Bank on Banking

After speaking with a friend who went from semi-target school to sales and trading space instead of banking to something completely different, I realized that there were and are many students considering a career in either IB or S&T. While there are several differences, there are also several similarities and so I asked if my friend would be interested in sharing some of his experiences, his regrets, and his overall impression of life on the desk. Enough rambling; let’s get right into the interview and see what he really had to say about his past life as an S&T analyst and what matters most (besides, of course, the usuals: resume and interview skills).

Looking back on recruiting, what tips do you have for readers interested in pursuing a career in S&T?

S&T should probably be looked at as (1) S (sales) and (2) T (trading). For sales, it’s not so much hard technical knowledge that you need (just brush up a bit on whichever group/field you are interviewing with), as much as you really need sharp communication skills and be ready to sell yourself. For trading, on the other hand, mathematics and programming skills are going to be strong selling points. So majoring in one of those subjects (if not both), or taking elective courses in these subjects will probably help you. It also seems like technical schools (MIT, Carnegie Mellon, etc.) are more likely to be target schools for the trading side, at least for those who have just received their undergraduate degrees. Besides the math and programming skills, it will also definitely help to know trading strategies, formulas and general technical and industry knowledge as well.

There are obviously different roles within the T of S&T, so for some, the technical knowledge will be most important, for others, it will be all about the programming, modeling and so forth, and still, for others, it will be a mix of the two with strong math skills. Generally speaking, regardless of the position, strong math skills will definitely help.

Now for either area (sales or trading), make sure you are paying attention to the market – both the broader economy/stock market and whatever particular market you are interviewing with (for example, for a commodities role, it would be beneficial to know not just about the broader markets, but also how the commodities market has been fairing and where some of the popular commodities are trading – gold, oil and even a few others. In addition to knowing where the markets are, you’ll want to know where they were and where you think they’re heading.

What group were you placed in with your BB and was this your group of choice?

I was placed into a derivatives marketing group. In the end, this was really an investment banking product group, neither pure sales nor pure trading.

I was not asked for input on where I would like to be placed – in other words, there was no “sell day” for me to meet with and rank the different groups. Honestly, I would have preferred to be placed on a trading desk, in other words, a “pure T” desk.

What did an average day look like for you as an analyst? How many hours did you usually spend on the desk per week?

I’d usually get in at around 7a.m. The first things on my list would be to check my e-mail and run through the relevant news/read updates from our traders. After I settle in a bit, assuming there are no fire drills, I’d sit down with my director, who worked on the floor just a few desks away from me, to go over with what needed to be done for the day. Since we sat right next to each other, in the same row, we didn’t need to have an “official” meeting in an office/conference room. During the day I’d be answering phones, pricing different strategies for potential transactions, working on presentations (usually as part of a bigger pitch put on by one or another banking industry group whose client is interested in, for example, hedging strategies), and if there were no presentations that needed to be finished immediately, I might run some kind of analysis.

I would also coordinate with our legal, credit, and documentations teams. If a client has any payment or documentation issues, I would usually take care of those. As a quick side note, always be nice to your internal resources – you should try to be nice to everyone anyway, but these are the people who can make your job a lot easier or a lot more difficult.

Keep in mind that this is more of a “normal” day, if there is such a thing, when both my associate and director were on the desk as well. When my associate and director were out of town traveling, my days changed a bit and I would get the opportunity to have more in-depth conversations with clients – this was definitely an enjoyable aspect of my job.

In terms of hours, usually I worked 60-75 hours a week – usually 7-9ish on week days and a bit of weekend work, on average. There were days when I didn’t get out until midnight, and others when I cruised out by 6. During slower periods, I might work more like 55 hours per week, but it really depended on your boss, workflow and group dynamic. There were people within my division who had different directors and covered different industries who probably worked under 60 hours/week on regular basis – they probably worked closer to 50-55 hours/week. That always frustrated me a bit, but, again, in my case it was the luck of the draw and group need that pretty much decided where I went.

Which task was your favorite and which task was your least favorite? Why?

Favorite task: Probably executing trades – there was a certain rush to it – and, when I had the opportunity, speaking to clients about their options, etc.

Least favorite task: Pricing swaption collars. Clients never did these and there were days when I’d spending 30 or more minutes pricing various swaption collars since our trading software didn’t make these as simple to price as a regular interest rate collar.

What skill sets do you believe to be essential to succeeding in S&T?

Honestly, I only feel comfortable speaking to the position that I held, although this is probably applicable to pretty much any position in S&T. Of course, there are the basics, as with most finance/math/analytical-intensive positions including: attention to detail, analytically-inclined, grasping the technical concepts, being able to multi-task, etc. There are also, however, two other points that sometimes aren’t quite as obvious that I think are also worth mentioning.

A willingness to learn and an interest in learning definitely rank high up on the list. A lot of tasks in the S&T world are going to be group specific/industry specific/product specific/how your director wants it done. You will not know this stuff before you enter the group; you will learn it on the job. Be open and interested in learning. Do not ever think you are too good to learn how to do something or how something works and do not assume you already know something. I’ve had more than my fair share of mistakes pointed out to me and different, whether better or just preferred ways of tackling projects, presenting findings, etc.

The second point is that you should try to get along with your co-workers as best you can. This is probably obvious to bankers, but many people going for S&T, or at least the T, don’t think that it is necessary to really be personable and get along with all of your co-workers. Yes, it can suck, but it is a relationship business. If your bosses do not like you, you might not get the most interesting projects or gain as much insight into the business that you can gain while just talking on the desk. Also, and perhaps most importantly, they might think that the clients will share their perspective and not like you either. In this case, you won’t be speaking or working with any clients and if you are not working with clients you probably won’t be advancing in this career anytime in the near future.

For those interested in a math-intensive position, which group within S&T do you recommend they pursue?

I would definitely recommend that they stick to the trading side of the business, ideally in a position that is specifically looking for some with programming and modeling skills. Although the trading side is probably the ideal side to be on, if you are in a corporate marketing position on the sales side, you may be able to use your math skills too.

What drew you to S&T instead of, for example, IB?

One of the reasons that I switched from journalism to finance while I was in college was an interest in investing and trading. As a former athlete, I was enamored by the competitive nature and the way of measuring your results and your skills with trades. Just as I couldn’t find my satisfaction in journalism, I wouldn’t be able to find it in most other quantitative areas outside of trading either, such as banking or research.

Why did you decide to leave?

As I mentioned before, I never really wanted to work in the type of group I was in – I was far more interested in the prop/trading side of the business. I feel bad saying it since I liked the people I worked with, but it was just a bad fit. I guess that I could have asked to be moved to a trading desk, but at the end of the day, it wasn’t just the group; I wanted a better work/life balance. Now I am not even in the S&T world anymore, in fact, I am completely out of the finance world and while I am missing the paychecks at the moment, I am enjoying the opportunities I have to pursue all of my other interests. Although, with the limited funds I now have, I still maintain a small portfolio and trade.

Is there anything you miss about the business?

I miss some of my colleagues. As I mentioned before, my colleagues were never the problem. In fact, depending on your desk, it can almost begin to feel like a family. And just like in a big family, there will be some people you love, and some people that you do not particularly care for at any given time – and that’s not necessarily a bad thing. When you spend over half of your day, five or more days a week with one group of people, you develop a bit of an affinity for them. Having Bloomberg at my fingertips was nice as well. Oh… and, as I mentioned before, the money was nice too. I miss having money sometimes…ok…many times.

If you could do it all over again, what would you have changed – whether it be in terms of group selection, work, preparation, etc?

I wish I would’ve taken more math and computer programming classes when I was an undergrad. I also wish that I would’ve pushed harder for a trading position – been more upfront about my interests instead of doing the usual interviewee thing and saying “I’ll be happy wherever.” Sometimes, and this is more of a personal thing, not as much of a missed opportunity thing, I wish I enjoyed networking more – I kind of hate networking. I feel like networking is using people, even though it’s not, and even if it is, everyone does it. I still do network sometimes, but I hate it. Also, I do not think I am particularly good at it. Thankfully S&T isn’t as big of a networking game as banking seems to be – it still matters though and it would’ve been nice to be better at it or at least enjoy it more so that I might have a shot at becoming better at it.

Any other advice for those interested in S&T and for those just starting their S&T programs?

Work hard in undergrad and try to build the technical skill sets you’ll need – not necessarily through coursework, but do some research on your own. Have confidence in yourself, but not arrogance, during interviews. Be open to learning regardless of your position – being open-minded and eager will give you far more options. Continue learning off the job and make friends with both your group and colleagues in other groups, especially if you want to potentially change groups and/or employers. Lastly, for those that haven’t yet broken into S&T, reach out to alumni, network with professionals and get your name out there. Having support will always help you get the interviews.