Advice for a budding female (or male) investment banker

posted November 25th, 2009 by Janet Graham - 2 Comments

After being around the banking and investment banking business for 25 years, I have had the opportunity to mentor and work with many young people in the business.

I have seen a number of young people succeed brilliantly but I have also seen many more fail.

To obtain an entry level position in investment banking one has to be intelligent, aggressive, communicate well and have the ability to reduce complicated concepts to writing – that is the baseline.

So why do most people fail and only a relatively few succeed when everyone starts off, apparently, at the same baseline?

Part of the reason is that there is a natural weeding out process as there are a lot less senior jobs than junior jobs but setting that aside, in my view, the first reason that most aspiring investment bankers fail is that they are actually in the wrong job. They do not appreciate what an investment banker does and what they are getting themselves into. In other words, they don’t know what the game is about and sometimes don’t even know that there is a game going on.

Despite the best of intentions, most young people seek advice and network with people in similar circumstances to themselves or they network with junior professionals who are already in the industry who don’t know what the game is about either. If I had a dollar for every young person who has told me that they want to work in investment banking because they are technically brilliant and like working on complicated financial issues and want to go into investment banking because they don’t like sales, I would have retired many years ago.

An investment banker is in sales. We are constantly selling. We could be selling vacuum cleaners or used cars (and we have to sell a few of those from time to time) however, we just happen to be selling high end financial products and financial advice. If a new entrant doesn’t understand that, they can spend 4-5 years working 80 hours a week, working weekends, working holidays, eating bad pizza at their desk every night at 10pm until one day, they will either self select out when they figure the game out or the decision will be made for them.

If you don’t want to be in the relationship/sales business, don’t pursue investment banking as a long term career.

The second reason people fail, in my view, is that they do not possess basic judgment and common sense. While judgment is something that you can develop, you either have common sense or you don’t as I don’t believe that common sense is a learned skill. A junior investment banker has to be able to think strategically and by that I don’t mean figuring out if one company should merge with another company or that a company should do this or that to its capital structure. On any pitch, idea or transaction there is a start point and an end point and many dots in between that have to be connected. Many people can’t think in a strategic way to determine what the dots are and how to connect them. I have seen time and time again, many people who were extremely intelligent, who were an excellent Analyst who couldn’t connect the dots in terms of what is required of an Associate and similarly I have seen people who were excellent Associates who couldn’t connect the dots on what is required of a Vice President.

If you do not possess common sense or have the ability to develop judgment, don’t pursue a long term career in investment banking.

The extremely rare talent is that person who is smart, ambitious, technically brilliant and has the ability to develop trusted relationships and the ability to turn those relationships into money at the appropriate time, because at the end of the day, pucks have to go into nets.

For that rare person, investment banking is a wonderful career. An investment banker deals with complex financial issues that normally involve large amounts of money. An investment banker deals with senior executives and boards of directors as a trusted advisor and helps to shape the future of the companies he or she deals with. An investment banker is usually fortunate to work with extremely bright, ambitious colleagues as part of a team and the successful investment banker is paid very well for the value that they bring.

 

This post was written by a very senior and very successful investment banker. He was invited to “guest post” here along with others in order to bring a perspective other than mine to the site. And I am grateful to him for taking the time to do so and for having the courage to be the first to offer the male perspective.  It is my hope that others female and male will do the same.

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2 Responses to “Advice for a budding female (or male) investment banker”

Comment from Caroline
Time November 26, 2009 at 3:17 am

I really liked this post. In particular, the part about people just starting their careers who only network with other people in the same position, so don’t really understand how the game works. I think that’s a very accurate assessment.

I also liked the part about sales being an important part of the job. Its something I hadn’t thought about before.

Comment from Linda Palin
Time November 26, 2009 at 11:46 am

That is so right. I have been “mentoring” for over 25 years and the essence of what I tell individuals is two fold. Ours (capital markets) is the best business in the world – it is challenging, remunerative and competitive. For those reasons, to succeed you have place yourself in a job where you have the best chance of success. Get a good understanding about what the main ‘job groups’ are and the requisite skill sets, and, after some navel gazing and self-analysis, target the ones you are suited for. The example I always use is that people mistakenly think brokerage research analysts spend their time writing research and producing spread sheets – not so -marketing and communication skills (perhaps unfortunately) trump analytics.

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