Unpopular Opinion: As long as you studied Finance you can do nearly every role in the space

Sidenote: This does not mean that you be accepted if you applied but rather I am trying to shed light on a lot of "common practices" that's just made up formalities and mumbo jumbo. 

I often see people say things along the line of "if you want to do X as an exit opp, you should work in Y to gain the skills needed". This leads to people wanting to get hyper specialized even in college, I've had friends turn down Generalist M&A roles because they wanted to do Distressed PE later down the line and only wanted to get into Restructuring roles, it was a huge gamble and only one dude ended up in Distressed PE anyway.

My job recently had a lot of ex Leveraged Finance people get hired and they still took a few months to get up to speed and I basically had to train a lot of them like a new college grad, I remember when we were recruiting they did not want to select anyone that didn't do Lev Fin and only wanted people from certain sector groups. Now that training is behind us i don't see how working in Natural Resources versus Consumer Retail IB would've better prepared anyone.

When I was younger i worked in Big4 Audit and wanted to get into VC or L/S Hedge Funds and as you might have guessed I was always laughed out due to a "lack of transferrable skills or work background". I did all I could to take quant certificates and learned how to code and finally broke into IB and never used any of them. I technically didn't even break in because i was referred by a very close friend who worked there. 

I could have done this job fresh from Big 4 audit and I don't see any real reason why banks don't just hire from there in a labour shortage especially when the person had IB internships and has showed interest and maybe just didn't get lucky. 

Today I see a lot of people saying to pick one team or group or the other due to transferable skills to PE or Hedge Funds or VC and now that I am in the door, I can see that its all just a formality to reduce the number of applicants.

I'm pretty sure I could work at any Hedge Fund or PE fund with only my background in Audit but people act like my banking experience is actual proof that I can, not the fact that I studied Finance for 4 years and got stellar grades. 

Bill Ackman (yes that Bill Ackman) has even bragged about hiring random fishermen and taxi drivers to work in Pershing Square but I am meant to believe that a person who works in Corporate Banking, ECM or FP&A would be too out of their depth doing the same thing despite being a Finance or Economics grad from a Semi Target with a 3.5+ GPA.

I'm 100% sure if you take most people with that background who have a genuine interest to any Tiger Cub fund or PE or VC fund they would be able to do the job just as well as the kid who only had BX internships and is an English & Philosophy Major from an Ivy league.

 
Most Helpful
i.can.make.it

Unpopular Opinion: As Long As You Studied Finance You Can Do Nearly Every Role In The Space

This isn't unpopular, it's just plain wrong. You can study riding a bike, but won't know how to perform until you actually do it. Maybe you can only ride a regular bike and can't do tricks or can't mountain bike on crazy trails. You could study for and pass the CFA exams, but that doesn't mean you're going to generate superior returns. There is a divide between those in finance academia and those working real world finance jobs

Go study how to do a backflip. You've seen videos. I'm sure you could do it, because you studied it. Right? No.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
 

Sigh...I hate to do this to Isaiah, but I have to play my name. Hand! I mean hand! Ok that can sound worse. If you study these degrees/topics, you should be (better) prepared to actually tackle in the world. Just because I have an econ degree doesn't make me a J Powell, but I at least understand what's going on and can act accordingly. You are right about having a CFA is not some magical wand that makes you immemorial. But having the education to at least even 1) know what the hell a CFA is, or even then versus a CFP for instance and then 2) know the subject material. 

image-20230317185722-1

The poster formerly known as theAudiophile. Just turned up to 11, like the stereo.
 
i.can.make.it

I understand what you're saying but thats why i gave that Bill Ackman example. Are you saying that a Taxi driver or fisherman has more overlapping skills to do PE than a guy in ECM?

Now you're talking about experience/experience when the title is studying/experience.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
 

That's such a superficial reading of his point. Of course he doesn't mean that once you go to school for something you can just work anywhere in the field, he's saying once you learn the fundamentals of finance you'll be trained up and learn on the job for whatever specific role you have. Obviously not everyone is going to be successful at it, but having worked in one niche aspect of finance isn't necessarily a better indicator of success vs a different niche of finance, fundamentally you understand the concepts of finance and you'll get filled in on the details when you start working. 

 

I would add that moving up in some roles is highly network dependent (e.g., winning deals is based on which CEOs the MD is close with or in PE it's about which investors you know and can raise funds from). These things take decades to build. But for research based roles and analyst roles it's different.

 

I agree but this applies mainly to high IQ people. They can excel at any field they chose. Just memorising stuff for an exam or going to a certain college doesn't necessarily equal smart (but it does highly correlate). However, if you have a superior IQ you will beat out all the middle IQ people in the field you chose.There are many STEM PhDs and Philosophy majors that do well in finance because they have superior mental ability. On the flip side, there are ex finance professionals that went onto start major companies (Peter Thiel, Jeff Bezos) or even became best selling authors (Amor Towels). Not everyone can do this obviously but top 2% of the bell curve can.

 

I agree.

Finance isn't hard, but it's competitive because of its compensation. Because a lot of people apply, you can pick the best profiles from the recruitment pool which will inevitably be people from top schools. Building teams with those types of people builds a false idea to outsiders that it must be a hard job because "look, only the brightest kids can get those jobs" when in reality only the brightest kids will get them because of low barriers to entry and thus a wider number of applications from which the company can pick.

 

i.can.make.it

Sidenote: 

I'm pretty sure I could work at any Hedge Fund or PE fund with only my background in Audit but people act like my banking experience is actual proof that I can, not the fact that I studied Finance for 4 years and got stellar grades. 

Not true at all.

Studying finance in school is borderline worthless beyond the potential edge it might give you in recruiting for that first job. All the basics of finance & accounting can be learned at a reasonable pace in the span of 2-3 months tops, the rest is on the job repetition that develops competence. I say this as someone who started in STEM then transferred to get a finance degree, but looking back wishes I'd just stuck with STEM while doing all the finance learning outside class.

Some audit job, even Big 4, will not provide experience super relevant to any PE or HF front-office role because you're not doing any of your work based off an investor's mentality, you're not building models from the ground up or getting any exposure to a complete deal process, and you're not learning how to source/generate opportunities. You're an expensive bookkeeper validating business transactions and bank balances, that's it. This isn't to say you can't learn the skill you need while you're doing an audit job, in fact one of my fellow former associates came from an Big 4 audit role. Just that the audit job itself isn't giving you anything super relevant to the roles themselves. 

People give credit to the banking job because it gives you exposure to whole deal processes, provides more relevant training/skills, and is just generally considered a more intense environment/signals greater capability vs audit. But I would agree with you that banking itself isn't the best indicator, I didn't do it myself so I can speak from first hand experience that it isn't necessary. Would probably be a lot faster in powerpoint and excel though!

"The obedient always think of themselves as virtuous rather than cowardly" - Robert A. Wilson | "If you don't have any enemies in life you have never stood up for anything" - Winston Churchill | "It's a testament to the sheer belligerence of the profession that people would rather argue about the 'risk-adjusted returns' of using inferior tooth cleaning methods." - kellycriterion
 

Alias inventore tempora expedita. Ad enim laborum quaerat hic. Odit libero cumque eligendi voluptatibus est repellat quaerat.

The poster formerly known as theAudiophile. Just turned up to 11, like the stereo.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
kanon's picture
kanon
98.9
6
DrApeman's picture
DrApeman
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
CompBanker's picture
CompBanker
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”