Bank on Banking

I have recently started to see an inflow of questions regarding changing careers from X to banking, and how to go about making that change. As a result, I have decided to put together this brief guide for the career changer that should shed some light on this process, and help to steer them in the right direction on their path to becoming an investment banker. While there is no guaranteed method of breaking into banking from another related or unrelated field, these tips will provide you with the insight necessary to move forward in your pursuit and, ultimately, ideally, land an investment banking position.

Use your alumni network

The alumni network is absolutely a big part of making the move to banking from a field outside of investment banking. By reaching out to those alumni that are already working in banking you can gain valuable insight into their banks’ process of hiring professional from outside of banking, information on any potential opportunities and how to best shape your past experiences to appear more attractive to the team, and, of course, have support from within the firm, which, as any banker will tell you, makes the process much, much easier to navigate and successfully close.

I always recommend reaching out to alumni via email, and then work on the getting the networking phone call to further build the relationship and tackle numerous questions in one session. Rather than go through the whole process again, for more tips on reaching out to alumni and navigating the networking phone session, click here

Target boutiques and smaller MM shops

By this point, I don’t mean target ONLY boutiques and smaller MM shops, but rather, not to ignore boutiques and smaller MM shops, thereby focusing solely on elite boutiques and bulge bracket banks. In other words, take off the horse blinders and expand your search – focus on landing in banking with a firm that could offer you interesting projects and experiences, and the opportunity to grow within the firm, interact with clients and expand your skill set – boutiques are often known for many of these attributes as their lean staff frequently requires them to rely on their junior team members – whether that be of the associate and/or analyst levels.

While working for a BB or elite boutique sounds incredibly enticing, smaller shops should be by no means overlooked, especially by career switchers, as boutiques that service their sector of former employment might absolutely be interested in picking up a former professional in the field. For example, if you previously worked for a renewable energy company in an engineering/design capacity, a boutique with a renewable energy focus might very well be interested in your expertise. Never underestimate the power of your background, and never undervalue the experiences and skill set you can acquire by working at a boutique IB/advisory shop.

Finally, if you are able to break into banking through a small boutique, you could very well leverage that into a position with a BB down the road – especially if you utilize some of the other tips here such as networking and then continuing to network with alumni.

Brush up on your accounting (or learn accounting)

While many will argue that BBs, and even smaller shops will have training programs and not require you to necessarily know accounting/finance, don’t take any of that for granted. You are competing with laid off bankers as well as U Grad/Grad students – those who the programs were developed for – and as a result, you need to do whatever you can to show that you are not only prepared for the field, but have demonstrated an interest in both the field and the underlying material. Brushing up, or even learning, some basic accounting and finance will allow for the interviewers to both see your interest in the field, as well as pose more challenging interview questions – technical questions that is – that will surely help support your candidacy provided you have the right answers. If a banker interviews you and asks you about the 3 financial statements and you are ready to go with a strong response, you will definitely make a much better impression considering the interviewer might not have expected you to really know them at all, let alone provide a detailed and eloquent explanation/response.

Now by brush up on your accounting and finance, I don’t mean break into the rules governing deferred compensation, or complex tax or inventory practices, but you should absolutely know the basics. You should know the discounted cash flow model, methods for valuing a company, the 3 financial statements and how they tie together, the capital asset pricing model and so forth – nothing terribly complex as long as you take a bit of time and do the review.

Regarding how to go about cracking this information, I recommend that you first pick up an interview guide, whether mine (Here) or another similar product, to become familiar with both the interview process and questions, as well as all of the basic finance and accounting concepts. From there, some google searches, investopedia, etc can get you over any hurdles and through any questions that might arise as you make your way through the material.

Consider B school (not Masters programs, the CFA, etc)

While I know that many of you have asked about the CFA, a general Master’s (the 1-year or so past U Grad), and so forth, my honest opinion is this: the only finishing degree that you really want to get to make it in banking is an MBA. Now let me double back and state that the CFA is absolutely useful as are other graduate degrees, certificates, etc, and if you have them already that is absolutely a plus for you. That said, if you are considering pursuing a degree with the main goal of breaking into banking, attending B school is by far your best bet. Beyond the academics, the network and career service opportunities set B school well above the rest. B school, especially during the boom years, was known as the career switchers key to break into banking. Whether your U Grad was a target or not, whether you were in advisory, engineering, or what have you, if you attend a top B school (read: top 15ish), the B school now becomes the dominant force on your resume and coupled with a supportive and well-represented alumni network, will now be your key to breaking into the industry. B school is by no means a guarantee into banking, but it definitely provides a firm path and solid foundation to break in from most industries/former professions. The difference or advantage can be summed up easily as follows: while you will still probably have to network and work hard, the opportunities will absolutely be clear and available to you.

Now that I’ve pitched B school if you were considering the advanced degree as an option, it’s important to figure out whether you should be considering an advanced degree as an option in the first place and if that choice would be wise for you. As a career changer, you will have a big advantage when it comes to banking: industry experience (given your particular industry) – this is definitely an advantage and not one that should be overlooked. You will also, however, have a few big disadvantages (of course some or all of these might not apply given your particular background): a lack of direct banking/banking-related experience, a lack of accounting/finance-specific knowledge, and, perhaps most importantly, a lack of industry contacts – otherwise known as your network that you would otherwise use to switch banks/groups/etc. While your skill set and experiences will only be achieved through time on the job, the other two disadvantages can absolutely be overcome, to a large degree, by attending a strong business school and networking while there. Hands down the number one reason for attending business school is the networking opportunities (of course the career services/placement aspect is definitely noteworthy as well). If you are a career switcher who comes from a non-target, is several years disconnected from your U Grad, or has become too involved in your professional industry to break free from that space and break into banking, I would definitely consider B school as a viable option.

Shape your Resume

Most resumes that I see/review/revise/edit/etc share one thing: they fail to properly express their experiences with a banker’s eyes in minds. Now you obviously can’t lie and say you’ve already worked in banking, nor that your experiences are directly related /applicable to banking or the same as those you’d pick up in banking, unless of course, they are or are at least of a very closely related field (small P/E, Corp fin or Acct. advisory to a degree, etc). That said, you absolutely can shape the experiences that you have acquired over your professional life to resemble or reflect the skills and skill set necessary to succeed in investment banking whether as an analyst or an associate. Furthermore, you can articulate your experiences in your specific industry to explain exactly how you can contribute to banking, especially boutique banking, within that field.

All of the fancy language aside, essentially what I am saying is think IB, write IB, explain in IB and by IB, I mean focus on the analytical qualities and aspects of your past experiences, especially those that require a strict attention to detail. Next, point/write to the results that you have achieved or how you have grown in your past positions – what sort of an impact have you made there and how can that be viewed by bankers as a plus. Related to the results point, focus on the leadership qualities that you have both groomed and displayed over your past experiences – leadership, although you may never exhibit it as an analyst, is absolutely essential and held in high esteem by bankers as bankers see leadership as drive, passion, hard work, the ability to work in teams and the ability to tackle challenging situations/problems, all of which are seen as banker-positive attributes. Finally, don’t lose sight of the fact that banking, above all else is business and business wants to see those business aspects on your resume – the easy ones – communication, organizational skills, time management, and things of this nature. While these final aspects are by not the most glamorous, depending on your industry of past employment (for example, accounting, business, engineering, etc backgrounds won’t really have to focus on this point as much as the others) you might have to slip some of these aspects into your resume – coupled with the other prominent and more impressive aspects or previously mentioned points, of course.

Connect the Dots

Along the same lines as the previous point of shaping your resume, be prepared to show how the skill set (or skill sets) necessary to thrive in your former career is the same skill set or contains integral parts of the skill set necessary to succeed as a banker. While this will predominantly be done through your resume using the previous points, you also want to point to these specific attributes (and the best experiences to illustrate your points) in your cover letter when applying. While I realize I am being a bit repetitive here considering most of this can be inferred from my previous point, I feel that this is absolutely a necessary aspect to cover, and, as such, I felt the need to repeat myself and highlight this single point in a separate entry.

Know the Business

By this point, I mean that you need to know the answer to the ever-crucial questions asked of career switchers or those with numerous differing finance careers in their past lives – “why investment banking,” “what are your goals with this program and after,” and “why this bank” to get started. The goals question is a pretty easy one once you learn the positions, and what you are applying for (analysts don’t need a terribly specific answer, just a well-thought-out and eloquent response that shows an interest in banking, but doesn’t necessarily commit – associates, however, should know, or at least state that they want to stay in banking).

For the why bank X question, you will be best served to do a bit of research on the firm, and, if possible, talk to a few alum bankers or banker contacts with the firm so that you can put a quick story behind your response – this both shows your interest in the firm as well as forms the basis for a more believable and genuine response (as opposed to those responses that can be easily used for every bank (although usually they can all be swapped pretty easily).

Finally, for the why banking question, you will need to know what banking is, what bankers do (senior and junior), and what about banking interests you the most. When answering this question, you should also use this as an opportunity to illustrate how the skill set, or part of the skill set from your previous job(s) was both enjoyable and applicable to banking – this both describes why you will be a good banker and answers the question.

Know the Role

With this section I don’t mean that you should know what the role entails, although you absolutely should, as stated above, but rather, this section is a sort of extension of the previous section in that you should know the position to which you will be applying. If you do not have an MBA, you will be applying for analyst-style positions (the only exceptions could be if you are coming from a strong law, a strong tax, or a strong general accounting – CPA – background – since those skill sets are clearly advantageous to banking, there are some banks that would consider offering the associate position to you based on your experience within said fields). Too many people believe that since they’ve worked in their current position for 4 or 5 years that means they should come in as an associate – wrong. Ignoring the few exceptions, the only ways to become an associate are: 1) earn an MBA, or 2) earn a direct promotion to associate from an IB analyst position.

One of the easiest ways for a career switcher to ensure that he/she will NOT break into banking is by applying to the wrong position. Don’t let that happen to you – don’t let pride or confusion keep you from landing a job – do your research, evaluate past experiences and then apply to the proper positions. Considering there is always at least one exception to the rule, the big exception here is for applying to boutiques. Since boutiques, specifically smaller boutiques don’t have highly structure training programs, promotions processes, etc, they could absolutely hire an applicant who doesn’t have past banking experience for an associate position if that candidate has a strong background in the specific industry, or a highly desirable skill set – even though the applicant will need to catch up on the banking specifics. Now I’m not telling you to only go for associate positions with boutiques, but if that is what they have, there is no harm at all to submitting the app and following up accordingly.

That’s about it. I know that this is a pretty long article, but I feel that the information is definitely valid and valuable to any of the readers out there that are or are planning to soon be eager career switchers. If any of you have any further questions, suggestions, or just want to chat, drop me an email HERE or leave your comments below!

Stay tuned for upcoming posts on interviewing, to delay or not to delay graduation, and so much more!