to choose the right school. Blackstone Capital Partners, a U.S. fund with $14 billion under management, presents to students at just three schools: Harvard, Wharton and Columbia.

Last year Columbia Business School sent 30 people into careers in private equity. Considering most funds hire no more than 10 people each, this was no mean feat.

Regina Resnick, head of the career services at Columbia, points to the school’s historic ties with the industry. It helps that big names, such as Henry Kravis, co-founder of Kohlberg Kravis Roberts, are alums and have been known to run roundtable discussions for students.

“Private equity funds like to build relationships with students before they hire,” says Resnick. “It’s a very personalized process – they are not hiring in great numbers and like to get to know people first.”

The implications are clear: If you’re at the wrong school, your chances of meeting the right people will be severely limited.

European OptionsBarbara Valaperti, a Paris-based consultant at search firm Heidrick & Struggles, says most funds already have well established of-fices in France, and job openings are rare. But some funds are oc-casionally willing to fill senior level gaps with outsiders. Valaperti says a little banking, a little strategy consulting, and a smattering of industry experience is a desirable combination.

If you want a job in private equity in Italy, it will help to have friends in high places. The Italian private equity market is small and recruitment is rare. “Networking is the best way to get a job,” says Tracey Turton, a headhunter at Horton International in Milan. “You need to get to know people and persuade them that hiring you is a good idea.” Speaking many languages can also be an advantage.

Language is also an asset if you want to move into private equity in Germany. “You need to have had international exposure,” says Jens Tonn, head of the German team at private equity firm Cando-ver. “English is essential: There are very few independent German funds run by Germans.”

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Kolberg Kravis Roberts

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What it Takes to Make Managing DirectorAnd why not everyone is cut out to do so

Around the time bonuses are announced, so are the names of new managing directors. The news is awaited with trepidation. Managing director, or ‘MD,’ is the highest title a bank can bestow. Bankers promoted to MD have made it: They are typically paid more, have more responsibility and are admitted to an elite inner circle, often with its own dining rooms. Bankers who aren’t made MD are left wondering whether they ever will be.

It can be a hard call to make. As with the allocation of bonuses, banks are secretive. “It’s an arcane affair,” says a former vice president at Goldman Sachs. “MDs are chosen behind closed doors; no one really knows how the process works.”

Rungs to the Top Becoming an MD is nothing like becoming an associate or vice president. While low-level promotions can typically be swung with a good word from a direct boss, the selection of MDs is an altogether more complex affair.

Each bank has its particular foibles, but all start with a shortlist. This process starts at the grassroots level and ends at the highest echelons of the bank. Existing MDs play a pivotal role throughout.

In the first stage, vice presidents (VPs) who excel in their annual assessments are nominated as potential MD material by the managing director in charge of their team. David Charters, a former managing director in equity capital markets at Deutsche Bank, says the luckiest VPs are nominated within just two years: “Everything needs to go according to plan: deals come in, you get to work with big producers and they are big enough to credit you with your contribution.”

In the second stage, team leaders present nominations to a group of MDs convened especially for the purpose. Through a process of elimination, the group assembles a shortlist of the most exceptional candidates. Jean Facon, a former managing director at JPMorgan turned recruiter, says the evaluation process is a col-legial one: “Typically, a committee of managing directors considers names on a case-by-case basis.”

Once names have been thoroughly debated, and the cream of the crop selected, a shortlist is typically presented to dignitaries higher up the rungs at the bank. At UBS, members of the invest-ment banking board review candidates’ suitability. “The chairman is briefed on who is who and approves their promotion or not,” says one banker. Disapprovals at this stage are unusual.

Make Friends in High Places If you want those all-important words inscribed on your business card, use the following strategies to boost your chances.

Given the pivotal role played by current MDs, who knows you and who likes you are very important. “It’s the ‘in’ crowd versus the

‘out’ crowd,” complains one would-be MD. If you’re going to make it, you need to navigate your way in using one of the bank’s stars to guide you.

The solution sounds simpler than it is: find someone senior who likes you and respects your work. “There is merit in attaching yourself to a big producer,” says Charters, the former Deutsche MD, “particularly one generous enough to credit the team for achievements. If not, you could put in four or five years at VP level and still not make it.”

Make Lots of Money for the Bank Revenue generation is not the only criterion for making MD, but it is certainly one of the top. “It is not only about long service. You have to make the fees,” says an MD and head of department at a U.S. bank.

“Numbers speak louder than words,” says an MD in equities at a German bank, “Lots of people are involved in deals but only a few make the difference between success and failure. You need to show you are one of the few.”

Treat People Well You will not be promoted to MD if you are the kind of person who reduces junior colleagues to tears for making a spelling mistake. MDs are good managers; they should know how to bring out the best in people. Banks will also want you to demonstrate their core values (these are typically to be found somewhere on their website) both inside and outside work.

Do All This Consistently It will not be sufficient to make high-level friends in the months just prior to promotion, or to suddenly become sweetness and light when you have a reputation for being a dragon.

“A late lobbying effort is unlikely to make any difference,” says re-cruiter Facon. “You need years of a consistently strong track record, both in terms of performance and in adhering to common values.”

Handle Failure Without Fail What if you don’t make MD? There’s always next year. Candi-dates typically get two shots at promotion after graduating to the shortlist. But if you don’t make it twice in a row, your chances are severely depleted. “If you’re rejected a couple of times, perhaps there are issues that won’t go away,” says Facon.

If this happens, console yourself with the fact that MDs are not always the most highly paid but hold a heavy plate of managerial responsibilities. Alternatively, you can always leave to try your luck elsewhere. If a new bank really wants you, it might bring you on as an MD, sidetracking the usual process entirely.

EFC_CIFM_090605.indd 48 9/6/05 8:53:21 PM

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Employers Planning AheadFinding a JobSectorsOverview CareersDiversity www.efinancialcareers.com

When it comes to diversity, the story in the financial markets is mixed. In recent years, the industry has put great effort into hiring and retaining minorities at all levels. And while there’s no question many firms have made real progress, entrenched corporate cultures and economic realities have sometimes halted that evolution.

Few doubt the industry’s direction will change, but at the same time few believe complete solutions will be achieved easily or quickly. Meanwhile, minority candidates are presented with an exceptional opportunity: Because fewer women, blacks and Hispanics are applying to business schools, financial companies are engaged in a fierce war for talent.

“Blacks and Hispanics have predominately worked in law, medicine and other areas of business, but Wall Street or finance is under-populated by those minority groups,” says Lance LaVergne, vice president of Human Capital Management at Goldman Sachs and manager of the firm’s U.S. diversity recruiting efforts. As a result, he says, “We are very, very focused on expanding the pool by reaching out to students from non-traditional backgrounds. That’s top of mind for all of us.”

Executives are quick to throw water on the notion that diver-sity equals entitlement or lower standards. “It’s important to remember that diversity and meritocracy are one and the same,” says LaVergne. “We’re not compromising on quality to satisfy diversity.” Ultimately, says Elizabeth Wamai, a director at Merrill Lynch and the firm’s diversity manager for Global Markets and Investment Banking, candidates who aren’t qualified won’t be successful – so there’s real pressure on companies to make sure each hire is a good hire.

“We’re in an environment that’s as positive and optimistic as it’s ever been for diversity,” says LaVergne. “If you’re interested and prepared, the opportunities are endless.”

CompetitionAccording to Wamai, top candidates can expect three or four job offers. “We all know who they are,” she says. In their pursuit of the strongest candidates, executives express less concern about whether they’re minorities than whether they’re talented. Says Pamela I. Faber, managing director of human resources at the Securities Industry Association (SIA) and staff advisor to the association’s diversity committee: “A company wants the best person they can get for the job.”

“There’s no monopoly on talent,” observes LaVergne. “Talent is found across all demographics, all demographic groups. If you want the best team, the team by definition must be diverse.” And, he says, financial companies believe talent is critical to their suc-cess: “The only thing that distinguishes us from our competitors is our talent,” he says.

Finding TalentTo find qualified minority candidates, the industry is searching both broad and deep. Companies are reaching out to students as early as junior high with internships and communications programs. “By the time you get to juniors and seniors in college, they’ve already got a relationship with a firm,” says LaVergne.

Increasingly, companies are working with not-for-profit groups like Management Leadership for Tomorrow and Sponsors for Educational Opportunity (see Enlarging the Talent Pool: Neces-sity, Not Luxury on page 53) to reach these young prospects. At the same time, Wamai says companies are seeking candidates from academic areas outside of business school, looking at ac-counting majors, law majors, and others with backgrounds that could be valuable in the financial markets. However, this doesn’t mean they’re turning their back on the value of business schools. Several firms, Merrill Lynch among them, offer fellowships and internships to promising candidates who want to attend business school but need help shouldering the financial burden.

“Firms have built a very good infrastructure in terms of reaching out to minority populations,” says the SIA’s Faber. In addition to networking, they’re advertising more in minority media outlets, pushing recruiters to find more minority candidates, sending more staffers to job fairs sponsored by minority organizations, and lever-aging the networks of their own minority employees, she says.

The StatisticsIn 2003, the latest year for which numbers are available, minori-ties made up 18.3% of the securities industry workforce, according to the SIA’s 2003 Report on Diversity Strategy, Development and Demographics, a survey conducted by the association every two years. That’s up from 17.8% in 2001.

Some 27% of the securities industry’s executive management positions were held by either women or minorities in 2003, com-pared to 20% in 2001. Some 15% of branch managers were either a woman or minority, the same as in 2001, while the proportion of women or minority managing directors rose from 17% to 20%.

But while the proportion of Asians rose from 5.8% in 2001 to 7.3% in 2003, blacks and Hispanics lost ground: The proportion of black workers dropped from 6.3% to 5.5%, while the proportion of Hispanics slipped from 5% to 4.7%. Women, who made up 43% of the industry’s workforce in 1999, held 37% of its jobs in 2003.

To be sure, the years from 2001-2003 were one of the most un-usual – and traumatic – the business has ever faced. The dot-com disaster and the tragedy of September 11, 2001 precipitated a slide in revenues and employment that forced many firms to sur-render some of the advances they’d made in previous years. In the

Trends in Diversity: Banks Chase Same Minority TalentOpportunities abound if qualified minorities apply

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Lance LaVergnevice president,

human capital management,Goldman Sachs

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words of Flo Yee, a financial industry recruiter, “When it comes to downsizing, Wall Street is color-blind.”

Such obstacles don’t negate what most observers call a real and sincere effort by the financial industry to make its workforce more diverse and multicultural. Of the companies participating in the 2003 survey, all of the large firms and 83% of the mid-sized firms reported having a management-level person dedicated to diversity. Some 83% of the large firms and 67% of the mid-sized companies had established diversity councils. All of the large and 92% of the mid-sized firms said they had diversity training programs in place.

Moving ForwardA 2005 Harvard Business Review article reported that in a survey of 2,443 women, nearly four in 10 highly qualified women said that they left work voluntarily at some point in their careers. Today, LaVergne says, the focus of many diversity efforts is on gender, mainly because women are both a larger demographic and more evolved politically and organizationally than blacks and Hispanics. “There are more women in the organization than any other minor-ity group. They have critical mass,” he observes.

However, LaVergne points out blacks are developing that same kind of momentum, and Hispanics are making rapid gains also. “Hispanics are becoming a larger proportion of the workforce and are more active politically,” says LaVergne. “African-American net-works are more evolved right now, but Hispanics are catching up.”

Mona Lau, global head of diversity at UBS, sees two important trends in the industry: First, she sees more companies involving business leaders in their efforts. While it’s important, she says, for a company to have a champion in the senior executive suite, “for diversity to take, business leaders have to be involved. It’s a key to success.” Second, she sees diversity and multiculturalism taking hold as global concepts.

At higher levels, executives say, diversity is spreading more slowly because of a relatively shallow pool of women and minority staff members to draw from. So, while companies are actively seeking recent minority graduates for the entry level, they’re also trying to strengthen their retention efforts through employee networks, surveys to measure real (and perceived) progress, and mentoring programs designed to help employees navigate the organization and achieve the visibility often necessary for advancement. In ad-dition, Lau says, companies are integrating their diversity efforts into the recruitment of senior business leaders.

The DriversWhat’s driving these dynamics? First of all, in the U.S., it’s the law. Equal Employment Opportunity is on the books, and ensuring their workforces have a representative pool of minority talent is a public, measurable way for companies to demonstrate their compliance.

From that beginning, a deeper movement has emerged as the characteristics of both the financial customer base and the employee talent pool have evolved. While some companies are driven by the long-term vision of their leadership, others face market demographics that apply real business pressure to ensure diversity. “Companies want customers to be able to identify with them and their workforce,” says Tanya Hinton, president and chief executive officer of Diversified Search Services of Chicago. “In retail, you want to see people who look like you.”

Companies whose focus is on the higher-end consumer, who is very often older, white and male, face less pressure to diversify. Peggy Hazard, managing director of Simmons Associates, a consulting firm focused on issues related to diversity, culture and organizational development, says, “Success comes from treating it like a business issue and holding people accountable. Companies focusing on the higher-end investor don’t always have as strong a business case to push it because of the demographics.”

Getting Beneath the SurfaceOf course, for the job candidate, what matters isn’t what’s on the company’s website so much as what’s going on in the workplace. “Sometimes the right things are on the website, but the culture hasn’t caught up,” Hinton says.

How can candidates be sure that what they’re experiencing during a job interview reflects the true company culture? “First, do your research,” says Merrill’s Wamai. When visiting a firm, be aware of the people you’re meeting with and how they compare to the rest of the office. Interviewing with three black professionals who appear to be the only ones in the office is probably not a good sign, she says.

Wamai suggests asking questions and listening for consistent answers, and meeting as many people within the company as you can, even if they’re not in your core area of interest. “The best test of a company is its people and alumni,” she says. “Are the people you’re seeing serious, real line people? Do you get to see the real company?” Read the company’s annual report and website and study its board of directors and executive management to get a sense of the diversity within the upper ranks. “You really have to look beyond,” she says.

Hinton suggests researching the company’s retention rate among minorities and women. You want to find out “not just do they have diversity hires, but do they retain minorities as well?” she says. Taking advantage of professional and minority networks to talk with people in the company is another way to learn whether its culture truly embraces diversity, she says. “You really have to get in there to see how it’s all working in practice.”


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EFC_CIFM_090605.indd 51 9/6/05 8:53:22 PM

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53

Apart from the obvious benefit to in-vestment banks of having a workforce that mirrors their myriad markets, there’s a pressing reason for these firms to consider candidates from groups other than the old-fashioned banking template of highly qualified white male.

McKinsey and Company published a report in April 2001, stating that the number of workers in the U.S. who are 35-44 years old will decline by 14% over the next fifteen years. The situation is

worse in Europe, with a 21% drop in the U.K., 27% in Germany and 24% in Italy, according to the U.S. Bureau of the Census.

What this means is that, as baby boomers retire, there will be a smaller number of workers to fill their positions. There is little doubt that investment banking’s senior talent pool will likely shrink dramatically, as this demographic shift creates a management black hole for some institutions. Conversely, it may also open up opportunities for a far wider range of candidates suitable for top-notch careers in finance in banks with a keen eye on the future.

Financial Markets ImplicationsThe data has huge implications for all business, banking included: There’s a gaping hole where a hefty percentage of the financial world’s future professionals need to be. That hole has to be plugged, and a positive side effect of this is the opening up of financial career opportunities to women and ethnic minorities.

Enlarging the talent pool to include people of all backgrounds has significant upside for employers. In an increasingly globalized world, the markets for sophisticated financial products are ex-panding dramatically, and it makes sense for banks to hire people who understand and can participate in those growing markets. Restricting options to a particular group of individuals means that firms cannot compete with organizations that have adapted and transformed themselves to mirror the marketplace. And if hiring options for the management stratum will shrink by 14% in the next fifteen years, expanding the available talent pool is the only way forward.

Steady ProgressIt isn’t so very many years ago that women in banking were considered to be more suited to secretarial and clerical work, to many women’s intense frustration. Now there are more women climbing the corporate ladder, and some of them scaling dizzying heights. It is the same for people of color who are advancing in the banking world.

The banks are hungry for graduates of color, and that hunger may only increase as the baby boomers retire. As more minority em-ployees enter the financial arena, there is a need to underpin this progress with a strong supply of future employees, and outreach programs are in place to identify, encourage and support these students.

ML4T: Management Leadership for TomorrowIn a push to help more minority candidates apply to top business programs, diversity organizations such as ML4T (Management Leadership for Tomorrow: www.ml4t.org) are challenging young students to consider a field traditionally considered difficult for minorities to enter. Programs designed to help students make the right educational decisions, and to gather skills they will need in pursuing their dreams, are reaping rewards.

ML4T CEO John Rice says, “ML4T’s Career Preparation program prepares high-achieving minority college juniors for placement in the leading entry-level business-related jobs that lead to admis-sion to top MBA programs and positions of influence in business and the community.”

College juniors in the program begin a comprehensive curriculum designed to identify career opportunities that fit best with their interests and strengths; develop the skills, competencies and at-tributes that hiring organizations require; and prepare them for the job search and interviewing process during senior year, Rice added.

Robert A. Toigo FoundationThe Robert A. Toigo Foundation (www.toigofoundation.org) sup-ports exceptional minority business degree students and alumni within the finance industry through scholarships, mentoring, internships and job placement. Working in partnership with the nation’s leading academic and financial institutions, the founda-tion seeks to foster diversity in the global marketplace and to pro-mote ethics, integrity, community service, and business leadership skills through the careers of talented individuals.

The foundation provides financial support and mentoring for students, alongside leadership development, with a view to bring more diverse populations into finance. It offers an expanding network of peers, professionals and friends sharing their business know-how and contacts, according to the organization’s website.

Sponsors for Educational OpportunitySponsors for Educational Opportunity (SEO), founded in 1963 (www.SEO-usa.org), has helped over 3,500 students of black, Hispanic/Latino, Asian and Native American origin from New York City public high schools. According to the organization’s website,

Enlarging the Talent Pool: Necessity, Not LuxuryThe workforce is shrinking and investment banks have to change


EFC_CIFM_090605.indd 53 9/6/05 8:53:23 PM



SEO helps motivated students of color with “academic enrich-ment, college guidance and leadership development” and provides them with the help they need to gain admission to and succeed at selective colleges and universities. Some 700 high school students are helped in this way each year, with over 93% of those going on to graduate from high school in four years. Of those students graduating, 90% continue on to college.

Assistance with study skills, essay writing, debating, and entrepreneurship, is given to eligible students to enable them to navigate the process from school through to their chosen career.

All Things Being EqualPrograms such as these are making a great difference to students

who would not otherwise have considered careers in finance, encouraging more and more able youth to expand their horizons into hitherto undreamed-of areas. Those who secure jobs in financial careers will be well-positioned to advance and develop in the coming decades.

All things being equal, financial institutions will have prepared a raft of diverse employees ready, willing, and able to reach the upper echelons. They will then be able to fill the management and skills gaps created by the baby-boom flight into retirement. When the time comes, banks will be in much better shape to field a truly diverse and representative workforce.

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One of the world’s largest financial concerns, Zurich-based UBS views diversity through a wide-angle lens. According to the company’s global head of diversity, Mona Lau, the issue isn’t only about gender and race, but culture, background, age, perspective and ways of thinking. As a company, “we’ve embraced diversity in its whole spectrum,” says Lau.

She says the firm strives to knit diversity into operations through-out the world, attracting, retaining and developing employees of all backgrounds through an approach she describes as “top down, bottom up, full integration.”

From the Top DownWhen Lau says “top down,” she means the very top. At UBS, the leading voice for diversity is Chief Executive Officer Peter Wuffli, who not only sees diversity as a necessary component of the com-pany’s success, but also saw to its inclusion as one of the firm’s 10 corporate values. For the record, the other values are client focus; entrepreneurial leadership; ambition, energy, fun; innovation and learning; partnership; meritocracy; corporate responsibility; integrity; and privacy. While UBS diversity strategy when Wuffli was appointed CEO in 2001 varied by region and business unit, it was Wuffli who championed the company’s broad, unified vision by identifying a business need to build a single culture.

Since Wuffli took over, observers have seen a difference. Terrence R. Simmons, CEO and managing partner of Simmons Associates, a consulting firm focused on issues related to diversity, culture and organizational development, says: “In the last few years, their name has moved to the top levels for diversity among financial organiza-tions.” Ana Herrera-Malone, marketing and development director of the National Society of Hispanic MBAs, lauds UBS for the support it has given to her organization. “They have a very strong program to target diversity,” she says, adding that UBS sits on her organiza-tion’s advisory board and is “very receptive” to hearing new ideas.

With net profit of $6.4 billion in 2004, UBS is the kind of company the industry keeps an eye on. The firm offers wealth management and business banking, investment banking and asset management services through offices in the Americas, Europe, Asia, Africa and the Middle East. According to The Wall Street Journal, it employs more than 68,000 people as client advisors, researchers and ana-lysts, traders, asset managers and commercial bankers, along with attorneys, compliance professionals and support staff. Nearly 39% of its workers are in the Americas, says UBS. Another 38% are in Switzerland, with 16% in the rest of Europe and nearly 7% in Asia. In the U.S., UBS boasts over $598 billion in invested assets, more than two million private client relationships, and a network of over 7,400 financial advisors in over 360 branch locations. UBS says it doesn’t publish the proportion of women and minorities in its workforce.

Diversity TestOne way to test a firm’s commitment, recruiting and organizational professionals say, is to gauge whether it treats diversity as a business issue and holds people accountable for its progress – or lack thereof. The leaders go beyond hiring representative numbers of women and minorities. They support employee networks, reach out to different candidates through focused career fairs and advocacy groups, and involve business leaders and line staff – not just the human resources office – in their efforts. “It takes money and time,” says Simmons, adding that companies see a return on investment as their ability to attract and retain the best talent increases and the demographics of their markets evolve.

Many firms first focused on diversity to ensure they were in com-pliance with federal law. From that beginning, executives began to believe diversity had to be treated as more than a legal require-ment if the industry was going to change along with its customer base. And the customer base was indeed changing, albeit slowly, from being mostly older, white and male to truly cross-cultural and cross-generational. Meanwhile, Lau observes, technology and a wide range of mergers turned the industry into one that took on a more global world view. Whether they involved gender, color, race, nationality, age or disabilities, cross-cultural issues became increasingly important, especially for banks and other firms whose customers’ heritage were as varied as the neighborhoods and cit-ies hosting their branches. Tanya Hinton, president and CEO of the recruiting firm Diversified Search Services of Chicago, says, “Most companies have diverse customer bases and want customers to be able to identify with them and their workforce.”

Most observers say that for a company’s efforts to be effective, they must be led by people outside of HR. Otherwise, the work runs the risk of being tagged as an “HR issue,” something that’s not so important in the “real world.” UBS’s 10 regional diversity boards are each headed by a business leader. For example, the U.K. regional diversity board is headed by Mike Bolin, chief admin-istrative officer of UBS Investment Bank. The company established the regional diversity boards to ensure its Global Diversity strategy is tailored to meet local areas of focus. In Switzerland, the focus has been on women and age. In the Asia-Pacific region, the prior-ity has been on hiring and developing local talent. And in the U.S. and U.K., ethnicity has been the primary target.

Lau believes the true objective of diversity is simple: It’s about be-ing open-minded, accepting people for who they are, and allowing them to flourish. No matter what the origins of a firm’s efforts, she says they can only succeed when diversity is an integrated part of the organization’s culture. At UBS, “we want to go to the point where the diversity function, per se, will cease to exist” she says. “We want diversity to be so fully integrated into everything we do,

Bank Profile: UBS Embraces Diversity at All Levels Led by a CEO with a global vision, UBS works to knit diversity into every aspect of its operations


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Mona Lauglobal head of diversity,

UBS

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it becomes part of the mainstream. It might take five or 10 years to get there, but that’s our vision.”

From The Bottom UpIf Wuffli sets the tone from the top down, UBS’s grass-roots em-ployee networks exert their own pressure from the bottom up. Set up around the world, the networks, says Lau, keep management focused on attracting, retaining and mentoring a multicultural workforce. The company says members of these networks gather regularly for workshops and events, panel discussions and to do volunteer work.

In many instances, the networks were formed by employees them-selves, with encouragement from UBS management. For example, in 2003 black and Hispanic employees in the U.S. formed the Mi-nority Leadership Council to strengthen the company’s recruitment efforts on college campuses and to formalize mentoring programs for staffers once they’d been hired. The company says that today the group’s strategy of reaching out to job candidates and support-ing the career development of new hires is being implemented across the firm’s U.S. business units.

The company’s women’s network, “All Bar None,” began in the U.K. in 2000 and grew to include chapters in New York, Stamford and Chicago. Other women’s networks are at work in Hong Kong, Seoul, Tokyo, Switzerland and the Pacific Rim. These groups, says Karen Harris, one of the organizers of the UBS Hong Kong Women’s Network, are meant to be “more than a social club.” They strive to “create a relevant agenda for the network going forward – one that responds to the needs of all employees.”

UBS’s British employees formed the Cultural Awareness Network to “facilitate employee discussion and promote company-wide aware-ness and understanding of cultural issues.” While the network seeks to raise cultural awareness within the company, it says it supports the personal development and effectiveness of all employ-ees, regardless of their cultural background, and works to ensure the company continues its efforts to develop cultural awareness.

Finally, UBS employees organized three gay and lesbian networks – one in the U.S., one in Britain and one in Switzerland. Open to all employees, regardless of their sexual orientation, the network supports those interested in gay and lesbian issues and assists the company’s recruitment, diversity training and mentoring efforts.

Such networks can be effective ways for companies to in-crease their diversity and enhance the opportunities afforded to employees, observes Ana Herrera-Malone of the National Society of Hispanic MBAs. Simmons Associates’ Terry Simmons notes that having networks, in and of themselves, doesn’t ensure success. “When companies create a win-win relationship with the networks, when there’s a real business relationship and a

well-defined business purpose on both sides, it works,” he says. As an outside observer, he notes that UBS reports effective use of such groups.

Full IntegrationUBS takes diversity into consideration at every step of the employee lifecycle, beginning with its approach to the talent pool from which it is recruiting and moving up through the hiring, development and retention of employees at all levels. “This means actively seeking out diverse candidates for every opening as well as giving all talented individuals opportunities for career develop-ment,” explains Lau.

For example, the company holds ‘Skills and Strategies for Success’ workshops for minorities, and offers a ‘Mentoring Up’ program for senior managers, which pairs executives with a staff member of different background or gender.

While training in diversity is an important component of the UBS strategy, Lau stresses the company’s training has moved “way beyond” simply making sure that staff members are aware of diversity issues. In training, she says, the company’s goal is to “give managers more tools, to make clear exactly what we want people to do – to move beyond the awareness.” The company is now rolling out a training program that uses actors to challenge managers to think about how they make hiring decisions and how they handle feedback conversations with diverse employees.

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58

Paul Welch is a research analyst for Ariel Capital Management, a Chicago-based institutional money management and mutual fund company with more than $21 billion in assets. Founded in 1983, the firm is well-regarded by ratings firms. In 2004, Lipper Inc., rated the Ariel Fund first out of 17 small-cap funds, and both the Ariel Fund and the Ariel Appreciation Fund garnered four-star overall ratings from Morningstar.

Welch, 30, joined Ariel in July 2005, two weeks after receiving his MBA from the University of Chicago’s Graduate Business School (Chicago GSB). His job involves researching companies that are either prospective investments or firms that are already a part of the company’s family of funds.

Welch spends much of his time following the news – general economic and business news and narrower developments related to the industries and companies in which Ariel has invested. “I have to make sure I’m up-to-date on events around our holdings or prospective purchases,” he explains. Throughout the day, he focuses on a handful of firms, often talking to industry experts to verify what he gleans through the media or hears from the companies themselves.

Learning ExperiencesWelch received his Bachelor of Science in Economics from University of Pennsylvania’s Wharton School in 1997. His first job was at the PFM Group, a Philadelphia-based company that advises municipalities on debt financing. From there he moved to the private equity firm Hamilton Lane, and while there earned his Chartered Financial Analyst designation. Though he was always interested in business and finance, he kept himself open to new ideas as he worked. First jobs, he notes, are learning experiences: “As you get more experience, you learn more about what you’re passionate about.”

Around this time, he picked up the book Investment Leadership by Jim Ware, which examines leadership practices in financial companies. Among the companies featured, Ware lauded Ariel for its approach to day-to-day operations and emphasis on teamwork and communication. The more Welch researched the company, the more he thought it would be a good place to work. Ware had quoted the head of career placement at the Chicago GSB in his discussion of Ariel and from this fact Welch concluded the com-pany and school had a strong relationship. He applied to Chicago as a step toward working his way into Ariel.

Culture and ValuesIn graduate school, Welch became involved in several networks for minority students. Among other things, he served as the corpo-rate relations chair of the campus’s African-American MBA Asso-ciation chapter. It was at a convention of the National Association

of Black MBAs that he met his first contact from Ariel, a research analyst. As community relations chair for the Chicago GSB, he was able to observe the community work of a number of companies, and Ariel’s commitment struck him as exceptional. He thought the firm had the same kind of “strong commitment to community” and practiced the “same kind of values” he has himself.

As a job candidate, “when I looked at a company, I wasn’t just looking at the company and its rankings,” Welch says. “You have to look at culture, values – so many things.” Ariel, he decided, had “a wonderful business model” based on focus and patient invest-ing, and a strong commitment to building and maintaining a collab-orative and cohesive team. “So many companies talk about teams, but Ariel’s really built a culture around their ideals,” he says.

Research and CommitmentHis good feelings about Ariel didn’t keep him from doing his research: He visited the firm five times before it even had a job opening, and continued to probe his network for intelligence. “I’d recommend such an approach to anyone interviewing at a com-pany,” he says, adding that it’s important for a candidate to feel they have a good fit not only with the company’s culture, but with the manager they’ll report to and the company’s top leaders.

In the time since he joined Ariel, Welch’s commitment has only strengthened. His ambition is to become a portfolio manager there then work his way further up the ranks. “I’d like to spend my career at Ariel,” he says.

Advice to GraduatesWelch’s advice to graduates: “First, coming out of your under-graduate years remember you have a long way to go and always have something to learn.” If you get frustrated in your current job, resist the temptation to “just quit,” he says. “Have a long-range plan and keep everything you do in the context of that plan. Don’t make rash decisions.”

Finally, he believes candidates are distinguished by their prepara-tion. “Firms can teach you what they need you to know,” he ob-serves. “If it comes down to two smart people, at the end of the day they’ll pick the one who’s prepared and done his or her homework.”

Culture and Shared Values: Finding the Right Fit A research analyst does his due diligence

Paul Welchresearch analyst,

Ariel Capital Management

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Career Path: Merrill Lynch MD, Multi-Product Derivatives Sales

Amy Ellis-Simon is a managing director and head of the multi-product derivatives sales team in the Americas for Merrill Lynch. She says you have to hustle to get ahead.

My banking career began when I came to Merrill in 1993 as an intern. I was a history major at the University of Michigan, so my financial market knowledge was limited at best when I arrived. A good and trusted friend had told me an internship on Wall Street would change my life and he was absolutely right!

The energy on the trading floor was what really piqued my inter-est. As a former athlete, the vigor of the floor suited me pretty well. I interned on the convertibles sales and trading desk, loved it, and after joining Merrill full time in 1994, spent the next 11 years there!

There were a few ups and downs during that time, and when I came back after the internship, things were distinctly down. I’d been hired in a bull market, but in 1994 I came back to a very bad bear market. I was fresh out of college and scared to death. Looking back now though, it was phenomenal timing: I got great exposure and more opportunity, sooner.

An ApprenticeAt the start I was an apprentice: I spent all my time watching and learning. There’s no class to teach you how to become a salesper-son; you just have to learn from the people around you. The desk was an eclectic mix of people, all very commercially focused, all very successful, but all very different. They were literally printing money, but they were doing it in very different ways.

For example, some salespeople were extremely aggressive: They wouldn’t get off the phone until they had an order. Some were more strategy focused, and some just had unbelievably deep client relationships.

Did I adopt any particular style? If anything, I like to think I have a balanced approach: It’s about providing consistent solid service, and making smarter calls. The industry is highly competitive and it’s becoming much more difficult to stand out.

I started making my first client calls within the first year of join-ing. But nothing hit home quite like booking my first trade: An insurance company bought Waste Management bonds. I’d spent all that time listening to the other salespeople, learning about con-vertibles and taking exams, but suddenly I was doing it for real. It felt like something had clicked.

Value and LeadershipIn the 11 years I spent on the convertibles desk I was promoted from analyst to managing director. At the end of the day, if you want to get ahead you need to be excellent at what you do and to offer real added value. You also need to be a leader in the firm,

and to believe in the team. We definitely were an eclectic bunch, which was one of the real pleasures of working on the desk.

Spring 2005, I was given a new position as head of the new multi-product sales team. I’d let the firm know that I was interested in a leadership challenge, and I couldn’t have asked for more. Our effort is one-stop shopping for institutional investors interested in searching for opportunities across all asset classes: We have experts in credit, convertibles, and equity derivatives. We’ve been given great support from all areas of the firm and clients’ reactions have been extremely positive.

ChallengesFinding balance may be my biggest challenge. I am a wife and mother of two young boys. I have incredible support from my husband – my biggest supporter and best coach. Having a family and outside commitments helps me do my job better by providing valuable perspective.

What does it take to make it in sales? At the end of the day you need enthusiasm, a strong work ethic, opinions, and courage. This is a people business: You need to get someone over a hump and encourage them to make a decision that they would not have made without your help. No matter how smart and talented you are, at the end of the day you have to hustle. It’s not easy to break into sales: The business is smarter, the competition is smarter, and the customers are smarter.

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Amy Ellis-Simonmanaging director,

Merrill Lynch

Typical Workday

5:30 am Leave home

6:30 am Take the ferry

6:45 am Arrive on the desk

7:00 am Review ML research/news

7:30 am Morning meetings

7:45 am Start making client calls

8:00 am Clients begin trading

4:00 pm Equity market closes

4:30 pm Evening meetings/day review

6:00 - 9:00 pm Client entertaining / ML commitments (twice weekly)

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Career Path: Sanford Bernstein Associate Analyst

Todd Buechs is an associate analyst at Sanford C. Bernstein, the independent research firm. He explains how he moved from the Marines to Goldman Sachs, Sanford Bernstein via Home Depot, and how persevering will never let you down.

If you want to work in equity research, you can’t be afraid to have an opinion. As a sell side analyst I have realized that clients pay for an opinion, for information and analyses they can trade on.

What does an associate researcher do? Day to day it’s a question of working pricing models, keeping up with company earnings, conducting channel checks within the industry and making informed projections about the future. I’ve been in this role for a little over a year.

Marines Training My professional career began in 1987 when I graduated from the U.S. Naval Academy and joined the Marines. During the next 12 years I progressed from the rank of Lieutenant to Major and served in a variety of positions. During my career, I traveled the globe and participated in the first Gulf War.

When people ask what I got from the experience, I can point to plenty of positives. First of all I learned about myself – my strengths and weaknesses, and as importantly I learned leader-ship skills. I learned to make judgment calls, to have the integrity to stand by my decisions, and to make decisions quickly.

If I hadn’t been a marine I do not believe I’d have been nearly as successful in life. But after 12 years, I needed a change. I looked at peers who had left the service and how successful they’d been, and decided it was time for a new phase in my professional development.

From MBA to Goldman In 1999 I went to The Tuck School at Dartmouth College to earn an MBA. I had planned to go into consulting, but quickly realized that my skills and personality were better suited to sales and trading. In 2001, I accepted an offer to trade equity securities at Goldman Sachs and based my decision on Goldman’s reputation and the strong Tuck alumni network.

I began trading listed securities and later transitioned to Nasdaq technology securities. After September 11, 2001, volumes were depressed and there was a lot of confusion about what was going to happen; it was a tough environment and there were several rounds of layoffs. My own career as a trader came to an end in November 2002, during the fourth round of reductions.

The great thing about Goldman was that as a junior trader I was given a lot of responsibility. In my last memorable trade at Gold-man Sachs, I handled a 17.5-million share order. That large order served to underscore my current opinion that electronic exchanges

are the future and cash traders were no longer critical to the majority of the daily equity trading volume.

When I was laid off, Goldman was extremely fair. I have a lot of respect for that. After I left Goldman, it took four months to get two offers of new trading roles – one on the buy side and one on the sell side. But I didn’t see a great future there.

Home Depot I looked around for other options. Home Depot, the household store, had a program for turning former military service people with MBAs into store managers. I began as an assistant manager. As a former Marine, I didn’t feel the responsibilities were beneath me, but I did start to think my education had equipped me for something more.

As I began to search for a position that better suited my educa-tion, I let a good friend from Dartmouth who worked at Sanford Bernstein know that I was interested in returning to finance. He introduced me to Brad Hintz, the senior banking analyst here, and the rest is history.

Don’t Give UpIf you’re looking for a job on Wall Street, my best advice is not to give up. I was very lucky: I knocked on one door and I got in. But there are plenty of other people who’ve knocked on hundreds of doors before they found the right one. Even if it takes a while, don’t say ‘It’s too difficult.’ I’m proof positive that there’s a position for everyone!

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Career Path:FWA President and Managing Director, JPMorgan

Kelly Mathieson, the president of the Financial Women’s Associa-tion (FWA) and a managing director at JPMorgan Chase, is senior business executive for JPMorgan Invest Inc. She says career success comes largely from knowing how to network inside and outside the corporation.

I have had an extraordinarily lucky and rewarding career at JPMorgan. I am 39, younger than most in my line of business and executives at my level, and I think it’s fair to say that I am probably of the generation that is benefiting from a lot of the efforts and focus and removal of barriers by women ahead of me. I’m in that generation where I can see where that has happened. When I first started at JPMorgan, I knew the first female VP of the firm.

Now, I know there are women around me who are more senior in this organization who absolutely made the path clearer for me. I am in the generation where I can honestly say I have both male and female mentors and bosses and I don’t think there has been any instance where I didn’t feel properly compensated or re-warded. I’m in this in-between generation that has a great respect for the women who came before me. I feel a sense of obligation to them.

I became involved in the Financial Women’s Association and have served on its board since 1994. The FWA has influenced me far, far beyond just this one year that I am serving as its president. With FWA, I have the chance to network with people not only within my own organization, but also outside of it – and to really network in the general professional sense, not simply because of business or a responsibility to a common organization.

The FWA has really sensitized me to professional development and the need to continually grow. What’s nice about the FWA is that, from a different perspective, it gives access to leaders in the field. Developing your own leadership skills is something you need to constantly do. You change, so it’s reasonable that you need to keep emphasizing skills or developing new ones with people – dif-ferent disciplines, different perspectives and so forth.

You also need to build your network and your web of personal con-nections to get what you need, and to discuss issues with people, too. You will have more sound judgment and if nothing else, you’ll be able to reinforce a point more fully if you’ve examined it from someone else’s point of view.

In my own career, networking has been very important to my success.

Building a People Web I got my BS degree in management from Binghamton University and graduated with an MBA from NYU in May 1990. I really enjoyed going to school and getting the theoretical learning. I at-tended NYU from late 1987 until right after the crash, and it’s safe to say that if you wanted to be in the investment banking or capi-

tal markets arena, having an MBA was still the price of admission. I started working for Goldman Sachs upon my graduation from Binghamton in 1987 and it was convenient, as the NYU business school campus back then was still located downtown.

At Goldman during that time, I was a junior trading assistant in the money markets division. I liked it a lot. I liked the pace, the ability to focus on different markets and work in different market conditions in the course of any day. I like variety in what I do. As my career has gone on, I’ve worked as a product and marketing generalist rather than a specialist. I haven’t stayed in the same silo of disciplines. From very early on, I have liked the variety and learning about the markets.

I left Goldman in January 1990; I had already accepted a job offer to come into the capital markets training program at what was Chase at the time. I was stockbroking at Goldman but it’s not what I wanted to do, and Chase’s trading floor development program seemed a perfect fit. I’d rotate around different desks on the trading floor and gain practical knowledge rather than theoretical knowledge.

For the first five years at Chase, from 1990 to 1995, I worked in the capital markets division of the firm. I did currencies and commodi-ties and fund-to-funds work, the precursor to what are hedge funds now. The work was about structuring and marketing invest-ment and hedging products for the global client base of institu-tional and private investors, and that was wonderful. And what was really great was that at that age, my mid-20s, I was getting to travel around the U.S. and around the world and learning from the masters in the field how to structure products. This helped me build my network around the globe.

Global Networking In 1995, the second third of my career began. We moved capital markets into the custody division and I started a team called the Investment Products Group, which I was able to build up, manage, and use to bring capital markets to institutional customers. There, I was responsible, globally, for cash management, investment management, foreign exchange, futures clearing and trade execu-tion products for the global institutional client base. During this time, I traveled again but more as a manager of a business, so my travel during those five years was an opportunity to build a network at a different level.

It was during that second five years, as I was beginning to manage a business myself, that I developed the strongest professional network of connections that I have: peers of mine who also were managing businesses in their own right. Professionally, my work then was about the discipline of being a business manager and growing a business. That’s a generic conversation. You’re relying on someone’s wisdom and expertise, not as a competitor in a

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Kelly Mathiesonmanaging director,

JPMorgan Chase

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specific part of your company but more as one business manager to another. So, as we have all moved to different positions within the firm, this conversation among us can still happen. This is one of biggest things I gained.

I also gained the knowledge of how to build and manage a team, how to get into the mentality of team, team theory, and what it means to be part of a team. I learned how to distinguish strong individual contributors and yet understand the importance of con-nections among members of a well-structured team. And while I am so very proud of the people who work for me, when I got to my next role, which has been my career for the last five years, I put the best team together that I have ever seen professionally, the men and women working with me now.

You grow up in your career as you grow up in your life. There are some people now that work within my organization that I am prob-ably lucky to consider as friends.

In the last five years of my career so far, I began coming into my professional maturity. I am substantially more senior now than I was in the earlier stages of my career. I am the senior business executive for business at JPMorgan Invest Inc., a retail asset management business. We run three lines of business: an online brokerage; the retirement planning services business; and one that we’re building, which is also brokerage and retirement but for people less affluent.

A Career Regret I think the one regret I have, or the one career mistake I made, the one thing I didn’t pursue as aggressively as I should have or didn’t feel comfortable enough doing, was taking an overseas assign-ment. People who mentored me and who I admire here seem to have taken that chance early in life, so while it’s not costing me now, I do regret not having pursued that opportunity.

At the age of 24, that would have been easier to do than now. I’m so thankful I got my MBA when I did, but I wish I would have been a little bit more aggressive pursing the opportunity. I don’t know that anything would have come faster with regard to my career or my professional perspective, but I do think I would have had more first-hand knowledge and would have been more comfortable by having an even better understanding of different cultures and points of view.

What I love about my job right now are two things. First, we are building something that has incredible amounts of risk associated with it but it is supported within the organization, and we will be successful on our own merits. I personally find that more challeng-ing and invigorating than anything else.

The second thing I love about my job is the people I work with. I am surrounded by some of the most professional and accom-

plished people I’ve ever worked with in my career. I am in an environment that is supportive, challenging and invigorating in all the positive ways and I’m doing it with people I genuinely like and can learn from, regardless of the results of the business goals. It doesn’t get better than that, and I feel incredibly lucky.

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DiversityPlanning AheadFinding a JobSectorsOverview Careers Employers www.efinancialcareers.com

Once upon a time the given wisdom for a successful career in finance was for U.S. graduates to opt to work at U.S. financial houses. Taking a position at any other bank was seen as second-best, and your chances of making the jump back into an American bank later would be jeopardized.

That is changing. As a result of indus-try mergers and other market factors, recent big hirers on Wall Street are not the top name U.S. investment and uni-

versal banks, but a handful of ambitious international players. Do the likes of HSBC, BNP Paribas, ABN Amro and Barclays Capital have what it takes to retain new staff against their home-grown rivals? How do the cultures compare?

International Options“Genuinely international career opportunities” is the refrain of Keith Yardley at HSBC Securities in Manhattan. Yardley is head of U.S. campus recruiting and talent management at the firm, which is two years into a hiring spree that has added dozens of senior recruits since the start of the year. “Most of the people who come to work for us are attracted by our ability to move them interna-tionally,” he says.

The attraction for graduates is obvious – the chance to embrace a career which will give them the chance to travel and see the world at the same time as gaining valuable work experience.

Rightly or wrongly, “foreign” banks are perceived as having a more distinct and welcoming culture than many U.S. organizations. Gary Goldstein, chief executive of Whitney Group, an executive search firm in the financial services industry, says, “Many of the great American banking cultures have been pretty much destroyed. It’s one of the faux-pas of the past few decades. Banking used to be a very clubby industry, where people identified with the firm they work for. Not any more.”

Recruiters who bemoan the loss of Wall Street cultures tend to sing a similar tune: Mergers change corporate culture, and sometimes a bank’s business edge, for the worse. European banks seem to have largely escaped this stigma, and global players, such as HSBC and UBS, have managed to maintain their corporate identities in spite of explosive growth.

Pros and Cons of Globe-trottingGraduates with wanderlust can find themselves in places like Paris, Amsterdam, London, or Shanghai while they learn the ropes. It’s undoubtedly alluring to contemplate a day’s work while you munch your croissant and sip your coffee in one of Paris’ many

boulevard cafes, or step out for a quick dim sum from a hawker stall in China.

The downside for young employees is that they are often required to take examinations to comply with local regulatory demands on financial services professionals. Some of these exams require a great deal of study, which might cut down on time for enjoying the local flavor of their new place of work.

International banking may largely be conducted in English, but employees wishing to experience life in other countries will have to bone up on their languages unless they achieve a posting to an English-speaking environment. It might not be a problem at European banks for someone who’s studied French or German at school, but for further-flung postings which might require Manda-rin, Japanese, or Russian, it’s a significant hurdle. Not being able to communicate with the local population can lead to an isolated “expat” existence, which may defeat the purpose of visiting foreign countries.

Culture Shock?Different cultures can be problematic for someone who has not encountered life outside America’s shores – attitudes to work, strange customs, and those linguistic difficulties can perplex the new kid on the block, and it takes a degree of flexibility and patience to learn the ropes.

Even the U.K., which at least shares a common language with America, can be incomprehensible to U.S. citizens at times. For starters: biscuits with tea, not gravy; jam instead of jelly; waistcoats rather than vests – along with flavours and colours and neighbours all different to those flavors and colors and neighbors back home.

However, for the young and carefree, an international career which embraces travel to exotic places, and a working environ-ment with colleagues from a multiplicity of cultures is an appeal-ing challenge.

Going Global: International Career Options for GraduatesInternational career opportunities are no longer second-best

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Better to Go Bulge or Boutique at Career Start? Our financial markets expert panel tackles this classic dilemma

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Q. I’m in my second year of business school. I have one offer from a bulge bracket bank and a couple from boutiques. Which would be better for my career? I’m interested in both the long- and short-range considerations.

A. There’s no use separating what’s good for your career from what’s good for you as a person. Engage in an honest conversa-tion with yourself about your priorities and style. Are status and prestige at the top of your list? Is it all about the bonus? Do you thrive under rapid-fire challenges or do you prefer to order them more methodically, one at a time? Are you a passionate proponent of your best ideas, or do you favor a group-think approach?

The broad stereotypes of the bulge vs. boutique choice are easy to draw. Some believe that nothing beats the rigor and discipline of big-firm associate programs. Their formal, systematic approach to training new MBAs typically includes rotation through different groups, imparting a good overview of the business. They often run valuable mentoring programs and a variety of activities to help groom you as an up-and-coming professional. The big banks typi-cally pay more, too, and if you’re looking for status and prestige early in your career, this is where to find it.

What you probably won’t find in the bulge club is the opportunity to move up quickly and take a leading role. As a professional at a large institution, your best ideas may be discouraged and you may have to give up credit or edit your thinking just when you feel most passionate about something.

At a boutique, you can expect to function somewhat less like a peon. Boutiques take fewer recruits from business school, however. In these leaner shops, you may dig your teeth into very substantive work early on. You may find yourself shoulder-to-shoulder with some of the best and most experienced in their field. The interpersonal challenges are greater – but so is the chance for advancement.

It’s important to be aware that there are significant differences shop to shop. Is the bank on right trajectory or do things seem a bit shaky? Just as important, what is the group energy of the institu-tion at hand? What is the emotional tone, the nuances of personal integrity (or lack thereof) that characterize the human element of any business environment?

You can find positive group energy in the right department of a large firm or at the senior management level of a small firm. Make sure you do find it, though, because it will make all the difference in taking you – and your career – to the next level.

If you would like to pose a question to our panel of experts, please send an email to [email protected]

The Expert Panel

Maggie Craddock

Maggie Craddock is an executive coach to Wall Street professionals through Work-place Relationships. She is the author of The Authentic Career.

Kenneth Taber

Ken Taber is an employment law partner with Pillsbury Winthrop LLP.

Rod Williams

Rod Williams is the New York City job market consultant for Lee Hecht Harrison, a career and leadership consulting firm.

Peter Gonye

Peter Gonye brings 14 years of experience in investment banking and twelve years of executive search expertise to Spencer Stuart’s Private Equity and Investment Banking specialty practice groups.

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Employer EssentialsA snapshot of institutions operating within the financial markets

Company Address Telephone Graduate Number of Graduate Hires Graduates Summer Website Employees Per Annum Applicant Deadline Internships

ABN Amro 55 East 52nd Street, New York, NY 10022 212 409 1000 www.graduate.abnamro.com 95,000 globally Approx. 100 worldwide October 11, 2005 Yes

Banc of America Securities 9 West 57th Street, New York, NY 10019 800 432 1000 www.bofa.com/careers - - - Yes

Barclays Capital 200 Park Avenue, New York, NY 10166 212 412 4000 www.barcap.com/campusrecruitment/ 76,200 globally - - Yes

Bear Stearns 383 Madison Ave. New York, NY 10179 212 272 2000 www.bearstearns.com/careers 10,961 globally - - Yes

Bloomberg, Inc. 731 Lexington Avenue, New York, NY 10022 212 617 2000 careers.bloomberg.com 8,000 - - -

BNP Paribas - 212 841 3087 www.bnpparibas.com 14,000 Approx. 36 - Yes

CIBC World Markets 425 Lexington Avenue, New York, NY 10017 212 856 4000 www.cibcwm.com/wm/careers/ campus-recruitment.html 2,300 in New York - - Yes

Citigroup 383 Greenwich Street, New York, NY 10013 212 816 6000 www.citigroup.com/citigroup/oncampus - - Varies by school Yes

Credit Suisse First Boston 11 Madison Avenue, New York, NY 10010 212 325 2000 www.csfb.com/standout/ 18,000 in New York - - Yes

Deutsche Bank 60 Wall Street, New York, NY 10019 212 250 2500 careers.db.com 67,682 globally - - Yes

Franklin Templeton Investments 100 Fountain Pkwy., St. Petersburg, FL 33716 - www.franklintempletoncareers.com Approx. 6,975 globally - None Yes

Goldman Sachs International 85 Broad Street, New York, NY 10004 212 902 1000 www.gs.com/careers Approx. 21,000 1,000 + full-time & summer each Varies by school Yes

HSBC 452 5th Avenue, New York, NY 10018 212 525 3735 www.hsbcusa.com/careers 10,800 in New York - - Yes

JPMorgan 270 Park Avenue, New York, NY 10017 - www.jpmorgan.com/careers Approx. 17,000 in investment bank globally Approx. 300 - Yes

KeyBanc Capital Markets 127 Public Square, Cleveland, OH 44114 800 KEY2YOU www.key.com/jobs 19,300+ Approx. 50 (undergrad); 15 (grad) See website Yes

Lehman Brothers 745 7th Avenue, New York, NY 10019 212 526 7000 www.lehman.com/careers 19,579 - - Yes

Lincoln Partners 500 West Madison, Suite 3900, Chicago, IL 60661 312 580 8339 www.lincolnpartners.com - 8 (undergrad); 4 (grad) See website Yes

Macquarie Group 125 West 55th Street, New York, NY 10019 212 231 1000 www.macquarie.com 6,800 globally - - -

Merrill Lynch 250 Vesey Street, New York, NY 10080 - www.ml.com/careers Approx. 50,000 globally Approx. 450 (undergrad); 100 (grad) - Yes

Morgan Stanley 1585 Broadway, New York, NY 10036 212 761 4000 www.morganstanley.com/careers/recruiting 45,712 - - Yes

Piper Jaffray 800 Nicollet Mall, Minneapolis, MN 55402 800 333 6000 www.piperjaffray.com/ciscareers Approx. 3,000 Approx. 20 (undergrad); 10 (grad) See website Yes

RBC Capital Markets Corp. One Liberty Plaza, New York, NY 10006 212 428 6600 www.rbccm.com/0,,cid-16882_,00.html Approx. 1,000 15 (undergrad); 6 (grad) Varies by school Yes

UBS 677 Washington Blvd., Stamford, CT 06901 203 719 0629 www.ubs.com/graduates 26,000 Approx. 250 (undergrad & grad) October 15, 2005 Yes

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Company Address Telephone Graduate Number of Graduate Hires Graduates Summer Website Employees Per Annum Applicant Deadline Internships

ABN Amro 55 East 52nd Street, New York, NY 10022 212 409 1000 www.graduate.abnamro.com 95,000 globally Approx. 100 worldwide October 11, 2005 Yes

Banc of America Securities 9 West 57th Street, New York, NY 10019 800 432 1000 www.bofa.com/careers - - - Yes

Barclays Capital 200 Park Avenue, New York, NY 10166 212 412 4000 www.barcap.com/campusrecruitment/ 76,200 globally - - Yes

Bear Stearns 383 Madison Ave. New York, NY 10179 212 272 2000 www.bearstearns.com/careers 10,961 globally - - Yes

Bloomberg, Inc. 731 Lexington Avenue, New York, NY 10022 212 617 2000 careers.bloomberg.com 8,000 - - -

BNP Paribas - 212 841 3087 www.bnpparibas.com 14,000 Approx. 36 - Yes

CIBC World Markets 425 Lexington Avenue, New York, NY 10017 212 856 4000 www.cibcwm.com/wm/careers/ campus-recruitment.html 2,300 in New York - - Yes

Citigroup 383 Greenwich Street, New York, NY 10013 212 816 6000 www.citigroup.com/citigroup/oncampus - - Varies by school Yes

Credit Suisse First Boston 11 Madison Avenue, New York, NY 10010 212 325 2000 www.csfb.com/standout/ 18,000 in New York - - Yes

Deutsche Bank 60 Wall Street, New York, NY 10019 212 250 2500 careers.db.com 67,682 globally - - Yes

Franklin Templeton Investments 100 Fountain Pkwy., St. Petersburg, FL 33716 - www.franklintempletoncareers.com Approx. 6,975 globally - None Yes

Goldman Sachs International 85 Broad Street, New York, NY 10004 212 902 1000 www.gs.com/careers Approx. 21,000 1,000 + full-time & summer each Varies by school Yes

HSBC 452 5th Avenue, New York, NY 10018 212 525 3735 www.hsbcusa.com/careers 10,800 in New York - - Yes

JPMorgan 270 Park Avenue, New York, NY 10017 - www.jpmorgan.com/careers Approx. 17,000 in investment bank globally Approx. 300 - Yes

KeyBanc Capital Markets 127 Public Square, Cleveland, OH 44114 800 KEY2YOU www.key.com/jobs 19,300+ Approx. 50 (undergrad); 15 (grad) See website Yes

Lehman Brothers 745 7th Avenue, New York, NY 10019 212 526 7000 www.lehman.com/careers 19,579 - - Yes

Lincoln Partners 500 West Madison, Suite 3900, Chicago, IL 60661 312 580 8339 www.lincolnpartners.com - 8 (undergrad); 4 (grad) See website Yes

Macquarie Group 125 West 55th Street, New York, NY 10019 212 231 1000 www.macquarie.com 6,800 globally - - -

Merrill Lynch 250 Vesey Street, New York, NY 10080 - www.ml.com/careers Approx. 50,000 globally Approx. 450 (undergrad); 100 (grad) - Yes

Morgan Stanley 1585 Broadway, New York, NY 10036 212 761 4000 www.morganstanley.com/careers/recruiting 45,712 - - Yes

Piper Jaffray 800 Nicollet Mall, Minneapolis, MN 55402 800 333 6000 www.piperjaffray.com/ciscareers Approx. 3,000 Approx. 20 (undergrad); 10 (grad) See website Yes

RBC Capital Markets Corp. One Liberty Plaza, New York, NY 10006 212 428 6600 www.rbccm.com/0,,cid-16882_,00.html Approx. 1,000 15 (undergrad); 6 (grad) Varies by school Yes

UBS 677 Washington Blvd., Stamford, CT 06901 203 719 0629 www.ubs.com/graduates 26,000 Approx. 250 (undergrad & grad) October 15, 2005 Yes

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Company Address: 55 East 53nd Street, New York, NY 10022

Telephone: 212 409 1000

Graduate Website: www.graduate.abnamro.com

Company Address: 731 Lexington Avenue New York, NY 10022

Telephone: 212 617 2000

Graduate Website: careers.bloomberg.com

Telephone: 212 841 3087

Graduate Website: www.bnpparibas.com

Company Snapshot: Netherlands-based ABN AMRO is a leading international bank with over 3,000 branches in more than 60 countries and territories. ABN AMRO is listed on the Euronext and New York stock exchanges.

More information can be found at www.abnamro.com.

Financial Report: Total assets - Over Euro 700 bil-lion as of year-end 2004.

Headcount: Over 95,000 people worldwide with the Wholesale Clients Division employing over 17,000 in over 50 countries.

Graduates Hired per annum: 150 will be hired globally in 2006.

Approximate Graduate hires 2005: 100 worldwide.

Graduates are recruited into: A number of busi-ness areas globally that can include Capital Markets, Corporates, Derivatives, Equities, Fixed Income, Financial Institutions and Foreign Exchange.

Training offered: Our exclusive Academy in Amster-dam is the center for all training and development at ABN AMRO. The Graduate Development Program begins with an intensive six-week course there, to provide an overview of ABN AMRO and prepare you for your career with us. Through a combination of specialist technical training, personal skills develop-ment and practical casework, you’ll gain an early but thorough insight into our products, client services, structure and strategy.

Internship Info: We run a range of different intern-ship programs all over the world, lasting between two and six months.

Skills Required: Undergraduate degree in Finance, Economics, or a related field.

· Minimum GPA of 3.4, involvement in extracur-ricular activities

· Strong analytical and communication skills, attention to detail

· Ability to work well with others in a fast-paced, global environment

Application Deadline: Applications should be submit-ted to [email protected] no later than October 11, 2005.

Company Snapshot: At Bloomberg, each of our 8,000 employees embodies the excellence and intel-lectual curiosity that we are known for. We demand much of our people; they are treated with the respect that they have earned by building us into a world leader in our industry. We give them every advan-tage in their careers, with top-flight education and windows for advancement. All this means that we create an environment in which you have unparal-leled opportunity to excel.

We have many arenas in which you can shine. You can work for our core business, the Bloomberg Professional® service, or join the teams of any of our media products, from our television and radio networks to our magazines and books. We have a reputation for excellence worldwide, and our employ-ees are the key to maintaining our reputation.

Take a look at who we are. The challenges. The rewards. The opportunity. We know you’ll like what you see.

Headcount: 8,000 employees

Training offered: At Bloomberg we offer our employees a wide range of training and career devel-opment opportunities. Our internal repository, Bloom-berg University, is a place where employees can go to search for instructor-led training, self-study courses and other special training events. Regardless of your job function, we’re devoted to helping you develop your career. Whether you’re interested in sharpening your technical skills or learning how to contribute more effectively, BU has something for you. We offer skill-building courses in employee development and job-specific courses in financial markets, sales, news, PC/technical training and our products. Bloomberg is truly a company that believes leaders can be made. If managing people is your passion, our Leadership Development track is structured so that employees in any stage of their supervisory career can benefit. We have three levels of courses that will enhance your skills and build a strong awareness of what it takes to be a mentor, coach and leader at Bloomberg.

Company Snapshot: BNP Paribas is one of the world’s leading diversified financial institutions. The bank is the largest in the eurozone by net income and 3rd in the world by total assets. The North American operation is a critical component to this strategy with over 14,000 employees across the continent. BNP Paribas’ activities in the U.S. include Corporate and Investment Banking, Retail Banking and Asset Management and Services.

Financial Report: Please see www.bnpparibas.com for annual report.

Headcount: 14,000 in North America

Graduates Hired per annum: This is a new pro-gram for the U.S. Our goal is to double the number of hires in the next year.

Approximate Graduate hires 2005: In 2005, we hired a class of 36 for the new Analyst and Associate Program in the U.S.

Graduates are recruited into: Sales & Trading, Corporate Investment Banking, Research, Finance.

Training offered: 5 week intensive training includ-ing: 30 to 50 hours of on-line product specific pre-course work, 2 weeks of intensive product training, post-course study, orientation and company overview, business/technical related coursework based on level and position, professional development courses (busi-ness writing, negotiation, selling and presentation skills), team building and multicultural awareness.

Internship Info: 12-week formal internship develop-ment program.

Skills Required: Strong analytical and quantitative skills, excellent leadership and communication skills, team oriented individuals with interest and desire in financial markets.

Application Deadline: For consideration, please contact your individual campus career service office for application deadlines or submit your cover letter and resume indicating area of interest to [email protected].

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Company Address: 100 Fountain Pkwy., St. Petersburg, FL 33716

Graduate Website: www.franklintempletoncareers.com

Company Address: 270 Park Avenue, New York, NY 10017

Graduate Website: www.jpmorgan.com/careers

Company Address: 127 Public Square, Cleveland, OH 44114

Telephone: 1 800 KEY2YOU

Graduate Website: www.key.com/jobs

Company Snapshot: Franklin Resources, Inc. is a global investment management organization known as Franklin Templeton Investments. Our headquar-ters are located just south of San Francisco, in San Mateo, California. We have offices in 29 countries around the world and offer investment solutions and services in more than 100.

We offer investment solutions under the Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust and Darby Overseas names. We manage investment vehicles for individuals, institutions, pension plans, trusts, partnerships and other clients.

Our common stock is listed on the New York and Pacific exchanges under the ticker symbol BEN. We’re also on the London Stock Exchange under the symbol FRK.

For more details about our company, please see our Annual Report or the visit the Corporate Governance section of our website at www.franklintempleton.com.

Financial Report: To view our financial report, please visit us online at www.franklintempleton.com.

Headcount: There are approximately 6,975 employ-ees globally.

Internship Info: Take advantage of our outstanding career opportunities, like our unique Futures Program for new graduates. This rotational, cross-functional training program gives you access to vast on-the-job experience, dedicated mentors, and a committed sup-port system that encourages your best work.

For more information, visit our website at www.franklintempletoncareers.com.

Skills Required: Whether you are an experienced professional or just embarking on your career, you owe it to yourself to consider a career with Franklin Templeton Investments. As an experienced leader in the investment management industry, we offer an environment that is positive and diverse.

For a complete list of openings, please visit our website at www.franklintempletoncareers.com.

Franklin Templeton Investments is an equal opportu-nity employer and will consider qualified applicants for employment without regard to race, sex, religion, color, national origin, ancestry, disability, medical condition, marital status, age, sexual orientation, veteran status, or any other basis protected by law.

Application Deadline: None.

Company Snapshot: JPMorgan’s global client franchise, built over 200 years, is the foundation of our business, and distinguishes us from our competitors. We serve over 7,500 clients in over 100 countries, which is one of the broadest client franchises in the industry. We have the ability to deliver the breadth of the firm’s capabilities, tailored to the needs of diversified clients in local markets. We put our clients’ interests first as we provide them with the best advice and solutions for their long-term needs. JPMorgan has an award-winning reputation in the industry as an influential banking and business innovator. Our analysts and associates play a key role in sustaining this reputation and growing the busi-ness. As a firm that relies on the quality of its talent, we are committed to investing in each employee’s professional development.

Headcount: Approximately 17,000 employees in the investment bank globally.

Approximate Graduate hires 2005: 300 full-time, 300 summer

Graduates are recruited into: We offer full-time and summer opportunities in Corporate Finance, Sales & Trading and Research for advanced and undergraduate degree candidates. PhD candidates are offered opportunities in Quantitative Research and Fixed Income Strategy.

Training offered: Our programs are widely accepted as the best in the global finance sector, taught by top industry professionals and our own most experienced and inspiring people. We leverage a full range of teaching methods (lectures, case studies, hands-on exercises, & simulations). Our training closes the gap between theory and practice. Advanced professional certification is supported. We encourage deeper skill set development through continual training op-portunities that keep employees on the cutting edge of investment banking.

Skills Required: Candidates who are intellectually curious, results-driven, team-oriented, innovative, client focused, with well developed analytical, com-munication, and leadership skills, and an ability to work in a fast-paced team environment. Demonstrat-ed academic excellence and solid work experiences are crucial.

Company Snapshot: Cleveland-based KeyCorp is one of the nation’s largest bank-based financial services companies. Key companies provide invest-ment management, retail and commercial banking, consumer finance, and investment banking products and services to individuals and companies through-out the United States and, for certain businesses, internationally.

Financial Report: Please visit www.key.com for up-to-date details.

Headcount: 19,300+ employees across the U.S.

Graduates Hired per annum: Undergraduate hires approx. 50-75; Graduate hires approx. 15-20

Graduates are recruited into: Undergraduates will be hired into a rotational training program throughout various businesses. Associates will be hired into Diversified Industries, Energy, Consumer, Industrial, Healthcare, Financial Services, Technology and Merg-ers & Acquisition.

Training offered: For the KCIB Analyst program, you’ll hone your skills during a 12-week initial train-ing program in financial accounting, corporate finance theory, cash flow analysis, credit/risk analysis, finan-cial modeling, valuation and business writing. To develop your skills in credit, sales, business analysis and corporate finance, you will rotate through the lines of business that make up KCIB. These include: Real Estate Capital, Institutional Banking, Global Treasury Management, Fixed Income, Bank Capital Markets, KCIB Administration, Commercial Banking, Syndicated Finance, Equity Capital Markets and Portfolio Management.

Internship Info: Summer internships are available for both undergraduate and graduate students. To learn more about these opportunities, please visit our website at www.key.com/jobs or email [email protected]

Skills Required: Key recruits high achieving gradu-ates from all degree disciplines who are looking to build a career in the financial services industry. Candidates should be able to thrive in a challenging and stimulating environment, possess the ability to work independently as well as in teams, and perform under pressure. Candidates should also be able to demonstrate their commitment to working in the fi-nancial services industry by means of their education and work experience. Please visit our website www.key.com/jobs for more information.

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Company Address: 500 W. Madison, Suite 3900, Chicago, IL 60661

Telephone: 312 580 8339

Graduate Website: www.lincolnpartners.com

Company Address: 125 West 55th Street, New York, NY 10019

Telephone: 212 231 1000

Graduate Website: www.macquarie.com

Company Address: 250 Vesey Street, New York, NY 10080

Graduate Website: www.ml.com/careers

Company Snapshot: Lincoln Partners is a Chicago-based investment banking firm focused on middle-market mergers and acquisitions advisory services and private capital raising. We offer a rewarding and challenging work environment that allows individu-als to learn, grow and develop professionally and personally.

Headcount: 57

Graduates Hired per annum: 4 (MBA level); 8 (undergrad level)

Approximate Graduate hires 2005: 12

Graduates are recruited into: Investment banking associate.

Training offered: Yes.

Internship Info: Summer Associate positions for graduate students are available.

Skills Required: Key associate responsibilities on transactions include the following:

• Performing financial analysis and valuations

• Conducting industry research

• Identifying and contacting potential buyers or acquisition targets

• Preparing confidential information memoranda and management presentations

• Hosting visits of potential buyers at client facili-ties

• Supporting senior bankers in negotiations, and

• Assisting during the due diligence and closing process

Key responsibilities also include preparation of materials and active participation in new business meetings, and contributing to analyst development and the general growth of the firm

Application Deadline: October 31, 2005

Company Snapshot: The Macquarie Group (“Macquarie”) comprises Macquarie Bank Limited (“MBL”) and its subsidiaries and affiliates worldwide. Headquartered in Australia, Macquarie is a diversi-fied international provider of specialist financial and investment banking services. MBL listed on the Australian Stock Exchange in 1996, has reported successive years of record growth and profits since 1992, and currently employs over 6800 people in 23 countries.

Within the Americas, Macquarie employs over 450 staff in 18 offices across a range of diversified financial services.

Financial Report: See www.macquarie.com/com/about_macquarie/investor_information.htm for details.

Graduates are recruited into: Within our graduate recruitment program, we have opportunities available for Business Analysts within a number of our busi-nesses including;

• Infrastructure & specialized funds management

• Corporate finance and advisory services

• Treasury and commodities group

• Equity sales and trading teams

Skills Required: Our unique culture, management style and business model offers a refreshing change from traditional investment banks. We offer real responsibility from day one which provides more exposure and freedom for you to determine your own progress and make your own mark within a dynamic and highly successful organization. We are looking for independent thinkers, who are confident in their abilities and are looking for a unique opportunity to grow in a truly innovative organization.

We seek high caliber candidates from a range of disciplines across accounting, finance, business, mathematics, economic and engineering studies. Candidates should possess a strong interest in the financial services sector, a knowledge of current market activity, and the desire to work as part of a successful team.

Application Deadlines: Interested students should apply online at www.macquarie.com/us. In addition, if we are interviewing on your campus, please follow the guidelines set by your Career Services Office.

Company Snapshot: Merrill Lynch is a leading global financial management and advisory company with a presence in 36 countries across six continents. It serves the needs of both individual and institutional clients with a diverse range of financial services, including: personal financial planning, securities un-derwriting, trading and brokering, investment banking and advisory services, trading of foreign exchange, commodities and derivatives, banking and lending, insurance, research

Headcount: Merrill Lynch has approximately 50,000 employees globally.

Graduates Hired per annum: Globally, we recruit approximately 450 - 500 analysts (at the undergradu-ate level), and between 100 - 125 associates (at the graduate level).

Approximate Graduate hires 2005: Same as above.

Graduates are recruited into: Merrill Lynch hires analysts and associates into every business includ-ing: Global Markets & Investment Banking, Global Private Client, Merrill Lynch Investment Managers and our Corporate Staff programs (which include Research, Technology, Accounting & Finance, HR and Operations).

Training offered: Each business offers on the job training and some form of classroom training.

Internship Info: Merrill Lynch offers summer intern-ship opportunities in all campus recruiting programs. The work is challenging and the feedback interns receive is honest and constructive. The 10-week program has business specific learning opportunities, as well as a firm-wide Senior Speaker Series. There are many opportunities to work closely with senior management and to network with other interns.

Skills Required: Required skills vary by business, but overall, Merrill Lynch is interested in candidates with exceptional quantitative abilities, teamwork skills, communication skills, along with creativity and initiative. Each business lists what they are particularly interested in on the website at www.ml.com/careers.

Application Deadline: Interested students must apply online at ml.com/careers as early as pos-sible in the Fall semester. In addition, should we be interviewing on your campus, please follow the instructions of your Career Services Office.

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Company Address: 800 Nicollet Mall, Minneapolis, MN 55402

Telephone: 800 333 6000

Graduate Website: www.piperjaffray.com/ciscareers

Company Snapshot: Dating back to 1895, Piper Jaffray & Co. has built a reputation as a premier financial services firm by providing investment solutions and services to businesses, institutions and individuals. Headquartered in Minneapolis, Minnesota, the firm has additional investment banking offices in Chicago, Palo Alto, New York, San Francisco and London. The Piper Jaffray investment banking group specializes in debt and equity offer-ings, private placements and mergers and acquisi-tions and focuses on the needs of growth companies in the consumer, financial institutions, technology, communications and health care sectors. The firm is one of the leading investment banks focused solely on middle-market clients.

Headcount: Approximately 3000 employees com-pany-wide

Graduates Hired per annum: 20-25 (Investment Banking Analysts); 10-15 (Investment Banking As-sociates)

Graduates are recruited into: Investment Banking, Capital Markets and Research.

Training offered: Initial training takes place in Min-neapolis, combining classroom training with group and individual projects led by industry experts. You’ll be learning technical, personal and professional skills and also more about the firm’s capabilities and corporate culture.

Internship Info: We offer a 10-12 week Summer Internship Program. Please see Web site www.piperjaffray.com/ciscareers for additional info.

Skills Required: We look for dedicated and moti-vated individuals who have demonstrated academic achievement as well as strong leadership, teamwork and interpersonal skills. Quantitative and analytic aptitudes are vital. Minimum G.P.A. of 3.3.

Application Deadline: Please refer to our Web site www.piperjaffray.com/ciscareers. In addition, should we be interviewing on your campus, please follow the instructions of your Career Services Office.

Company Address: 677 Washington Blvd. Stamford, CT 06901

Telephone: 203 719 0629

Graduate Website: www.ubs.com/graduates

Company Snapshot: UBS is one of the world’s leading financial firms, employing over 68,000 people in more than 50 countries. As well as being a premier investment banking and securities operation, UBS is one of the largest wealth managers globally, one of the biggest global asset managers in the world and the market leader in retail and commercial banking in Switzerland.

Financial Report: http://www.ubs.com/1/e/inves-tors/annual_reporting2004/annual_review.html

Headcount: 26,000 US employees

Graduates Hired per annum: Approximately 250 - Undergraduates/MBA

Approximate Graduate hires 2005: 250- Under-graduates/MBA

Graduates are recruited into: Investment Banking, Equities, Fixed Income and FX, Operations, IT, Finan-cial Control, Human Resources

Training offered: UBS offers a formal training program which varies per business area.

Internship Info: UBS has a formal summer intern-ship program for 10-12 weeks for both Undergrads and MBAs under various business areas.

Skills Required: Although experience with financial services is helpful, we aim to attract and retain open-minded individuals from all backgrounds and with different skill sets.

Application Deadline: October 15, 2005- please visit www.ubs.com/graduates for details

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Back OfficeRefers to all the behind-the-scenes processes at an investment bank, which don’t directly bring in revenues. Most of the work is largely IT-related or administrative.

Block TradeA trade that involves a large quantity of stock (e.g., 10,000 shares or more) or large dollar amount of bonds (e.g., $200,000 or more).

BondsUnlike equities, bonds are a kind of debt. Instead of getting a bank loan, companies sell bonds and promise to pay the money back to whoever buys them in X years’ time. Until then, they pay the bond-holder a small amount of money each year. Because the amount of money paid annually is fixed at the start, bonds are also known as ‘fixed income’ products.

Bulge Bracket Bank A nebulous term referring to the biggest and best investment banks. The U.S. banks Goldman Sachs, Morgan Stanley and Mer-rill Lynch traditionally possess bulge bracket status. More recently, the term has been extended to gigantic rivals such as Citigroup, JPMorgan, Deutsche Bank and UBS.

Buy SideA generic name for organizations that buy financial products (se-curities) in an attempt to make money out of their changing value. Fund managers are buy side firms, as are hedge funds.

Clearing and Settlements The activities that take place behind the scenes after a financial product has been traded. In the first part (clearing), banks add up all the trades done with one company, and look at any problems that arise. In the second part (settlements), the products traded are delivered in return for payment.

CommoditiesRaw materials such as precious metals or grains whose contracts are bought and sold on commodities exchanges.

Debt Capital Markets (DCM)Responsible for soliciting, structuring and executing investment grade debt and related product businesses, including new issues of both public and private debt.

Derivatives A derivative is a financial device that is based and priced on another financial product (e.g. a stock, bond or foreign currency),

or on changes in a financial index or rate (e.g. the Dow Jones index of the 30 largest U.S. companies, an interest rate, or an exchange rate). When you buy or sell a derivative you don’t buy or sell an actual product, but a contract linked to that product. For example, someone buying a simple stock ‘option’ (a kind of derivative) acquires the right to purchase a stock in the future at a pre-ordained price.

EquitiesAnother word for company stocks or shares. The name comes from the notion that stockholders share equally in the ownership of the company (according to how many equities they own).

Equity Capital Markets (ECM)Undertakes the origination, structuring, marketing and pricing of public offerings and private placements of equity and equity-re-lated securities.

Exotic ProductsComplex derivatives. Exotic derivatives are typically linked to several underlying assets or rates. For example, the price of an exotic derivative may depend on the average price of 20 different stocks, plus changes in the interest rate, and will only pay out if the value of these underlying variants reaches a certain level. Exotic products are cutting edge, as opposed to vanilla products, which are a lot simpler.

Front Office The revenue-generating areas of the bank. People in the front office interact with clients to bring in business and create profits. Front office employees include salespeople, traders and corporate financiers. Front office bankers typically earn the most money.

FuturesA kind of derivative product entitling the buyer to purchase a spe-cific amount of a financial product for a specific price at a set time in the future. When that point in time arrives, if that price turns out to be below the actual price of the product, the owner can sell the product on for a profit.

IPOInitial Public Offering, meaning the first time a company sells its shares on the open market. Privately owned companies that launch on the stock exchange ‘float’ an IPO, for example, as a way to raise capital.

Middle Office As its name suggests, the middle office is positioned between the

GlossaryBanking terminology the top banks will expect you to know

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front and back office of a bank. People who work in the middle office are not strictly revenue generators, nor are they strictly administrative staff. The middle office is concerned with risk man-agement and the calculation of profit and loss. People who work here are, therefore, typically risk managers and accountants.

OriginationAs opposed to ‘execution,’ (doing a deal), ‘origination’ is the word bankers use to describe the process of winning business in the first place. Origination bankers are senior bankers with strong client relationships.

Pitchbook The research books that junior bankers (analysts) typically compile to help senior M&A bankers win business. They involve a lot of hard work (and sleepless nights) and include everything from infor-mation on potential takeover targets to research on the particular market in which the target firm operates, as well as the sales pitch the banking team will make to the target company.

Price/Earnings Ratio The P/E ratio is a popular statistic used to analyze whether the price of a stock is reasonable. It is calculated by dividing the cur-rent price of a stock with that company’s earnings per share.

Primary MarketThe financial market where investors buy brand new securities which haven’t been traded anywhere else previously. Shares re-leased during an IPO are sold on the primary market, for example, as are newly released bonds, or subsequent issues of new shares by companies already floating on the stock exchange.

Sarbanes-OxleyThe Sarbanes-Oxley Act came into force in 2002. It followed a series of corporate scandals and aimed to protect investors from companies that falsify their accounts. Under Sarbanes-Oxley, cor-porate executives who deliberately misstate accounts face longer prison sentences. One of the most significant parts of the Act is Section 404, which says companies must file reports showing they have control over their internal processes. This has created plenty of work for accountants (who oversee the report writing), and plenty of bureaucracy for banks and other companies that have to produce a paper trail proving internal controls exist.

Secondary MarketsThe markets in which existing financial products are exchanged between investors. The New York Stock Exchange and Nasdaq are secondary markets, for example.

Securities All financial products that can be bought and sold. These include shares, bonds, and derivatives.

Securities and Exchange Commission (SEC)The federal agency that enforces securities laws and sets standards for disclosure about publicly traded securities, including mutual funds. It was created in 1934 and consists of five com-missioners appointed by the U.S. President and confirmed by the Senate to staggered five-year terms. To ensure its independence, no more than three members of the commission may be of the same political party.

Sell SideRefers to organizations that sell financial products to clients, including fund managers (buy side). Investment banks are sell side organizations, for example.

Short SellingThe practice of selling stock that you don’t own. This can be advantageous when you borrow stock, sell it expensively, and then buy it back cheaply when prices have fallen.

Structuring The process of assembling complex financial products.

UnderwritingThe process by which banks agree to buy any leftover shares in an IPO or other share issue. Banks charge an underwriting fee to cover this risk.

Universal BankA bank that deals with companies, fund managers and other professional investors, and that also deals with members of the public who have bank accounts with it (known as ‘retail’ inves-tors). Citigroup and JPMorgan Chase are examples.

Vanilla ProductsAnother word for a simple derivative. The most common are swaps (exchanging one financial product for another) and options (which gives purchasers an ‘option’ to buy a stock or bond some-time in the future at a pre-ordained price).

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“Get a Life!” is the mantra of many a student turned off by all work and no play, an existence which to many a future banker sounds a lot like life on Wall Street. But ‘getting a life’ is exactly what these grads will have to achieve when they leave the cocoon of the academic world. Whether or not that life is the one they envisage or hope for themselves remains to be seen.

Today’s professionals have been plagued with the work/life bal-ance puzzle for over a decade. The business world pays little more than lip service to the notion that when hiring people, those people are entitled to an existence outside the workplace. Long hours are de rigeur. Shining your seat at a desk for hours on end, day after day, is the reality for many a banker, lawyer or accountant.

At a recent investment banking conference organized by Goldman Sachs and attended by dozens of superstar undergrads exploring future career options, a recurring theme was their fervent horror of a workweek that can embrace over 100 hours’ of desk time. The students were united in their determination to reject a work world which precludes outside interests.

Getting Employers to Buy InIs this the future for employers? Will businesses wake up and take note of the great disdain with which their current work practices are viewed by the next generation of professionals?

Will they risk losing the best and the brightest because the work world they provide just isn’t one in which leisure time is considered an important counterbalance to office life? Will they recognize that employing someone doesn’t give them ownership of that person, body and soul?

It’s a big issue, and not just for the next generation. Many of to-day’s professionals feel trapped in a world where being physically present at the office is the only way that commitment is measured by managers, irrespective of productivity or effectiveness.

I’m firmly with the students on this. No more outsourcing your real world so that you are freed up for your working life, to the detriment of your family, friends, and mental health. I’ll put money on it that workplace stress would decline dramatically if there was a genuine buy in by business to work/life balance. Think of the cost saving to employers if that takes place.

And today’s graduates are wonderfully passionate in rejecting the prospect of an existence which chains them to their office for hours on end, day in, day out.

The responses by the working professionals speaking at the conference usually involved

wry humor: “One solution is sleep deprivation,” said one. “Don’t try and divide a hundred-hour week into five days – try seven,” said another. The students were unimpressed.

The work/life questions weren’t posed by beer-swilling undergradu-ates who sleep until lunchtime and watch daytime TV at all hours… these students are every parent’s dream: straight A’s, enthusiasm for learning and a highly tuned work ethic. But they all prize their ‘time out’ and don’t want to sacrifice it on the altar of employment.

The Tarantula’s BiteSo what does the future hold? Do I believe that the new genera-tion will prevail, and force a sea-change onto employers? Or will they take up their positions, bright-eyed and optimistic, with every good intention of keeping their lives balanced, then gradually get trapped in the corporate vortex?

I’ll give a word of caution from the natural world. The Goliath Birdeater Tarantula relishes its diet of small birds à la carte. Not to mix metaphors, business-life creep is not unlike a spiderweb, with hapless workers wriggling in the sticky toils and enmeshed in the working day. Bearing in mind that spider’s web filament is stronger, strand for strand, than steel cable, I fear these fledgling professionals will have a struggle to escape the workplace web.

Idealism and youthful optimism aside, I hope the young bankers of tomorrow succeed in maintaining their out-of-hours existence, for their benefit as well as ours.

Jane Carruthers gives voice to the banking rank and file on work-place issues and responds to your questions, thoughts and com-ments. You can reach her at [email protected].

Future Bankers and the Work/Life Balance Spiderweb Seven-day workweeks and sleepovers in the office a harsh reality for bankers


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Rewarding careers with global opportunities. It starts with you.

UBS is one of the world’s leading financial firms,

employing over 68,000 people in 50 countries. Our

wealth management, global asset management and

investment banking businesses offer clients a wide

range of products and services designed to help

them meet their individual needs and goals.

We seek highly talented individuals who can bring

something different to our organization and offer

them superb career opportunities to match their

potential.

Our people reflect a diversity of views and cultures

that is unique in the industry. UBS is committed to

an open and meritocratic environment where every

employee has the opportunity to thrive and excel,

supported by some of the best development and

training programs in the industry.

It starts with you.

www.ubs.com/graduates

UBS is an equal opportunity employer committed to

diversity in its workforce.

Global AssetManagement

WealthManagement

InvestmentBank

© UBS 2005. All rights reserved.

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