Wall Street Career Paths

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  • Wall Street Career PathsIntroduction

    Michael Herlache MBA

    Doctorate of Business Administration Candidate 2020

    Wall Street Career PathsIntroduction

  • IndexI. LETTER TO A FUTURE WORKER ON WALL STREET

    II. WALL STREET PREPARATION

    III. WALL STREET CAREER PROGRESSION

    IV. INVESTMENT BANKING

    V. MERGERS AND ACQUISITIONS

    VI. DEBT AND EQUITY CAPITAL MARKETS

    VII. SALES AND TRADING

    VIII. INVESTMENT BANKING SKILL SET & KNOWLEDGE

    IX. INVESTMENT MANAGEMENT

    X. BUY-SIDE RESEARCH

    XI. SELL-SIDE RESEARCH

    XII. HEDGE FUNDS

    XIII. PRIVATE EQUITY

    XIV. RESEARCH SKILL SET & KNOWLEDGE

    XV. INVESTMENT MANAGEMENT SKILL SET & KNOWLEDGE

    XVI. PRIVATE WEALTH MANAGEMENT

    XVII. PRIVATE WEALTH MANAGEMENT SKILL SET & KNOWLEDGE

    XVIII. CORPORATE FINANCE

    XIX. CORPORATE FINANCE SKILL SET & KNOWLEDGE

    XX. COMMERCIAL BANKING

    XXI. COMMERCIAL BANKING SKILL SET & KNOWLEDGE

    Wall Street Career PathsIntroduction

  • I. Letter to a Future Worker on Wall Street

    Dear Future Worker on Wall Street,

    Though the nature of financial system continues to change in order to reflect the demands/needs/priorities of the society at large, there will continue to be a wide breadth of opportunities available for those looking to pursue a financial career on Wall Street. From investment banking to private equity to research, there are numerous careers available for those willing to venture to the East Coast.

    There are however, certain skill sets and knowledge bases that remain critical to your successful performance in each of the prospective careers. This guide seeks to match the relevant skill sets and knowledge bases to the given Wall Street career in addition to providing you with a general overview of the respective career path.

    Furthermore, in addition to the pertinent technical skills and knowledge, Wall Street employers look for fit in their potential employees. This means that they are looking to understand why it is that you are uniquely qualified to work in their environment.

    Now more than ever, each future worker on Wall Street must differentiate themselves in order to gain an edge in the hypercompetitive recruitment process that defines Wall Street. This means not only possessing the humility, integrity, and tireless work ethic which characterizes the American Spirit, but ultimately mastering the skill sets and knowledge bases required by the given career.

    It is our sincere hope that this document may guide your efforts in determining your career path on Wall Street and the acquisition of its respective compulsory knowledge and competencies.

    Michael Herlache

    Alpha University

    Wall Street Career PathsIntroduction

  • I. Wall Street Preparation

    As you meet with potential employers, you need to be well-informed as possible about the finance industry in general and the employers sector within the overall industry in addition to the specific firm that you will be visiting. When preparing to engage professionals at a Wall Street firm, one must know the following:

    CURRENT CLIMATE

    Know the sector within the industry

    Know how the sector is segmented and where the company you are meeting with fits within the industry

    Be able to explain the competitive landscape, including the top players/organizations

    Be able to identify the market size (i.e. revenue base, number of clients, number of employees) for the top players/organizations

    What changes in the external environment have had the most dramatic impact on the sector and how has this changed the business model?

    FORECASTING

    Consider what is likely to happen in the sector over the next three to five years

    How will this sector grow/change?

    Which organizations are likely to benefit or be harmed by these changes?

    FIRM

    Know the primary products and/or services offered by the firm and how they are unique

    Know the culture of the organization, how it is different from the competitors, and how it affects the way work gets accomplished

    Be knowledgeable about significant as well as recent transactions and what the firms role was in the transaction

    Be knowledgeable about the background of the leaders of the firm as well as the people that you will be interacting with

    Wall Street Career PathsIntroduction

  • I. Wall Street Career Progression

    While each financial services firm on Wall Street will ultimately have its own unique organizational structure, most follow a common promotional path for their employees characterized by similar job titles. Thus, what follows is a break-down of the most common career path starting from an entry-level position.

    ANALYST

    Those first entering the financial services industry typically begin their careers with the title of analyst. While an analysts actual job responsibility will differ across industries, time is mostly spent performing company or sector research, manipulating and updating financial models, and drafting marketing material in effort to help the firm win business.

    Analysts can expect to spend approximately three years in this position before being considered for a promotion. It is at this time, the top performers will have the option to renew their contract with the firm, switch firms or careers, or attend business school.

    ASSOCIATE

    The position of associate is held by either a former analyst that has been promoted, or a recent MBA grad. An associates work involves managing of a team of analysts to ensure that the work being performed is accurate and timely. Additionally, an associate begins to interact with the client in order to address their lower-level needs. An associate will usually spend three years in this position before being considered for a promotion.

    VICE PRESIDENT

    Those holding the title of vice president (VP) are typically former associates who have made it to the next level. The role of a vice president involves managing a group of analysts and associates in order to deliver on business that the firm has won. This ultimately means a higher level of client interaction and responsibility for the given output of the work process. A VP may spend a number of years in this role as until they are either promoted or change companies.

    DIRECTOR

    For those steadfast and unique individuals whom can make it this far, the end game is in sight. At this level, the nature of the work changes, as the primary focus of the director is helping the managing directors manage client relationship. While delivering on business remains crucial, the bulk of the day-to-day minutia is delegated to the VPs whom report to the directors. The time period until promotion is highly variable at this level.

    MANAGING DIRECTOR

    The highest level employees in financial services firms typically hold the title of managing director (MD). Managing directors are responsible for bringing in new business and maintaining relationships with existing clients. Thus, they are the ones using the marketing material and research created by the analysts and associates.

    Wall Street Career PathsIntroduction

  • I. Investment Banking

    Investment banking is the business of raising capital for companies and providing advice on financing and mergers and acquisition restructuring alternatives. The field of investment banking does not refer to one function but a wide breadth of activities.

    Careers in this field may involve the valuation of potential acquisitions, assessing the credit-worthiness of bonds, company valuation, management of initial public offerings, equity and bond financing, in addition to a variety of consulting services.

    Investment banks are usually classified into two categories; Corporate Finance (Investment Banking) and Sales & Trading. Corporate finance divisions are tasked with raising capital and providing M&A advisory while the sales & trading divisions perform research and broker financial transactions on behalf of clients and the firm. It is important to note that although they may exist inside an investment bank; those working in sales & trading are not to be referred to as investment bankers. Rather, these professionals are known as either sales brokers or traders that work in sales & trading.

    Furthermore, within the corporate finance division of the investment bank, there exist groups that are divided along industry- or product-lines. Industry groups include: Financials, Institutions, and Governments (FIG); Health Care; energy; Technology, Media, and Telecommunications (TMT); and Consumer Goods among others. Product groups include M&A, debt and equity capital markets, and merchant banking in addition to others.

    While many of the largest investment banks have converted to bank holding companies in the wake of the financial crises, a typical full-service investment bank will offer the following services which further segment careers within the field of investment banking:

    MERGERS AND ACQUISITIONS

    Mergers and acquisitions (M&A), otherwise known as financial advisory, is the product group within the bank that advises clients on the strategic alternatives and analyzes the corresponding affects on the firms value-creation efforts. This product group includes M&A and restructurings & reorganizations in addition to other client-specific transaction expertise.

    M&A bankers guide their clients in determining which companies and/or divisions to acquire and which to divest (i.e. sell) in order to execute their respective corporate-level strategies. Ultimately, these processionals run what is known as the M&A process on either a sellers behalf