Anyone work in Finance?

[Ed4252]

Anyone work in the Finance field? Investment Banking/Accounting/Portfolio Managers/Financial Analysts etc.?

I'm curious to know how you all got started? How did you land your first few jobs etc.? How important is a MBA? I'm 25 years old and I'm probably already behind the curve in terms of work experience in this field and I've decided this is what I want to do. I've had years of experience in the computer field/some data entry jobs years during my early college years. How will job recruiters in the finance business view this?


I'm currently researching internships in this field but it's hard to tell which ones are good/bad. Is there a ranking out there or reviews of past interns and their experiences?

[Cornbread Maxwell]

It really depends on what you are looking to do. You listed 4 completely different jobs, each of which having different barriers of entry.

Typically speaking, portfolio managers almost exclusively come from the top business schools. There is a backdoor approach, but it requires you to start out as a financial advisor or "stockbroker". You then have to be such a good salesman that you convince your clients to basically let you have full authority of how they are invested. You then play the role of being a portfolio manager and move your entire book of clients simultaneously. Each client will have the same portfolio and you will buy and sell in bulk. This is actually a very good method as it frees up your time to follow the market rather than quibbling with individual clients most of the time. But again - it starts with being able to sell yourself so much that clients give you full autonomy of their assets. Many of the top advisors are now using this strategy.

Financial analysts are completely different as you almost never deal with clients. It is much easier to get your foot in as an analyst than as a portfolio manager. Try your regional banks as they should have an equity research division for their trust departments.

Accounting is a completely different animal - it has almost nothing to do with finance. If you want to be an accountant, the best way to go about it is to get your liscence and look in the paper - there are always positions available.

Hope that helps.

[slomo007]

Good to see you back CBM.

[RugbyD]

like Cornbread said, accounting is a totally different animal, although it can be a good springboard if that's what your college training was. Sounds like we can knock that one out.

Generally the finance heirarchy goes like this: analyst/associate/VP/director, though there is some variation and nuance within those, but for my purposes here we'll just go with this structure.

first thing to think about is if you want to be buy-side or sell-side. generally speaking sell-side is better pay, worse hours/lifestyle.

in investment banking (IB), unless you go to a small shop and can hit the ground running, you won't be able to break in at the analyst level. Your likely entry point is at the associate level, which you either need an MBA for or have to have been a good enough analyst to get hired directly into that position without going to Bschool. IB is sell-side.

Being a securities analyst can mean a ton of things. It can be buy-side or sell-side. Equity or fixed income. Institutional or retail(individual investors). The fixed income universe is far bigger than equity. Equity tends to be a more tangible concept for those not in the industry b/c you can associate a name and a product with a stock. Fixed income can mean fixed rate or floating rate debt, investment-grade corporate bonds (dying product, don't go into it), high yield bonds, leveraged loans (my area), govt bonds, asset-backed securities (ABS), mortgage-backed securities (MBS), convertibles, and all sorts of other stuff including derivative products (myriad swaps, options, swaptions, futures, etc.). I wouldn't expect you to know which area you like best, but you have a lot to choose from.

Being a portfolio manager can also mean a bunch of different things. PMs are VP level or higher. It can be for retail or institutional investors, it can be a mutual fund, structured products (my area) like CLOs and CBOs, hedge funds, insurance companies, banks, endowments, etc etc.

Being a financial advisor for retail investors tough, but if you can build a good book of business you can do well. This was always the least attractive area for me, but there are certain personalities that thrive best in this area.

If you don't want to start your MBA right now, get cracking on the CFA (http://www.cfainstitute.org). Simply indicating your candidacy for the CFA on your resume will help get you in the door at a finance job, even if it is in the operations or IT areas. Passing the first level or two will take you a considerable step further. http://www.vault.com is also an excellent resource for ground-level info.

feel free to ask me anything you want.

[Ed4252]

Thanks for all the great responses. I have another question. Would it be better to dive right in and apply for a financial analyst job or would an internship be better? What are the disadvantages/advantages of each?

[RugbyD]

Thanks for all the great responses. I have another question. Would it be better to dive right in and apply for a financial analyst job or would an internship be better? What are the disadvantages/advantages of each?

get in however you can. sooner is better. the main difference in your case would be pay since this is a new venture for you. internship is probably easier since the company wouldn't be committnig a full-time position to an inexperienced individual.

[StlSluggers]

I know CM and Rugby summarily dismissed accounting, but...

I've had years of experience in the computer field/some data entry jobs years during my early college years.

I had a very similar background coming out of college. My career path:

Accounting degree --> AP/AR Clerk ( ) --> Corporate Accountant --> Corporate Financial Analyst --> Corporate Web Analyst

That's 5 years from graduation to present day.

What exactly is your interest in finance? What is your computing background? Have you dabbled with database mgmt at all?

[The Artful Dodger]

I had taken the extremely unconventional route into finance. I work at a Web 2.0 startup and for the first few months, I was working on the content/marketing side. Knowing that I had some experience in financial modeling, I was working on the side with our VP of Finance on an operations analysis project. Because our finance department was previously a one-man show and our VP of Finance had enough faith in me to adapt in the finance department, the rest was history and I've been working in Finance ever since. It's great experience for me, seeing how it feels a lot like an apprenticeship almost.

Basically, the last 6-7 months has been a crash-test course into just about everything. The first couple of months were brutal, learning Oracle to handle GL, AP, and AR primarily, but have mastered it pretty much. Thereafter, I had ventured into things like cash true up, analyzing trial balances, creating revenue data files, budgeting, month-end close, and even a little tax accounting (thank goodness we have an outside firm handling the bulk of this). I've had to learn on the fly fast, as our VP of Finance has stepped down and is working as part-time, off-site consultant (meaning more responsibility), all the while skipping a few rungs up the ladder on the fringes of the top tier of management. It's a challenging job, but I think it's a lot more rewarding than my previous position. Relatively bigger companies have departments for each part of the accounting cycle, but here I'm tackling everything and though it can get hectic,

Based off my experience, I can tell you that strong accounting background can do nothing more than help you, but you'll find that finance becomes more of an art.

Also, as the guys have said, it also depends on what kind of branch of finance you want to get into and your work experience should direct you to where you want to go in finance. Personally, I want to be an entrepreneur, but I have a great interest in Venture Capital if that's not the avenue for me. I've always heard it helps to work in a few startups the first couple of phases in your career. You become exposed to the challenges a startup faces in every aspect and you become more educated with what it takes to build a successful startup, which is crucial when you invest in a company. It doesn't hurt to work on the Finance side of a startup, seeing how the financials are the lifeblood of the business. If not, then get some meaningful management consulting experience or work for a company like Google or Yahoo, big enough to be stable, but has a startup feel due to their many product divisions. If you want to go into IB or securities, the paths are relatively distinct.

[JTWood]

The first couple of months were brutal, learning Oracle to handle GL, AP, and AR primarily, but have mastered it pretty much.

You're using Oracle for a startup? How big is the company?

[The Artful Dodger]

The first couple of months were brutal, learning Oracle to handle GL, AP, and AR primarily, but have mastered it pretty much.

You're using Oracle for a startup? How big is the company?

I believe a month or two before I jumped on board, they started to implement Oracle back when I think there were about 20 employees. I think it's now 35-40 employees and we have a few offline consultants working for us working in Europe.

They decided to use Oracle for the sake of upping the valuation of the company as opposed to using Quickbooks.