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Careers Centre

Investment banking and investment management

Sector Overview

Quick Facts

There is excellent information on this sector and current trends and developments on Inside Careers and TARGETjobs. These guides are also available free from the Careers Centre.


Hedging against risk still continue to play a big part in this sector. Investors of every kind - wealthy individuals, speculators, and insurance and pension funds – are looking at how to hedge against risk. That means buying derivative products, which insure investors against volatility on foreign exchanges or future rises in the price of iron ore, nickel, tin and wheat. This insurance is vital, and means that the investment banks are the sought-after intermediaries.

Although front-office jobs in sales and trading may be hard to find, there is an increase in operations such as risk management, financial management and IT services, which allows banks to claim that their recruitment is steady. Many opportunities are still available in other parts of the sector, including financial services, hedge funds, the insurance industry and the actuarial profession. Fighting financial crime is a growing area - the likes of information security and anti-money laundering have been providing job opportunities which is being fuelled by the UK Bribery Act. This act came into force in July 2011 and it has created a demand for financial crime, bribery and corruption specialists, as well as regulatory monitoring officers and "front office advisory specialists".

Investment Management is a term used to describe asset management (including hedge funds), fund management, wealth management or portfolio management. Basically, it is the professional management of collective investments (including insurance and pension funds) to meet specified investment goals for investor benefit. While many investment banks may have asset management or other related divisions, investment management is a large and important global industry in its own right, responsible for trillions of dollars, euros, pounds and yen. Coming under the remit of ‘financial services’, many of the worlds largest companies are at least in part investment managers and employ millions of staff and create billions in revenue.

Working within investment management can involve everything from analysing and investing in products, to persuading new clients to put money into the fund, as well as focussing purely on the business of selecting, monitoring and managing assets – whether for an institutional or individual client.

Investment Banking & Investment Management attributes/skills profile

Key attributes/skills needed for the roleWhere you could develop these skills or attributes while at university
Analytical and problem solving skills with the ability to produce accurate facts, figures and reports. Ability to handle figures easily i.e. basic arithmetic  - fractions, percentages

Through academic studies and relevant work experience.

CAPOD offer maths support for particular problems or even if just you wish to build your confidence in your maths Skills.

Practical problem solving skills are particularly valued for example taking on the role of treasurer for a society.

Demonstrable interest in investment banking and the world of finance in general, including global economies eg emerging markets, share prices, challenges facing banks. Have commercial awareness Keep up-to-date with business and sector news, especially through publications such as the Financial Times and the Economist. Gateway, a student publication focussing on the finance sector is an excellent source of information. Develop this through extra-curricular activity in student-run societies such as GIG and the Investment Society, who often have prestigious leaders from the industry as speakers.
Technical Knowledge - Have at least a basic understanding of the mechanics behind investing and the terminology used. Through academic studies if studying a finance related subject or appropriate reading e.g. Vault guide to Investment Management, Investing for Dummies.
Excellent inter-personal and client relationship skills Mainly through working in a customer service environment but could include roles such as sponsorship officer for a society.
Ability to achieve targets and motivate others to achieve targets Achieving academic deadlines and through work experience. Working as a campus brand ambassador can be a good role to evidence this skill. Any selling experience – entrepreneurial projects are looked on favourably.
Strong communication & interpersonal skills

Many of these skills you will develop through your academic studies and extra- curricular activities.

Leadership roles in sport and other societies are looked on favourably.

CAPOD offers courses on these kinds of skills regularly within its Professional Skills Curriculum
Ability to organise time and work methodically whilst paying attention to detail
Leadership qualities and effective team working skills
IT Skills Using  the  University’s subscription to the Microsoft IT Academy can help to develop your skills with programmes such as Excel, the latter is particularly valued in the finance industry.
Deliver results – the ability to complete projects on time even to tight deadlines with competing priorities Through academic work especially in combination with responsibilities in outside activities. The resolve to complete projects even if it requires long hours and weekend work.

Nature of sector or roles

Stripped of the jargon, the basic function of the financial markets could not be simpler – the industry exists primarily to channel money from savers to borrowers, from those who have surplus capital to those who need capital to finance trade or expand businesses. They provide a market for people to exchange securities, so that the original investors in a company or a bond can sell on the shares or bonds they own to other investors, and are not locked in; they also advise companies on new projects and mergers and acquisitions.

The financial markets are open 24 hours a day. London is one of the three world financial centres, along with Tokyo and New York, allowing ‘round-the-clock’ trading in foreign exchanges, securities, financial futures and commodities. London is important, because its working day bridges those of the US and Asian markets.


St Andrews graduates tend to apply for positions within the front office but bear in mind these are the most competitive with often hundreds of applications per place. The middle office and back office are less competitive and can offer attractive salaries and promotional prospects without the long hours and highly pressurised environment.

Keep it in mind that these are general functional areas but that actual names of divisions may vary by firm. Within this range of functions there are also many job titles, which may have different meanings in different firms. It is difficult to find out precisely what any specific job entails in advance of doing it. However, to help you make your initial assessment you may like to consider how much persuasion, how much risk taking and how much analysis you would like to deal with in your work. For example, selling US equities to UK institutions requires great confidence and persuasive ability, with customers, face to face and on the telephone.

Money market trading and Eurobond dealing require the ability to make rapid decisions and to be willing to take risks. Fund managers and investment advisers require high levels of aptitude and application in research and analysis. And remember, you are not just selecting a job, you are positioning yourself in the financial services market, some areas of which are likely to be in a healthier state than others.

Networks - why and how to use them

Donald is an Analyst at Barclays Investment Bank. He is happy to be contacted on LinkedIn.

Networking is particularly important and can help you succeed with your applications. If you have been in contact with someone working for the organisation then you have extra information to back up your case for why they should employ you. Visiting the Careers Centre Graduate Management and Finance Fair and turning up to employer run events is a great way to make valuable connections, it helps to introduce yourself to representatives from the banks and ask for their card so you can make contact in the future. Use social media sites such as LinkedIn and Facebook (many organisations have their own page). Recent St Andrews graduates have gone on to work for Aberdeen Asset Management, Bank of America, BNY Mellon, Bank of America Merril Lynch, BlackRock, Capitol One, First Derivatives, Goldman Sachs, HSBC, JP Morgan, Ruffer, RBS, Scottish Widows Investment and UBS. You will find St Andrews alumni at most of the main financial institutions all over the world ranging from graduate trainees to CEOs. These alumni can make extremely useful contacts, giving you an "edge" with your applications and interviews. There are several ways to make contact with alumni.

How to gain experience/internships

In recent years, many Investment Banking/Management organisations have considered internships as an “extended application process” and use it as their main recruitment method. In some companies, over 80% of their graduate trainees will come from interns. So securing an internship can be your best way of successfully securing a graduate place and it has the added benefit of you completing your final year with the knowledge you have a definite opportunity to move into after graduation. Most of the large banks offer formal internships programs to penultimate students in the summer - look on individual websites for more details. Note that summer placements (some of which have to be applied for early in semester one) can be as hard to secure as permanent jobs, and sometimes even more competitive, as the number of places for internships may be limited.

Smaller banks, often referred to as “boutique banks” do not, in general, offer structured advertised internships but they, on occasion, offer a placement to a talented and enthusiastic student who applies directly.

Opportunities for 2nd years (occasionally 1st years)

NB These opportunities are targeted at students who have 2 further years of study - so although they advertise for 1st years, this means 2nd year at St Andrews.


A number of banks organise week-long programmes, “Springweeks”, for first year students to provide an insight into roles within banking. These are generally organised over Easter with students required to apply online – deadlines may vary, with some as early as October/November - check websites of firms you are interested in as early as possible. Spaces are limited and competition is fierce so you should demonstrate how the programme could benefit you, often via a covering letter and/or initial interview. These programmes can often lead to an offer on the longer summer internships. Many organisations host fast track assessment centres after these events for summer internships the following year.

In addition some banks organise ‘Insight Days’ targeted at 1st and 2nd year students throughout the year. These are also designed to provide a taster of the banking industry.

Opportunities for penultimate years (or final year undergraduates proceeding onto a masters)

Internships

Many investment banks run summer internship programmes. These are offered mostly to students in their penultimate year and can last for eight to ten weeks. They normally take place between July and September. You apply for a student or graduate internship with an investment bank or investment management house the same way you would apply for a graduate job - by an online application system or sometimes by CV and covering letter. You may then be invited to an interview and/or assessment centre.

Hedge Funds summer internships

There are few formal hedge fund internship programmes available, so it may be worthwhile applying speculatively. The London School of Economics has some good information on hedge funds and links to relevant employers.

Advice from a recent alumni

"Start Early: Start as early as possible – internships are incredibly important (perhaps more so in the US versus the UK). Over 90% of my start class at Barclays had been hired directly out of the pool of summer analysts. I was a bit late to the game on applying to formal internships in my third year, and wasn’t aware about how early the process starts (early fall for US recruiting at the big banks). I certainly think things could have been easier for me had I fully grasped that I should be prepared to start applying to Summer Analyst positions at the start of my third year. Otherwise, you wind up like I did in fourth year, competing against a significantly larger applicant pool for significantly fewer job opportunities when compared to internship recruiting the year prior. It’s certainly still doable, but the path of least resistance is to start early and hopefully get in the process as a summer analyst."

Additional internship resources

How to get a (graduate) job

The majority of investment banks/investment houses will recruit graduates from any degree discipline, although an interest in finance and numeracy skills may often be advantageous.

The most successful applicants from St Andrews are not necessarily those with a finance related degree but those that know what the sector does and the roles involved.

Before you even start to look for a job, make sure your are able to articulate in your application your motivation to work in your chosen role and your understanding of the sector and the main current issues affecting this area. Showing an interest in the current financial markets is also beneficial; read the Financial Times or/and The Economist, have a knowledge of the current state of the Stock Market etc.

If applying to Investment Management you must know the difference between Investment Management and Investment Banking - Fidelity Worldwide Investments say this is the number one mistake students make in their application and at interview.

How to search for graduate jobs

Hedge Funds that hire graduates

A number of hedge funds employ graduates, but competition is fierce. Examples include:

Lists of hedge fund employers can be found on the London School of Economics website and the Hedge Fund Association Member Directory.

Specialist graduate recruitment consultancies

These have divisions which cater specifically for graduate roles:

Making speculative applications

It may be worthwhile approaching smaller financial institutions which do not have an established graduate recruitment scheme or do not actively publicise their vacancies, eg boutique banks and hedge funds. Ask Ivy provides a list of London Boutique investment banks.

The Careers Centre has some good advice on making speculative applications.

Recruitment Agencies

Consider contacting one or two City recruitment agencies with a copy of your CV. They will not normally put your name forward for vacancies unless you have a sufficient degree of office experience; for example, three to six months in a ‘blue chip’ firm and familiarity with Excel, Access and Word would help. Examples include:

Remember that recruitment agencies respond to immediate vacancies, so you need to apply at the time when you are likely to be available for interviews and start work.

Vacancies and news sites

Vacancies can also be found in the national press, though usually for people with some financial experience.

Applications, interviews and assessment centres

Application deadlines

This sector is known for its early start and closing dates for graduate applications - many graduate schemes at investment banks open in August or September, and some close in late October/early November. It is advisable to apply as early as possible, don't leave it until the closing date, as some recruiters make offers as the applications arrive. Bank of America Merrill Lynch is among the banks that recruit graduates on a first-come first-served basis. Selection dates are likely to be between January and April (sometimes earlier). Regularly check employer websites for up-to-date details.

Late opportunities

Investment 2020 advertises graduate level jobs in the investment management industry. Most opportunities are in London, but some in Edinburgh. Closing dates are in May/June for start dates in July/August. Register with the website to receive the latest vacancies.

The process

The application process for the larger organisations tends to be an on-line application followed by an assessment centre then successful candidates go onto the interview stage. Smaller organisations use CVs and a covering letter. Numerical/data interpretation tests often form part of the assessment tests. The Careers Centre has many resources for you to practice with and JP Morgan have sponsored a game to help you home your skill, graduate jobs numeracy game. eFinancialcareers also provide numerical tests for you to practice on, numerical tests. Risk Intelligence is the ability to estimate probabilities accurately. People with high risk intelligence tend to make better predictions making it an attractive skill for many financial positions this quiz will help you test your RI.

The majority of banks will test candidates against "competencies" in their applications and interviews. It is therefore essential you find out the competencies valued by the organisation. These can often be found on the website. There is a current trend among Financial Organisations to change their selection process from assessing competencies to assessing motivation, business acumen and inherent strengths.

Most firms will provide advice on their application processes - check individual websites for details.

These websites have a wealth of advice on the investment banking application process:

Finance CV/Resume

Most Investment Banks and Investment Management companies prefer a one page CV, especially if US based. Remember always to read the job specification/internship description and tailor your CV to that. Here is an example of a US resume. US finance resume Find out how recruiters assess CVs Efinancialcareers - has some useful advice.

I-Banking Interview Practice

Opening City Doors - is a website which contains advice on interviews - face to face and telephone.

Employer-specific interview questions

Advice from a recent alumni

Interview Prep (For US and UK):

"My first banking interview was at Morgan Stanley, and I remember leaving and realizing that I was not properly prepared. Unlike some of the other interviews I had done, there were a lot of technical questions. I had not expected this in a first round, and HR had even suggested that the first round would be largely qualitative. I was wrong, and learned that it’s massively important for students to be prepared to answer full-on technical questions in round one. Luckily, most of the technical questions in banking interviews are formulaic and can be learned if you just take some time to study, regardless of your academic background. I bought myself a prep-guide for one-to-two hundred dollars, which proved to be a great investment. I understand that is not an option for everyone, but if possible, I always recommend people spend the money. If that’s not possible, there are plenty of free resources online that at least get students familiar with the technical questions asked and how to best answer them."

Relevant Postgraduate Study

St Andrews graduates (especially from non-finance related degrees), often enrol on a relevant postgraduate course. Graduates from finance-related degrees enrol on more specialised postgraduate courses. NB If you are a final year student with a place on a Masters programme, you can apply for a summer internship, as technically you are still in your penultimate year of study.

Non finance related courses

Former graduates have enrolled on the following courses:


Finance–related courses

Former graduates have enrolled on the following courses:


Read the efinancial careers article The best UK schools for working in finance.

Search for relevant postgraduate courses on Prospects.

For further information on researching and planning for a postgraduate qualification, please visit the postgraduate study page.

Key UK links and resources

Careers Centre resources

Online

Use CareerConnect, your central careers hub, to:

GoinGlobal

Related Careers A-Z pages

Books:

Take Away

Employer reports

General finance-related careers information

Ethical Finance

Professional Bodies, Trade Organisations & Journals/Magazines

 

USA resources

The USA job market and recruitment timetables, for both internships and graduate jobs, for sectors of employment often differ from the UK.

The Careers Centre subscribes to the reputable independent USA careers information and vacancy provider Vault. The links below will take you directly to Vault subscription resources which cover this sector. You may find further useful and relevant resources linked from there as well.