You want to work in a high-paying, client-facing 'front office' job in an investment bank. So, should you go for a job in mergers and acquisitions M&A, or for a job in sales and trading? How can you tell which will best suit your skills and personality? And what should you say in interviews when you're asked for the reason you chose one over the other? Well...
You might think that to work on the trading floor you'll need to be excellent at maths and that to work in M&A you'll need to be excellent at schmoozing clients. However, this isn't entirely true... Banks insist that the skills required for both jobs are pretty much the same.
The reality is that junior M&A bankers don't actually schmooze clients. The first three years (at least) of an M&A career are spent creating mathematical models in Excel in order to value the companies that are being bought or sold. "M&A is still very mathematical," says Malcom Horton, global head of recruitment at Nomura. "- If you're in M&A, you'll need excellent mathematical skills in order to build the valuation models that underpin deals."
Both graduates going into M&A and graduates going into sales and trading need, "a mathematical aptitude," agrees Faye Woodhead, global head of graduate governance, strategy and planning at Deutsche Bank (although she adds that a further degree in mathematics, while useful, isn't mandatory for either area). Similarly, Woodhead says all graduate hires at Deutsche need to be, 'relationship focused,' not just the graduates going into M&A.
And Belina Mann, head of graduate recruitment for EMEA at JPMorgan, says there are no real differences between the skill sets required for M&A or sales and trading. "We look for a diversity of study backgrounds and find there isn't really a specific, 'type,' of trader or M&A banker," she tells us.
So, if you're not selecting sales and trading over M&A (or vice versa) on the basis of your skill-set, what are you selecting it on?
Lewis Talbot, director of City Careers, a company which places graduates into finance roles in the City of London, and former head of the equity and multi-asset portfolio analytics group at Blackrock, says that if you work on the trading floor, you'll get to go home when markets close. "The hours in trading are more regular," he says. "Markets are only open until 4.30pm and after that you can go home."
If you work in sales, you may need to work after hours, however. Evenings in sales are typically spent 'entertaining clients.' This can make for a tough lifestyle (given that you need to be in the office again well before markets open at 8am), but some banks in London at least are now said to be imposing entertainment curfews so that their juniors can get some sleep.
If you work in M&A, on the other hand, your working hours are a lot less structured. It's M&A bankers who are notorious for working evenings and weekends and pulling all-nighters to get jobs done. Junior (and senior) M&A bankers often work on several deals at once, which can create a lot of urgent work that needs to be completed before they go home. "If you work in M&A, you'll need to be able to grow into a client person, but you'll also need to prove your worth in the short term by being the person making the final refinements to the pitch book late into the night," says Ros Claase, head of student development at Edinburgh University Business School and a former graduate recruiter at Goldman Sachs.
When you're choosing your ideal banking career, you also need to consider the pace at which you like to work and the speed at which you like to get feedback on your decisions.
If you work in sales and trading, you'll like your feedback fast, says Horton. "In trading, you'll be sat in front of a screen all day, making quick decisions about what to buy and sell. If you work in M&A, you'll be working on long term deals that can take time. - If you're happy to spend a year of your life on a transaction and that feels good, then M&A is for now. If you want to do a deal right now, you're better off in trading."
"A markets role can be very interactive and high-paced," says Claase. "Every day is very rapid-fire and reactive to the markets, but at the end of the day the markets close and it's all over until tomorrow. (Although you may then need to entertain clients if you're in a sales or sales-trading role.)"
By comparison, Claase says M&A and corporate finance jobs are about endurance. "They're a marathon compared to a sprint. You can be working on some very long haul projects, which are intense while you're in the middle of a busy period, but are very methodical and about attention to detail in terms of the research you're doing, the valuations you're working on and the pitch books you're preparing."
"M&A is more project-focused than sales and trading," says Talbot. "It's a more academic discipline. It attracts people with a different, longer-term, outlook to the people who work in markets." M&A bankers need to be patient, Talbot adds - they only get to meet clients after they've done their time crunching the numbers. By comparison, if you work in a sales role you'll be interacting with clients and persuading them to buy securities from you right from the start.
If you like working in a noisy environment, you'll love the trading floor. If you like peace and quiet, you'll love M&A. According to this ex-M&A banker, people who move from the calm of M&A to the riotousness of the trading floor can suffer from headaches until they become acclimatized. M&A is cerebral and reflective, he says. Trading is reactive and chaotic.
"If you walk around the M&A desks, it's a more quiet environment," says Claase, "On a trading floor it's loud - everyone's talking, on calls and looking at multiple screens."
When you're justifying why you've applied to sales and trading instead of M&A, you need to speak in terms of why you think you'll enjoy the job - not the reasons why you think your skills are suited to one role instead of another.
"When deciding on a career it’s about looking at the motivation for the type of role you will be doing – be it sales, trading, M&A," says Mann.
If you're choosing where to work, Woodhead at Deutsche says you need to ask yourself the following questions: