Comments for IBankingFAQ http://www.ibankingfaq.com Learn about investment banking...become an investment banker Mon, 15 Mar 2010 17:56:55 -0600 http://wordpress.org/?v=2.8.4 hourly 1 Comment on Comments / Suggestions / Questions… by Andrew http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-4/#comment-17573 Andrew Mon, 15 Mar 2010 17:56:55 +0000 http://www.ibankingfaq.com/?p=80#comment-17573 Maurice, There are only about 10-12 business schools in the US (and a handful more in Europe) that are considered target schools for bulge bracket investment banking MBA recruiting. These are pretty much the top 10-12 schools in most rankings. If you are at one of these schools, you have a good shot at getting a lot of interviews (though there is no guarantee - you still have to do networking and a lot of informational interviews). Beyond these schools, it is not impossible but much more difficult to get interviews at bulge bracket banks for IB. You have to do much more work since the banks won't recruit in campus. Essentially all MBAs start as first year associates. You can search around the internet for first year associate compensation for the last couple of years but yes, bulge bracket comp for 1st year associates is above $110k (expect about twice that - or a little more). Keep in mind that compensation includes your base salary and bonus, of which the bonus is completely discretionary and depends highly on market conditions, and may be paid out partly in stock. With regards to how many years until you get into a management position, it depends on what you mean by "management position." Some managing directors become heads or co-head of their groups (this will generally take maybe 10-12 years or more) but very few investment bankers have true management positions. If you are interested in management don't go into investment banking. Maurice,
There are only about 10-12 business schools in the US (and a handful more in Europe) that are considered target schools for bulge bracket investment banking MBA recruiting. These are pretty much the top 10-12 schools in most rankings. If you are at one of these schools, you have a good shot at getting a lot of interviews (though there is no guarantee – you still have to do networking and a lot of informational interviews). Beyond these schools, it is not impossible but much more difficult to get interviews at bulge bracket banks for IB. You have to do much more work since the banks won’t recruit in campus.

Essentially all MBAs start as first year associates. You can search around the internet for first year associate compensation for the last couple of years but yes, bulge bracket comp for 1st year associates is above $110k (expect about twice that – or a little more). Keep in mind that compensation includes your base salary and bonus, of which the bonus is completely discretionary and depends highly on market conditions, and may be paid out partly in stock.

With regards to how many years until you get into a management position, it depends on what you mean by “management position.” Some managing directors become heads or co-head of their groups (this will generally take maybe 10-12 years or more) but very few investment bankers have true management positions. If you are interested in management don’t go into investment banking.

]]> Comment on Comments / Suggestions / Questions… by Andrew http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-4/#comment-17572 Andrew Mon, 15 Mar 2010 17:43:51 +0000 http://www.ibankingfaq.com/?p=80#comment-17572 Kevin, The good news is that yes, it is possible to still get a full-time banking offer, even though full time recruiting is over. The bad news is that it is very difficult (especially bulge bracket). You need to keep reaching out to bankers through your network, even if they are not very responsive. Sometimes slots do open up because someone will renege on an offer. This can happen even days before training starts in the summer. If a bank does need to fill a slot, you need to be on the top of their radar screen so keep networking. It may also help you that people seem to think that the economy is improving and therefore the job market is also improving (banking recruiting was certainly better this year than last year - though not at the levels of the bubble years). A bank may decide that they do have a need for additional analysts, beyond the number for which they gave offers in the fall. However, this is less likely for bulge bracket banks and more likely for boutiques. So beyond just networking, my advice to you is to seek out boutiques and not just limit yourself to bulge brackets. Boutiques tend to be more flexible with their hiring needs. If you get good deal experience at a boutique, there's always the chance to trade up to a BB after as a second or third year analyst. Kevin,
The good news is that yes, it is possible to still get a full-time banking offer, even though full time recruiting is over. The bad news is that it is very difficult (especially bulge bracket). You need to keep reaching out to bankers through your network, even if they are not very responsive. Sometimes slots do open up because someone will renege on an offer. This can happen even days before training starts in the summer. If a bank does need to fill a slot, you need to be on the top of their radar screen so keep networking. It may also help you that people seem to think that the economy is improving and therefore the job market is also improving (banking recruiting was certainly better this year than last year – though not at the levels of the bubble years). A bank may decide that they do have a need for additional analysts, beyond the number for which they gave offers in the fall. However, this is less likely for bulge bracket banks and more likely for boutiques. So beyond just networking, my advice to you is to seek out boutiques and not just limit yourself to bulge brackets. Boutiques tend to be more flexible with their hiring needs. If you get good deal experience at a boutique, there’s always the chance to trade up to a BB after as a second or third year analyst.

]]> Comment on Comments / Suggestions / Questions… by Maurice http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-4/#comment-17569 Maurice Mon, 15 Mar 2010 04:45:37 +0000 http://www.ibankingfaq.com/?p=80#comment-17569 Andrew, Amazing site you have here. I had a MBA related question to ask you. I am a Chartered Accountant with about 2.5 years experience at a Big firm. I plan to get my MBA in the next year or two and specializing in finanace as i am keen to get into investment banking. A few queries for you: a) Will having a MBA (from a top 50 school worldwide) mean i am close to guaranteed at least interviews in BB companies in the area of investment banking? Or put it simply, can i at least assured i have a better shot at landing an IB job as opposed to right now? b) Do all MBAs start as associate 1? Also what is the earning potential of an associate 1 and how many years of Associate work would be needed before getting up to management level for a potential MBA and CA like myself? Thanks for your help. I am just trying to see if an MBA is worth it, since you know it is a pretty big financial undertaking. For me "worth it" would mean at least 110K salary starting out first year after i graduate from MBA. Is this feasible or should i wake up and smell the coffee? Thanks Maurice Andrew,

Amazing site you have here. I had a MBA related question to ask you. I am a Chartered Accountant with about 2.5 years experience at a Big firm. I plan to get my MBA in the next year or two and specializing in finanace as i am keen to get into investment banking. A few queries for you:

a) Will having a MBA (from a top 50 school worldwide) mean i am close to guaranteed at least interviews in BB companies in the area of investment banking? Or put it simply, can i at least assured i have a better shot at landing an IB job as opposed to right now?

b) Do all MBAs start as associate 1? Also what is the earning potential of an associate 1 and how many years of Associate work would be needed before getting up to management level for a potential MBA and CA like myself?

Thanks for your help. I am just trying to see if an MBA is worth it, since you know it is a pretty big financial undertaking. For me “worth it” would mean at least 110K salary starting out first year after i graduate from MBA. Is this feasible or should i wake up and smell the coffee?

Thanks

Maurice

]]> Comment on Comments / Suggestions / Questions… by Kevin http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-4/#comment-17558 Kevin Sat, 13 Mar 2010 11:22:18 +0000 http://www.ibankingfaq.com/?p=80#comment-17558 Thank you for this fantastic site. I want to work at a BB bank and I know they finish hiring as early as October and I missed it due to some letimate reasons. I am a senior at a top-10 school and they all came to our campus, also I have access to many alums working at Wall Street. Of course I am trying to leverage these assets, but most people say that it is over. My question to you is that do I have a chance at all, and what should I do besides reaching out to alums which are not very responsive at this time of the year? Thank you for this fantastic site. I want to work at a BB bank and I know they finish hiring as early as October and I missed it due to some letimate reasons. I am a senior at a top-10 school and they all came to our campus, also I have access to many alums working at Wall Street. Of course I am trying to leverage these assets, but most people say that it is over. My question to you is that do I have a chance at all, and what should I do besides reaching out to alums which are not very responsive at this time of the year?

]]> Comment on Comments / Suggestions / Questions… by Andrew http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-4/#comment-17552 Andrew Thu, 11 Mar 2010 17:27:34 +0000 http://www.ibankingfaq.com/?p=80#comment-17552 Mike, I have seen plenty of CPAs become investment bankers. Typically, however, this happens after they get an MBA at a top business school. Folks with accounting backgrounds tend to do well as Investment Banking Associates. It may be possible for you to make the switch into investment banking without the MBA but you would likely start as a first year Analyst. If you want to give that a shot then try to network your way to get interviews. If you are serious about banking, I would start thinking about getting an MBA. Mike, I have seen plenty of CPAs become investment bankers. Typically, however, this happens after they get an MBA at a top business school. Folks with accounting backgrounds tend to do well as Investment Banking Associates. It may be possible for you to make the switch into investment banking without the MBA but you would likely start as a first year Analyst. If you want to give that a shot then try to network your way to get interviews. If you are serious about banking, I would start thinking about getting an MBA.

]]> Comment on Comments / Suggestions / Questions… by Mike http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-4/#comment-17510 Mike Sat, 06 Mar 2010 05:07:31 +0000 http://www.ibankingfaq.com/?p=80#comment-17510 Andrew, I want to say that you have a wonderful site here. I have a query for you. I am a recently qualified chartered accountant in Canada (24 yrs old), and work for a BIG firm. I have spent the last 4 years in financial services, and have a pretty good grip on the industry. I do not have a CFA or MBA or any finance related designation. My question to you is, in your experience have you ever seen a certified accountant (CPA or CA) become an ibanker? If so what type of obstacles do i face if i wanted to pursue this career path. Being a CA would i have a leg up on say someone who just has a finance degree, or would i be judged pretty much at the lowest level? thanks for your help Andrew,

I want to say that you have a wonderful site here. I have a query for you. I am a recently qualified chartered accountant in Canada (24 yrs old), and work for a BIG firm. I have spent the last 4 years in financial services, and have a pretty good grip on the industry. I do not have a CFA or MBA or any finance related designation.

My question to you is, in your experience have you ever seen a certified accountant (CPA or CA) become an ibanker? If so what type of obstacles do i face if i wanted to pursue this career path. Being a CA would i have a leg up on say someone who just has a finance degree, or would i be judged pretty much at the lowest level?

thanks for your help

]]> Comment on Comments / Suggestions / Questions… by Andrew http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-4/#comment-17465 Andrew Thu, 25 Feb 2010 21:44:55 +0000 http://www.ibankingfaq.com/?p=80#comment-17465 Steven, I'm not 100% sure that I understand your question. As you correctly say, when a company goes public (IPO) investors buy these shares. These investors are then free to sell to other investors, who can then sell to yet other investors, etc. This is what's known as the "stock market." Whoever buys the shares, owns the shares. Does that help you? Steven, I’m not 100% sure that I understand your question. As you correctly say, when a company goes public (IPO) investors buy these shares. These investors are then free to sell to other investors, who can then sell to yet other investors, etc. This is what’s known as the “stock market.” Whoever buys the shares, owns the shares. Does that help you?

]]> Comment on Comments / Suggestions / Questions… by Steven http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-4/#comment-17461 Steven Thu, 25 Feb 2010 10:43:23 +0000 http://www.ibankingfaq.com/?p=80#comment-17461 Hello, Andrew! I have perhaps stupid question but nevertheless.. When a company goes public, it issues shares and investors buy these shares.. I wonder to whom belong shares that circulate in the stock market? to the company or investors or somebody else? Hello, Andrew!
I have perhaps stupid question but nevertheless.. When a company goes public, it issues shares and investors buy these shares.. I wonder to whom belong shares that circulate in the stock market? to the company or investors or somebody else?

]]> Comment on Comments / Suggestions / Questions… by Kyle http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-3/#comment-17453 Kyle Tue, 23 Feb 2010 23:46:42 +0000 http://www.ibankingfaq.com/?p=80#comment-17453 Andrew, I appreciate your feed back. God Bless. Andrew,

I appreciate your feed back. God Bless.

]]> Comment on Comments / Suggestions / Questions… by Andrew http://www.ibankingfaq.com/comments-suggestions-questions/80/comment-page-3/#comment-17452 Andrew Tue, 23 Feb 2010 21:12:16 +0000 http://www.ibankingfaq.com/?p=80#comment-17452 Teddy, other than the handful of examples of these types of questions that I've got posted on this site, I don't know of any other places that have sample interview questions. Perhaps some of the interview guides that you can purchase have some more examples. The best way I know how to learn how the financial statements fit together is to either take some accounting classes (pretty tedious) or practice financial modeling. In order to balance a financial model, you need to understand how the 3 statements flow together so that's a good way to learn. Otherwise, just go through a financial statement line by line and ask yourself how that particular line item affects that other 2 statements. In other words, how does revenue affect the BS and CF? How does Depreciation or Capex affect the IS and BS? etc. I do have plans to release a self study accounting module which should help teach these concepts (similar to the financial modeling module that I've recently introduced) but this probably won't be available soon enough for you. Hope that helps a bit. Teddy, other than the handful of examples of these types of questions that I’ve got posted on this site, I don’t know of any other places that have sample interview questions. Perhaps some of the interview guides that you can purchase have some more examples. The best way I know how to learn how the financial statements fit together is to either take some accounting classes (pretty tedious) or practice financial modeling. In order to balance a financial model, you need to understand how the 3 statements flow together so that’s a good way to learn. Otherwise, just go through a financial statement line by line and ask yourself how that particular line item affects that other 2 statements. In other words, how does revenue affect the BS and CF? How does Depreciation or Capex affect the IS and BS? etc. I do have plans to release a self study accounting module which should help teach these concepts (similar to the financial modeling module that I’ve recently introduced) but this probably won’t be available soon enough for you. Hope that helps a bit.

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