As the title mentions I moved from a fixed income EB S&T program to a BB associate IBD - WSO is heavily under represented in S&T so I can answer some q's about what it looks like across various desks as I wish I knew more prior to joining.
Background is from a non-target school with good grades and great internships but from an econ / finance backround -- nothing terribly challenging. Did a year in Corporate Rates Derivs Sales & a year in in Flow Trading so ive seen what all the teams look like and where the analysts try to exit to.
ask me anything that might be helpful.
Why did you switch over?
I didn’t think I could make the jump to HF or AM and am naturally better in sales. Sales in s&t is truly what you make of it but I could not see myself in a flow sales role where you have little to no value add to the client. Sales in corporates is a bit better because the work is a bit more strategic with the treasury of F500 but at the end of the day I didn’t want to sell that product for a career.
Agree with flow sales. But how do you think non-flow business? Some banks call it cross-asset sales or non-flow financial institution sales. And how do youn think the change in working hours? They are totally differennt 2 lifestyles.
was the transition difficult?
Not necessarily in this hot job market. Challenging to go from s&t straight into M&A but a coverage team or dcm was not that difficult.
I think starting off in s&t if you think you have a passion for it is good so that you check the box. Often times teams in traditional IB will hire out of s&t as you have your exams completed, know how to handle high pressure situations and ultimately have the tolerance to stay in the business.
Was this a structured rotational program? If so, was your team/s&t side supportive of the move? Or did you have to hide your ambitions and network/interview secretly? How would you recommend someone in a rotational program to coordinate this move? What type of IBD group (product or coverage) did you lateral into?
yes structured rotational program. team S&T was highly not supportive of this move haha. I had to hide and take plenty of 'doctors' appointments for interviewing.
Ultimately I probably could have been transparent and moved internally. Junior talent is so hard to come by now that even though your MD might not want you to leave, the division head will ALWAYS try to keep you in the bank no matter if that means moving you to a different floor. In hindsight I should have pushed harder to move internally as I would have probably had my pick of coverage teams that had space. I recommend that you start voicing that you want to get out of a flow seat and dip your toes into DCM for example. Your manager might not love this idea but with enough annoyance you will get moved -- they dont want to lose you.
I am currently moving to product base role at the new firm but once you are under the IBD umbrella its a bit easier to move. Maybe not to say Tech coverage or M&A but i firmly believe that the associate 1 position is the most sought after. In this job market if you are in a product group at a bb it feels like you can literally just raise your hand
So you went from 2nd year S&T analyst (soon to be associate) to 1st year IBD associate? You didn’t have to take a year haircut?
I was in a very similar situation: 1st year S&T associate and was interviewing internally for banking years. Had some offers but they wanted me to take a year haircut to be a senior analyst with one year to associate promotion. I ended up walking away cause I didn’t want to title and pay haircut and went to a buyside role instead. Wonder if I would’ve had better luck now
No 1 year haircut. Probably better luck in todays job market. Thats good relevant info for me to know (maybe its a unique situation)
Moving to buyside sales?
Dang well done. Mind if I PM you which bank out of curiousity?
No I moved to an investing role at a large LP
1. What kind of technical skills would you recommend for an incoming trading SA? Thinking specifically about the more rates/macro type desks.
2. What prompted the move from rates derivs sales to trading? Generally interested to get your thoughts on sales as a future career, seeing as the S in S&T gets a lot of hate on some of these message boards from people who've never actually sat in the seat.
Definitely. I would be cautious as to the advice given here in S&T.
1. Technical skills for SA trading include being incredibly quick with mental math. You need to know your spot delta PNL risk given a 1 bp change in x and how that affects your positions in Y & Z. Its not terribly complicated mental math but you definitely need to be comfy enough where reaching for a calculator feels slower. You also need to know excel like the back of your hand as the various pricing models need to be updated constantly and if you can run your desks PNL and keep the pricing models alive without having to get the quant on it-- huge stuff. For rates you need to know duration, convexity etc for FX idiosyncratic risks for specific countries, for FX Vol the greeks. It is very dependent desk to desk. if you have a specific desk lmk.
Other than that its more soft skills... but dont overlook the soft skills. You will not get PNL until after you pass your exams and are tested through dummy trades. This means 6 months into your first year. BTW All that nonsense you have read about not taking any positions is garbage. Your job is all about taking positions that are helped via the sales guys offloading risk through 2 way flow. That means you need to be able to lose 100+k as an analyst and be emotionally ok with that to where you resume trading as if nothing has happened. I think the most OVERLOOKED skill is the ability for your desk to like you. Take their banter on the chin, dont tell stupid stories and be genuinely interested what they have to say. dont ask questions when they just got smacked in the face by a bad PNL day.
2. I think as a whole trading is a bit more interesting. If you want to move to the HF seat or AM then trading is hands down the way to go. I loved my seat and thought it was like being in a casino haha. That being said going to a macro HF is very very very hard and btw not as comfy of a seat as some imagine - but that's a different topic.
If you do not want to go to a HF or AM seat then there is simply no reason to be in trading. Example: the g10 fx trader on the team would be awake for the asia open, asia close, london open, london close, ny open, ny close all the while to get picked off by algos and messy markets. You have to live eat and sleep trading in order to be successful on the as you are constantly on. On the whole, I think an average trader makes more $ than an average sales person for this reason.. but the reason or going into Derivs Sales is that the rainmaking exotics sales guy on the floor will outperform every single person. Example: MD at my bank came from another bank. He onboarded 3 new clients to my bank who liked him at his prior job. all 3 clients were responsible for 5mm in Trading + Sales PNL plus he maintained the other existing client relationsjips at the bank. That right there is 5mm in 'alpha' for the bank without ever taking a position and without ever losing a nights sleep if your product colapses overnight. That beings said.. without the relationship sales monkeys are easily transferable. If you want to go into sales pick the most tricky illiquid product and make absurdly deep relationships in the space. (people only trust you as a sales guy if you know what you are talking about)
About having take positions - is that specific to rates though (volker exempt)? Or does it apply to all FICC
Really new to snt so curious about exit opps for analysts. Also, if I like ib over snt but only have a summer offer for the latter, any suggestions for next steps?
Trading -- AM and HF
Sales -- Banking, Corp Treasury, Startups, Crypto OTC Sales.
Do your sales role this summer. Hopefully its at a good bank. GET THE RETURN OFFER... than you can always lateral into DCM if you were in FI or ECM if you were in Equity at another bank. If you can do an ER rotation this summer its so dam transferable to IB. If you were in securitized products in S&T guess what, theres a securitized products group in IBD. GET THE IBD OFFER in whatever makes the most sense and guess what? now you network onto other desks before fulltime starts the next year. If you are clever, do a senior internship in M&A or whatever u want to get your mitts on (tech growth equity) to be more marketable for that prodcut / coverage team
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Follow up from your reply to my thread:
Is it worth it to do 2 sophomore S&T internships (one in Fall 2022 and one in summer 2023) for BB SA 2024 recruitment in Feb-May 2023 or should I just stick to the one in summer 2023? The fall one would be BMO/RBC level whereas the summer one is Scotia/National/CIBC level.
Pros of doing two:
- Actual points on resume from Fall 2022
- On the job skills might make recruitment easier/tangible talking points
- More experience = More attractive?
Cons of doing two:
- Delay school by 1-2 terms (20k tuition)
- Reduced earning potential if I end up in a Canadian bank anyway
What is your opinion as someone who previously worked in S&T and is one or the other more worth it? Am I overthinking my position. For context, I accepted the summer offer already and I'm relatively certain I can secure the fall offer (good connections).
Personally, I would not delay for 2 sophomore S&T internships. If you are doing a sophmore summer at a scotia type of bank you will be in the running for a junior summer at a BB considering all the rest of your resume checks out.. if not then maybe think about it.
I would save the delay card for as long as possible... or even do the sophomore internship while attending school if possible. I had friends not get return offers after junior summer and then use their card to delay grad a full semester in order to be eligible for a yet another SA recruitment position. All in all if you get into a MM S&T role with 1 year experience on a good desk... a BB will inevitably be hungry for you. Ik kids in FI S&T getting offers left and right to lateral from their current role to a BB although that should not be the end goal.
Thanks for the reply. Appreciate the advice. As a follow-up, I want to try different things to know which kind of desks I prefer/dont prefer. For example, the current Fall internship I'm gearing towards is a securitization desk whereas my summer 2023 one would likely be in trading.
Do you think it's possible to balance both school and the fall internship? If I do the fall coop, should I put less effort into the internship than I would a summer one, but do it anyways for the experience and multiple experiences to speak on? How understanding do you think my team would be if I told them I was also doing part-time/full-time school on top of the internship (for example would it be a bad look to come into the office past 7:30AM for securitization?). Any further outlook on this would help me a lot. I'm considering doing 2 year long courses as a parttime student during the fall semester and just grinding it out with no social life LOL (luckily the final exams would be end of April which hopefully I'd be past the resume/GPA review period for BB's by then :D)
It would be awesome to speak on exactly why I want a specific desk when interviewing for a BB since I literally would have 2 experiences to back it up :) Also this might be a dumb question but do all top BB's have a rotational program for S&T following grad? I know all the big 5 canada do but no idea about BB NYC.
Is coding a required skill in trading nowadays
No. Obviously it depends on what trading role but in the vanilla stuff equities, fx, rates then definitely not. Knowing some VBA is helpful in building out pricing models and automating workflow but that’s about it.
It would be helpful to use python etc to sort data sets but sell side s&t is less of long term plays so who really cares about that. On the sell side it’s so fast paced with positions closing daily or weekly. No real need for coding there. That being said if you want to move to buyside trading opps its definitley helpful.
My team loved to hire people with CS backgrounds which I completely did not understand. I would rather have someone with an econometrics background who was more passionate about global macro or bond math than spreadsheets. A use for a 1st year quant is of little use on the desk but MD’s like it for whatever reason - it’s a buzz word just like being from an Ivy or being a d1 athlete.
What was the return offers like for your SA class?
Talent is so squeezed rn in FI s&t that it was 100%.
My buddy at nyu was one of the few looking to go into sales on the sell-side because it’s not in vogue. Just don’t mess up and have genuine interest and you will be fine. Getting there before everyone else does and staying awake all day with high energy is the hardest part for an SA. You wouldn’t believe how hard it is for kids to get to the office at 6:30am every day on the dot without having bags under their eyes from obviously going out the night prior. 10 weeks is so easy to just buckle up.
Is sales not that competitive compared to trading/IB/ER?
A few questions for you on your transition to IB:
Did your banking interviewers/team/recruiter want you to have some modeling experience?
Did you need to teach yourself any of the basics and did you use courses?
Did any banking teams you met with want you to take a year's demotion?
It seems every IBD associate posting requires IB experience, how did you overcome this hurdle?
Thanks for doing this AMA
Nice username. Don’t go into sales trying to pivot unless ur landing in a bb sales position or something you can really leverage.
Yes they asked to demote but at bbs it’s generally structured where you can choose. Also who cares it’s 10k in salary difference.
No they didn’t need modeling background but I had it from internships. They want to know you won’t leave the team and that you know how to use excel and ppt like the back of your hand.
I mean learning ibd is not that difficult. Just learn the technicals. Only some EB’s give you model tests.
Technically s&t is investment banking experience under linkedins eyes. Just don’t go straight for associate promote. Redo a year. It’s going to be a higher salary than your sales job anyway.
Is S&T just macro really. They are no long term positions, no long term equity positions or debt positions? Is there any valuation used. How can you have an opinion on an equity or debt without understanding valuation ratios etc.
S&t is as broad of a definition as Saying I’m in finance.
If you are on a bond trading desk you understand bond math, convexity, duration, monetary policy, yield curves, macro macro macro.
If you are in special situations equity derivatives then sure you need to dig into capital structures. (More ib type of stuff). What’s your question.
Does anybody hold positions for longer than a couple months?
Are their traders that take significant risk?
Can you break down revenue generation by bid ask spread, sales pitch to get the volume, or pure P&L risk taking?
Do you think it is possible to go directly from corporate rates/fx derivs sales to PE? Or would IB need to be a middle step
You could go into PE sales but no. You aren’t going to go from s&t to PE mega fund without an in between.
you mean IR at a PE fund?
What desk should I work at for sales if I want to work the least hours?
Ur in the wrong industry (go to tech sales)
Thanks for doing this AMA, it’s been tremendously useful for me as I’m about to start working in corporate rates and FX sales as a 1st yr analyst. I’m interested in the strategic side of the business and the exotic options, however I’m concerned it’ll leave me with a skill set too niche if I ever want to jump ship - is this true?
You mentioned that potential exits are in startups, what kind of roles specifically were you thinking of?
Lastly, was there anything you did to become a “better” salesperson faster?
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