Moving from Accounting to Investment Banking

Hi everyone,

I am currently working as a trainee accountant in London at a mid-tier firm, have a high 2.1 degree (non-financial) from a top 40 UK university (not a Red Brick) and less than 300 UCAS points. As you can see, my academic results are nothing special.

However, I am very much interested, once qualified (ACA), in working for an investment bank (front office role) with the end goal of working for a hedge fund. I am currently on track to pass all of my ACA exams first time, and am considering taking the CFA level 1 once I am qualified too, as well as currently educating myself in the world of investing etc. in my spare time.

Essentially I would just like to know if this is at all a possibility? I know that I am far from an ideal candidate, but will being ACA qualified plus passing CFA level 1 and investing knowledge be enough to get my foot in the door? If not, is there anything else I could do to improve my prospects?

Just interested to know what people think. Many thanks in advance.

 

I joined a few months after I graduated on a graduate trainee scheme. To be honest I don't find accounting that enjoyable, which is why I'd like to move to something I'm more interested in after I qualify. If you're looking at accountancy though I would definitely try to get into the Big 4. You'll deal with much much larger clients than at a mid-tier, plus having gained qualification there you'll become a very attractive candidate to employ!

 

Obviously nothing is impossible and Big 4 audit to IBD is doable but the combination of mid-tier accountancy firm, low tier uni and low A Level grades means it would be a real uphill slog. Maybe you could try lateral to a Big 4 audit function, then move to their corporate finance arm, then go from there? Alternatively once you qualify you might be able to move to a very small lower-lower-mid market M&A shop?

 

Thanks for your response. I was thinking about trying to get into one of the Big 4...do you know if they only accept those who are qualified/part-qualified, or can someone currently training but not yet part-qualified apply? Maybe that would be the best way to go just to get a big name on my CV.

 

I summered at a MM IB in London which hires a lot of recently qualified ACAs for their Associate roles. All were in Big 4 corporate finance or Transactions services with strong education profiles. It'll definitely be an up hill battle for you. I'd say your best bet is to qualify, lateral to a Big 4 firm after qualifying, and then try to ultimately end up in one of their CF / TS groups.

 

I'm in the process of completing the CPA exams, which I plan on obtaining before making a move. I have a Bachelors and Masters in Accounting from top schools. Completed 2 years at Big 4 Accounting firm (external audit) and have been working for the past year in Internal Audit at a financial services company. Is a successful transition to PE/IB possible and do you have any advice/recommendations for doing so? THANK YOU!

 
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Best Response

I am currently at an MM, and before joining here I spent a year at a big 4 firm taking the first 8 of the ACA exams whilst realising it wasn't at all what I wanted to achieve.

I ended up going back to the education route, attending a target school and getting in that way, but this probably isn't an option for you at this stage?

What you do have in your favour is that the ACA is a good qualification and it does give you a solid understanding which will help on the technical side of things. I'm guessing you're not in the CF team at your place and that the transition across to that team internally isn't easy?

In London particularly, there are a number of advisory boutiques which 'specialise' in employing former accountants, so my guess would be that you would be best focussing there. Of my colleagues and those I look at in bigger banks, very very few hold the ACA, whereas it seems to be a requirement at the boutiques which favour accountants.

It's not easy and you'll need to network well and also really demonstrate your interests and motivations, but if you find the right firm it should be possible. I would however say that you would be best off not wasting your time in applying to BBs.

 

I'm not in a position to offer advice, but I'm in for other's responses.

Is your internship in audit? and if you don't mind, what is the pay? I'll be attending a "public ivy" MAcc program next year, and I'm considering potential busy season internship in NYC but I'm hesitant because of the COL and lower pay in audit. Thanks

 

Yeah so here is a little information about my internship, and some stuff that i have learned about a career in public accounting since.

My internship is relatively new and for the undergraduate level in a very niche area of Tax. Its kinda odd that I landed it considering that I have only taken one intro to accounting course, but I think they were more concerned with finding kids who where highly motivated and could learn quickly.

In terms of compensation it pays roughly 5k a month and had a decent signing bonus. This is enough for me to get by living in NYC, but my accommodations are meager and still take up close to half of my before tax pay. So I hope to ball on a budget.

From doing some pretty extensive research and talking to numerous individuals in the profession it is clear that you should do a MAC if you definitely want a career in public accounting. People who do a MAC program seem to 99% of the time start out in either assurance or tax and have to stay in that area for 2 to 3 years before switching. So its very rare to start out in TAS or another specialty area.

Interestingly enough, at the time of my offer I was working on a human capital project where I had to perform a DCF of my lifetime career earnings to estimate the return on my educational investment. I found out that the during the first ten years of my career at a big 4 firm in NYC the return on my investment was not that impressive (it was not significantly larger than the average earnings of just a college graduate). However, once one moves into the upper levels management or gets to the partner level the payout drastically increases. Of course, I was assuming that I had a highly successful career as a CPA and I used a lower discount rate.

All that said I think a role in audit or tax will be great training for any career, and salaries could be drastically better if you decide to exit and go into a industry role.

Hope this helps

 

Accounting can be a route to IB. Just 6 months ago; I attended to JP Morgan's networking event. I was talking to one of the department from Custody; this guy was senior head of the department (with massive head). I asked him how did he break into IB, he told me he had an accounting and finance degree and completed his ACCA and got a job at JP Morgan(of course it does not mean having a ACCA degree got him a instantly, it might have taken him a few years to get into JP Morgan). After talking to him he made me think that even with Accounting and Finance there is a possibility to get into IB. However to answer your question, I really do not know if you can get into IB with accounting degree, it all sort of depends, who you are, what degree you got. But I see people with different faculty like Arts and History and English Literature who working in Banking sector. Do not just rely on your degree (there are lot of factors that you need to take into account before even thinking about getting into IB) one of them is which university are you at.

I hope I haven't destoryed your deepest conviction(All the best)

“It is our fate to be tormented with large and small dilemmas as we daily wind our way through the risky, fractious world that gave us birth” Edward O. Wilson.
 

I'm heading into my sophmore year credit wise. I was accepted as a transfer to one ivy, NYU and Binghamton. I'm attending Binghamton. That decision was primarily based on it being the cheapest and having the 2nd ranked undergraduate program in accounting.

I have been seriously considering a Masters in Finance as well as attaining my CPA. I think that would show a range of versatility that is not common. I am not one of these kids posting with the dream of being a MD at GS before i'm 30. I want to make a very healthy living, I want to send my mother and father on all those trips they talk about but have never been able to afford. Investment banking will enable me to do that.

What I hoped to figure out, or at least get an idea of, is the best approach for how to go ahead starting with an undergraduate accounting degree. I appreciate both posts thus far!

 

Don't waste time on the CPA. Start networking your area today. Look up cold calling techniques on this site. Essentially call and ask to speak to somebody about a summer internship. When they pick up, say "My name is X. I'm studying accounting at Binghamton and wanted to know how I can best position myself for an internship at your firm." Go from there. Get an internship this summer. Join a finance club and begin networking for junior IBD SA positions in the fall. Keep at it and you'll find yourself in IB as long as you keep your grades ~3.7.

 

Get the rosenbaum and pearl book and read that very thoroughly. I echo the sentiments of others and believe you should read monkey business over accidental investment banker--especially since you will be coming in as an associate.

with regards to your question, you have to cover all your bases and apply/interview at every bank you possibly can. Specializing wont necessarily help you because at the end of the day it's a numbers game, and you will find the BB IB interview process is a lot more random than you may think. it's imperative to cast a wide net and hope for the best. And there's nothing that will stop you from getting extremely prepared for every interview you have, even if you have interviews at 10+ banks. If you do run into the problem of having "too many" interviews to prepare for, you've run into the best possible problem to have.

 

This is not an answer to your question, but hopefully you will find it helpful: There are 2 financial markets classes you must take at the Johnson school, even though you are interested in IB - 1) Mark Zurack's Derivative Securities (former GS partner, received nearly $100mm in options the day GS went public), and 2) Richard Marin's "Alpha" series on the hedge fund industry (former CEO of Bear Stearns Asset Management Division). I've met many Johnson school professors as an undergrad, but these guys are unforgettable characters and extremely intelligent.

Also, this may sound strange, but come to the undergrad info sessions and network. I was amazed that I met no MBAs during the info sessions, though I ran into MFEs and other grads. The simple fact at Cornell is that the undergrad info sessions draw more attention from the bulge bracket firms. I always got more contacts from info sessions than the guys I know at the Johnson school, simply because the numbers are greater for the undergrad sessions. Hit up both presentations, and you'll have an impressive network of resources.

 

Thanks gamma! I'd actually heard something similar from one of the second years at destination Johnson. I have heard that there are many more undergrad Cornell peeps on wall street than Johnson students, so I will definitely not shy away from connecting with the undergrads and going to their info sessions. I'll make sure to check out those courses as well if they aren't already required for ib path (my initial app essays were geared towards hedge funds and how I can use them as a vehicle for change, blah blah, so I'm definitely interested in that but I figured I'd get my feet wet with ib first).

 

If you want it, go get it. People break in from every background possible.

I'm on the pursuit of happiness and I know everything that shine ain't always gonna be gold. I'll be fine once I get it
 

Dude I have heard Big4 accountants make the transition in to IB. I think it will be more difficult from corporate accounting role. Also most of the people who made the jump were pre MBA. People usually have MBA as a back up plan for getting in to IB.

Best advice for you would be to network. I would probably set your sight on boutique banks around the area where you live.

If you want to get in to a corporate development role, you will need to network with people in that group. Turn over in those groups is usually low, also they will favor someone who has more experience in the company. So gets some general FP&A experience first, then move to investors relations FP&A role. The investors relation group has high interaction with the corporate development group. Then from there you should be able to make the transition. In corporate finance I think investor relation and corporate development groups are the most sought out groups. So I don't think it is realistic to think that you will be able to make the jump in couple months, I think it might take you about 1-3 years before you will be able to make the jump.

Good luck bro, let us know how things turn out.

 

Thanks for the replies....the corporate development is located in the same building I will be working in and this company is (one of the largest tech companies in the world), has a very solid corporate development group. Would it be wise to take this job anyway and put my hopes on landing a connection (since I'll be in the same building), and using that connection to get into the corporate development department. And as I mentioned earlier, I will be working on obtaining my CFA while I'm doing all of that.

 

honestly, same building kind of crap never works out.

ok I admit it is possible but maybe less than 1% people made it. It is usually easier to break in to a different business group from recruiting instead of internal transfer, because at least you can make some really good story and pretend to do more awesome work as an outsider. And if you can network to get internal transfer, you probably can spend half of time/energy on networking now to get the job you want.

theraflu:
Thanks for the replies....the corporate development is located in the same building I will be working in and this company is (one of the largest tech companies in the world), has a very solid corporate development group. Would it be wise to take this job anyway and put my hopes on landing a connection (since I'll be in the same building), and using that connection to get into the corporate development department. And as I mentioned earlier, I will be working on obtaining my CFA while I'm doing all of that.
 

My suggestion is if your goal is IB than you need to transition ASAP. The longer you linger in accounting the tougher it is to switch out. Do your CFA level 1, don't waste your time on the CPA exams, and make it as clear as you can to recruiters that IB is where you want to work. Your first year in IB is just grunt work anyways so you don't need to worry about "transferable skills" as long as you are proficient with Microsoft Office products.

 

If you are only a freshman you have lots of time to re-position yourself for IB! As for working full time as an accountant while studying part time being looked down upon by IB recruiters, I can't answer that as I am not too sure, why not reach out to someone in industry who might know? But yes the accounting route is generally looked down upon by investment bankers.

 

It's not hard to do if you get a good PE / HF interviewing streak going. It's just hard to do in terms of managing your seniors expectations and attempting not to piss people off in your group.

I know several guys at my office that got top PE offers and were given the option to negotiate an early start. They realized the amount of goodwill it would be destroying and decided against it.

 

i dont know how it works in the us but in the uk going from a big 4 to IB is definitely possible even without a masters (if you went to a good university - it doesnt have to be oxbridge). actually i have seen some moves from big 4 to the buyside lately as well. the accounting qualification is highly regarded in the uk and if you can bring industry knowledge and personality to the table then you should be fine.

real life case:

the guy went to a russell group university (so uk top 20 id say) and worked at a big 4 for 5 years. 2 years in audit assurance & advisory and 3 years in corporate finance m&a advisory. he got his aca qualification and made it into a top tmt boutique. he had to start out as an analyst though... note: this guy is a modelling boss and is just as good as (if not better) his peers who came from top BBs. bear in mind that it took him 5 years to get to that level and not 2.

 

As mentioned above, it is a very difficult move in the US. Not too knowledgeable about UK. Even the move from Audit->TS can take a few years as Big4 normally want you to do 2-3 years in Audit before moving over to TS.

 

Know it's possible in Australia. Heard a story about someone who did a co-op at a big 4 (I believe that's what they call it when you work FT and study part-time) who got a bunch of IB interviews. Also know of bankers who started in big 4. That being said, I don't know if it would be any easier. This info is true but a very small sample size, so don't let something like this make up your mind- do more research.

 

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