The role of investment banking analyst has transformed dramatically since the financial crisis, and there is growing demand for graduates with deep understanding of changing consumer demographics and investment risk and securities analysis, as well as experience in statistics, quantitative analysis and information modeling.
The industry focus has shifted dramatically from aggressive risk taking to a more cautious approach that buffers against volatile markets and events.
Those with the right skills have plenty of opportunity. A recent study by Accenture found that global investment firms will hire 21,500 analysts by 2015, a 23% jump from 2010. The rate of investment banking analyst jobs will "far outpace" the overall rate of employment in the U.S., the U.K. and Japan, the study said.
Here are some unusual ways to prepare for a job as an investment banking analyst.
TALK TO YOUR PEERS
You know to look to older people for sage advice, but you’ll also need to cull insight from other people born between early 1980s and the early 2000s. A small group of millennial investors are poised to inherit some $40 trillion from their Baby Boomer parents, according to the Johnson Center for Philanthropy. A new report on “Respecting Legacy, Revolutionizing Philanthropy” says this group is interested in impact investing that advances social, not just financial, goals. Understand and secure you client base now.
EXPLORE NEW CULTURES
“Study abroad,” advises Debra Wheatman, founder and president of Careers Done Write. “Going abroad is not just a wonderful way to immerse yourself in a foreign culture, learn a new language, and develop new friendships outside of your current college circle, it also is an amazing way to demonstrate to an investment banking recruiter that you have an adventurous, risk-loving personality that thrives in change and unfamiliar territory.” (Despite an overall decrease in risk appetite, analysts do need to show willingness to make brave decisions.)
“It will also help to persuade an associate or senior analyst to like you/hire you during recruiting as they will be drawn to your stories and will love your personality,” she adds.
While you’re overseas, don’t forget to make friends and stay in touch (read: future clients.) Overseas investors are quickly climbing up from the middle class into affluence.
Statistics, quantitative analysis and information modeling aren’t just for quant nerds. Pay attention in math class. Forming opinions in today’s marketplace requires comprehension of complex mathematical and statistical modeling, measurement and research. By assigning a numerical value to variables, quantitative analysts try to replicate reality mathematically. You’ll need to know this in order to evaluate performance and financial instruments, as well to predict real world events such as changes in a share price.
GET TO WORK NOW
“Start a business while you are an undergrad - no matter how small or trivial,” says Wheatman. “The best analysts know business inside and out from accounting to operations and strategy perspective. Understanding the fundamentals of how to forecast sales, create assumptions (model-building), and evaluate the quality of a business strategy (cash flow and expense analysis) can come directly from running your own business.”
“One of the most successful banking analysts I knew ran a concert ticket exchange operation as an undergrad, made a ton of side income as a 20-year old and killed it as an analyst because he knew how to handle the quantitative and qualitative aspects of the banking analyst job already,” she says. “He could break down why a company was a great or terrible merger candidate to simple terms that stemmed from his familiarity and experience running his own shop. Business large or small is driven by the same fundamentals and the quicker you get up to speed the more likely you can relate to seasoned bankers on the sell-side.”
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