Frequently Asked Questions

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The simple answer is no. Having the CFA designation on your resume is nice, but it will not make up for poor grades or a lack of extracurricular activities and work experience. If a firm wants you to earn a certain certification, they will usually let you know once you are hired and will usually pick up the cost for you; however, that doesn’t mean you can’t strengthen your value as a candidate by attaining the CFA yourself.

Getting a head start is a nice way to take a little extra load off of yourself once you begin your full-time career, and frankly may be worth the few hundred dollars in the costs you incur. If you're planning a career in asset management, hedge funds, or research, there's a chance that at some point your firm will want you to get your CFA. It never hurts to be ahead of the curve!

The CFA can also be beneficial if you are attending a non-target or aren't working towards a business-related degree. It will show your interest in finance and help round out your story.

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For most accounting positions, obviously attaining a CPA is seen as a big plus to potential employers. Much like the CFA, the CPA designation will not land you a job, but it could make you more competitive.

If you do earn the CPA, employers can be confident that your knowledge of accounting will be sound. The value of attaining a CPA outside of accounting, however, is often called into question for other careers in finance.

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An overview and explanation of the FINRA / NASD certifications was created by WSO super-user Frieds to help out those who are curious.

Seeing as there have been a few recent posts about the NASD/FINRA Licensing exams, I thought it would be prudent to discuss them with you guys, since most of you monkeys looking for full-time employment on the street will need to take them in some way, shape or form.

Very simply, the licensing exams are a necessity across the board for almost everything you do on the Sell-Side. If you work for a broker/dealer or for a firm that inventories their own assets you might need a license. If you’re in sales and trading or do equity research, you will need it. If you’re doing any sort of client interaction, you need it. If you’re in banking, you’ll need it.

While you won’t need most of the exams offered, I’m going to cover the basics of what you will and will not need to know about these before you sit down to take them.

The Essentials: FINRA AND YOU!

FINRA, or The Financial INdustry Regulatory Authority, is the governing body behind all of these exams. They are the successor to the NASD (National Association of Securities Dealers) and are one of the biggest SROs on Wall Street. An SRO, for those that don’t know, is a Self-Regulatory Organization. An SRO acts as a regulating body over an industry; however they do not necessarily derive any of their power from the government or any federal body. They make the rules we follow that are not mandated by the SEC. They also enforce government regulation like Blue Sky Laws, or state registration as it is also known as, and the Investment Advisor Act of 1940. In addition to acting like a regulator, they are also in charge of all of these licensing exams that you might need to take if you work on the sell side. Not all people will be required to take sell side exams, but most will be expected to upon full time employment. Everyone from Investment Bankers, S&T Folk, Portfolio Managers, Equity Research to the Wealth Management guys that most of you monkeys talk down on and even the guys in the Back Office are required to take these exams. I am going to stick with the absolute basics and avoid discussing the “Limited Rep” and Management exams that are required if you plan on only hawking one product or are considered to be a principal or a manager for a desk.

IF YOU ARE AN INTERN, YOU WILL NOT BE REQUIRED TO TAKE THESE EXAMS. Look back a sentence and reread that statement. It’s highlighted for a reason. Again, if you’re an intern, you’re not required to have your licenses. There are a few reasons. First, there is cost and nomination. The exam requires the firm to pay for your costs of registration and the costs to take the exam, as well as the need to sponsor you for most of the exams. Simply put, taking an exam is a commitment by your firm in you for at least 2 years of your life. Plus there are the carrying costs for registration. It’s not just a one and done deal or a onetime fee, as your firm pays to carry your registration on their books. Second, there is the simple fact that unless you are employed by the firm, if you’re an intern and you end up not getting invited back, you walk away ahead and the firm is left with being out money because of you. Finally, as an intern, you will not be doing anything that would require you, by law, to need these licenses. You will not be executing trades. You will not be discussing “things” with clients. You will not have any responsibilities that require the use of these licenses.

Now, on to the important stuff.…

The Series 3: Commodities, Futures and Forex

The Series 3 is the exam required for anyone who wants to trade Commodities, Futures and Forex as an “Associated Person”, “Commodity Trading Adviser”, “Commodity Pool Operator”, “Commodities Broker”, “Futures Trader on a Commission Basis”, or a Forex trader under the jurisdiction of the NFA (National Futures Association). Basically, this is the exam required to trade commodities and futures. You don’t need a firm to sponsor you (Meaning you don’t need to be in their employment in order to take this exam) nor do you need any other exam if this is your sole job. The Series 3 covers material that is exempt from Blue Sky regulation, as both commodities and futures do not fall under this particular type of jurisdiction, however you are still bound by CFTC and NFA Guidelines. The exam has 120 questions and has a two and a half hour time limit.

The Series 7: General Representation

The Series 7 was the de rigueur standard of the day up until the introduction of the Investment Banking exam a few years ago, because almost everyone on the sell side had the Series 7 if they were on the sell-side. This exam is the “General Securities Rep” exam, meaning that once you pass it, you are able to sell all types of financial products. Unless you are required to have the Series 79 or work in an area that does not require the Series 7, you will have to take it. If you pass, it serves as your general registration with FINRA and as a General Securities Rep on the federal level. It effectively allows you to actually interact with clients and sell any security except for life insurance, real estate, commodities and futures. It is important to note that you cannot trade with the Series 7 alone, as you need to have your state registrations as well. The state registrations will be discussed in detail a little further on.

In order to take the Series 7, your firm needs to sponsor you. Traditionally, it’s taken within the first three months of employment, as that is the period, as defined by FINRA, of apprenticeship where you are supposed to learn and take your exams. The exam itself is a 6 hour long exam, comprising of two sections, each 3 hours in length and a break of between 30 minutes and an hour between the two halves. The exam has 250 questions. The two largest portions, Municipal Securities and Options, comprise about 100 questions on the exam. Knowing and acing those questions will only get you so far though. The Series 7 also covers basic regulation, analysis, the markets, KYC/Account and Ops related information and a few other topics. You need a score of 70% or higher to pass this exam.

The Series 7 is still the standard prerequisite exam for just about every major FINRA/NASD exam you will take outside of the Series 3. All of the principal exams, with the exception of the Commodities and Futures Principal – it requires the Series 3 – that you might take further down the line will require you to have the Series 7 license.

The Series 6X: You’re my Blue Sky, You’re my RIA

The Series 6X is an exam with 3 different flavors, the Series 63, the Series 65 and the Series 66. The Series 7 serves as a prerequisite for both the Series 63 and the Series 66. The Series 65, I wouldn’t worry about, but will discuss briefly for completion sake.
The Series 63 is the Blue Sky Laws exam. Passing this exam allows you to be registered at the state level per Blue Sky regulation and enables you to sell securities in whichever state you or your firm, as the case may be, choose to register in. The name of the law comes from the following quote:

The name that is given to the law indicates the evil at which it is aimed, that is, to use the language of a cited case, "speculative schemes which have no more basis than so many feet of 'blue sky'"; or, as stated by counsel in another case, "to stop the sale of stock in fly-by-night concerns, visionary oil wells, distant gold mines and other like fraudulent exploitations." Even if the descriptions be regarded as rhetorical, the existence of evil is indicated, and a belief of its detriment; and we shall not pause to do more than state that the prevention of deception is within the competency of government and that the appreciation of the consequences of it is not open for our review.

This quote is attributed to US Supreme Court Justice Joseph McKenna as part of his opinion on Hall vs. Geiger-Jones Co. (242 U.S. 539 [1917]) despite the fact that he was not the first to use this quote.

As to the exam itself, this exam covers state securities regulation, laws and ethics. It has 60 questions and is 75 minutes long. You need a score of 72% or higher to pass.
The Series 65 is the Registered Investment Advisor exam. This exam is required for money managers, investment advisors and anyone that manages funds on a non-commission basis. While this exam is still around, most of you will not be taking this exam, as your firm will require that you have either the 7/63 or 7/66 if you are in a position that requires those exams. The only exception is if you plan to market yourself as a Registered Investment Advisor, but that’s another post for another day.

The Series 66 combines both the Series 63 and the Series 65. It combines the Blue Sky Laws and Registered Investment Advisor exam into a smaller, 100-question test that allows the candidate who passes to both manage money on a discretionary basis and receive their state registration. This covers everything from the Series 63 as well as Investment Strategy, Investment types and an in-depth look at knowing your client. There is no overlap from the Series 7 material that you would find on the other two exams. In general, all three of the 6X exams are known to be trickier, as it tests how well you know the rules you are being tested on and their uses. The Series 66 is two and a half hours long and requires a passing score of 71% or higher.

The Series 79: The Original Bankster

I will admit, I am least familiar with the Series 79, only because I was exempt from needing to take it, but it’s the licensing exam for all of you wannabe Bankers. If you were lucky enough to be grandfathered in, that’s awesome. If you weren’t, I wouldn’t sweat it. The Series 79 covers just about every IBD and ECM/DCM function there is. Basically, this exam covers two key areas:

  1. Capital Markets Advisory for Debt or Equity securities
  2. Traditional IBD Functions from Advisory Work to Restructuring and everything in between. And yes, your product group under IBD falls under traditional functions. It doesn’t matter whether you’re in FIG, TMT or SSG, you’re still just a sucker who will need to get his Series 79 if you work at a sell-side shop.

This exam, while new, was created as a result of the problems that arose from the latter part of the last decade and is now required if you plan to do IBD. This exam serves as the IBD equivalent of having the Series 7/66 combo. The exam is 175 questions and is five hours long.

The Series 86/87: Learning to Dig Deeper

The Series 86/87 combination is for Equity Research. If you do any sort of ER Work for a sell-side shop, you will need this in some way, shape or form. The Series 7 and 63 are required before you can even be considered to sit for this exam. This has to do with the fact that in order to talk with clients, you need to have the Blue Sky Registration. The exam itself is broken up into two parts, the Series 86, Investment Analysis and Valuation, and the Series 87, Legal Regulation and Best Practices for Equity Research. They cover topics pertinent to exactly what it sounds like in order to make sure that you are at least competent in how you perform your valuations and are more than capable of being able to understand the basic regulatory framework. Seeing as these are a combination exam, you are required to pass the 86 before you can sit for the 87 even though they directly related. The Series 86 has 100 questions and a four hour time limit. The Series 87 has 50 questions with a 90 minute time limit.

Here’s an interesting fact for anyone doing Equity Research. If you have passed your CFA Level 1 and Level 2 exams, you can use that in lieu of taking the Series 86 exam due to the high degree of overlap between the two exams. It’s just something worth noting…

The Series 55: Equity is a Bitch

The Series 55, the last exam we will be discussing, is Equity Trading Desk exam. If you plan to be an equity trader or trade in convertible debt securities on a trading desk, you need to take this exam on top of its prerequisites, the Series 7 and the Series 63. This exam covers a slew of topics including the markets themselves, trading practices for different markets and different types of securities, rules and regulations and electronic trading, all things you need to know if you work on an Equities Trading Desk. The exam is 3 hours long and has 100 questions. You need a 70% or higher to pass.

Some Last Minute Thoughts and Advice

Just so you are aware, the major shops will pay for the exams if you are required to take them. However, there are other shops, particularly some of the shadier ones, which will make you pay for the registration costs. Although I hate my former roommate, I know he had to pay his registration costs out of pocket so this way if he failed, his employer was not the cash for registration. So be careful if you’re going to shop with a less than reputable reputation.

Before you go and ask about prep time and all those other fun questions, let me leave you with a bit of advice. It sucks having to take any of these exams more than once. Overkill, while more time consuming, is better than being under-prepared. I know of firms that have a one and done policy for the Series 7, where passing it must be done on the first attempt or you’re fired. This isn’t necessarily the case for other exams, but I have seen cases where people have failed the Series 66 multiple times and have been given ultimatums where they are gone if they fail it again. Just so you are aware, your firm will pay for study materials for you to use and possibly a class along with it. My advice for all of these exams is to take all of the practice exams until you’re comfortably scoring in the high 80s and you should be able to pass them without much difficulty.

As always Monkeys, fire away with questions if you have them.

Starting Your Career

For full-time, yes it does. Working in an industry group will give you access to exit opportunities in that industry and related industries. For example, most analysts targeting private equity after their investment banking analyst stint will try to be placed in the Sponsors Group or Leveraged Buyout group since the MDs in those groups are in direct contact with PE partners.

Networking is a very important part of group placement, and you should have plenty of opportunities to network across your firm. However, a top analyst in a top group at a well-known bank will undoubtedly have his or her pick of post-analyst jobs (assuming they have the interviewing skills/fit the culture).

It's also important to remember that as an IB analyst, you will be in this group for two years. If you get placed with a group that you absolutely despise, this will have a negative impact on your time at that firm. It's important to target industries that you're interested in, learn about them, and show the people interviewing you that you would fit well with them to avoid getting placed into a group with weaker exit opportunities.

Group placement is not as important for internships, mostly because you're trying to gain some experience and learn the trade, as well as add overall finance experience to your resume. You can always apply for a different group or express interest in another group come full-time recruiting.

However, this does assume you don't receive a full time offer straight out of your summer analyst internship. If that is the case, in order not to burn bridges, or lose the offer, you may have to take the group placement and live with it. If you have networked and established relationships across groups, this is where those relationships can be extremely valuable. If you have a strong relationship with an Associate or VP in another group, you can reach out for advice on how to approach switching groups at your firm and to potentially be recruited by another more desirable group.

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On WSO, we get a lot of questions from professionals in the middle or back office positions of a financial services group that are trying to get to the client facing / front office positions at that firm (like M&A in IB). While this transition is possible, it is exceedingly rare and usually takes several years of networking and persistence.

The reason is that the front office positions have an extremely structured recruiting process (OCR) and there is usually no reason to promote a non-traditional candidate internally unless they come highly recommended. It is also difficult for your boss to recommend you for front office positions when they want to keep you.

Again, this is where networking across divisions within your firm early and often can pay off. If you want to be the exception, you will have to be an extrovert and demonstrate not only the technical capability, but also the soft skills to navigate this rare transition.

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Building Relationships

No, you don't have to do anything you don't want to...SHOULD you continue to network? Absolutely.

Try to help undergraduates just like people helped you. Try to reach out across groups, across banks and continue to build a strong foundation that can help you get a new job should you suddenly lose your current one. When you only try to network when you need something, you'll soon find that there are less people around when you need that help.

If you build meaningful relationships and network as a way to continue learning, you are significantly more likely to have more options and more success throughout your career.

Learn to enjoy networking and embrace it. You will thank us in 10 years. Remember, networking is as much about what you can offer, not just about what you can get out of an interaction.

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In order to build a good relationship with your superiors, you should first try to establish trust by delivering consistently high work quality. If you are triple checking all of your work, it is a good way to make sure there are no simple mistakes which can quickly hurt the trust-building process.

Throughout your time doing work with your superior, you should still try to establish more of a personal relationship. Try to learn about their kids, what is important to them and what their goals are. This will help you create the inevitable small talk and build rapport.

Just like with your co-workers, you should also never pass up an opportunity to eat lunch or go out for coffee with your superiors.

Once a good relationship is established, you can also approach them once every 3-4 months to ask for candid feedback on how to improve and to get a status update on how they think you are performing. However, be careful not to do this too frequently or it could get annoying.

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WSO Humor / What Not to Do

Welcome to WallStreetOasis's collection of funny threads, we think you'll have a hearty laugh at what's found here.

Disclaimer: WSO does not wish to make fun of any person and welcomes questions of all kinds. By posting your thread to the humor section, we merely thought the responses were hilarious, and encourage you to ask more questions!

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Here we have a young man who is greatly enjoying his time working for an investment bank. He's got a Porsche, goes to hot clubs, hangs with some (kinda, I guess) hot models, and doesn't mind blowing a bunch of cash. Is there a problem with that? Not at all. Should someone broadcast their extravagant lifestyle choices on television for the world to see when you haven't made Managing Director/Partner? Probably not. Should you do this while the financial sector is going through one of the worst periods in history? (Exercise 1: Insert best possible guess here.)

As you can see from those threads, not only is the "models and bottles" lifestyle not really applicable to analysts (or even many associates, for that matter), you're going to look like an asshat to most of your coworkers. On top of that, flaunting your "success" could get your ass kicked to the curb. Your firm has an image to uphold, so do your job and don't tarnish it's reputation.

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This one is pretty simple. Operations handles a lot of the back-end work for you, so getting on their good side is in your best interest. Similarly, during the recruiting process if you get in good with human resources they can make your life very comfortable. However, for both departments, doing the opposite can have devastating effects. If you are a college student, please, please, please, please don't be rude to HR, much less pushy and demanding. Is it okay to let them know about your limitations on travel times? Yes. If you get put up in a 1-star hotel, should you say something? Yes. Should you demand to be put up at the Four Seasons for all else is beneath you? Eh, that probably won't go over so well. In fact, we know it won't go over well.

So, there's probably a couple of things we can take away from this. First, don't be a jerk to HR. They're already working their asses off, pouring through thousands of applications. They may screw up here and there, but you're trying to get a job so suck it up unless they've truly made an error (not getting booked at the Four Seasons most definitely does not count).

The second thing you have to take away from this is, NEVER, NEVER, NEVER lie about having an offer, or about anything for that matter, on your resume (if you're worried about this, check out the FAQs Getting A Job section for some direction). Sometimes you will have to embellish your experience a bit, but you should never tell them an outright lie. The last thing we feel the need to mention: work on your social skills. If any of the things mentioned to this point sounded like a good idea, it's time to take a class in ethics.

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It is definitely important to show you are a qualified candidate... but what does that really mean? Well, for one you want to show you're well-rounded. A strong GPA, an applicable major, an internship or two, and a couple extracurriculars would make a well-rounded candidate. There is apparently, however, a way to be too good of a candidate. Should you let your recruiters know you have a 4.0 GPA? Definitely. That you had an SA at Goldman as a Sophomore? Yep. That you bench pressed a Mini Cooper, beat Pete Sampras multiple times in tennis, ran a marathon in 10.72 seconds, and walked on the moon? Probably not. Unless you're Chuck Norris.

There's probably not much else that needs to be said about this. A little fib here or there is one thing, plagiarizing, lying on your application, and misrepresenting everything about yourself is not okay.

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Lifestyle & Exit Ops

Money is, without a doubt, one of the biggest motivators for having a career on Wall Street. Every year thousands of college graduates are lured to the industry by promises of hefty paychecks and the possibility of becoming the next Gordon Gekko. This begs the question, “How much do you really make on the Street?”

There is no easy answer to this question as the pay scale varies greatly between industries, career levels, the state of the economy, and the employer. Despite this, there is still some solid, general information available to give you a good idea of how much you can make in each industry. WSO has put together a rough outline of the compensation one can expect across a number of different careers in finance. Please keep in mind that these are by no means on-the-dot accurate numbers, but rather to give you a general overview of what you may expect.

It is also important to keep in mind that as you move up in your career, the numbers become far more unpredictable. An MD working for Goldman Sachs’ Technology, Media, & Telecom division might be pulling in a $500,000 salary with a year-end performance bonus of $10,000,000, whereas an MD at a smaller, regional investment bank may have a salary of $500,000 with a year-end performance bonus of $500,000. What makes the disparity in these numbers even more interesting is that they could be switched around, with a regional MD pulling in seven-figure bonuses and a bulge bracket MD pulling in a more modest six-figure bonus. For more information, please check out our Compensation Database or do a search for compensation using WSO's Search function.

investment banking compensation
This page illustrates the wide range investment bankers can make across different seniority levels including analyst, associate, vice president and managing director compensation. Given the fact that such a large percentage of their compensation is tied to the investment banking bonus, the pay investment bankers receieve each year is highly volatile and depends on a variety of factors including the economy, the overall performance of the firm, the performance of their group and last but not least their individual performance.

private equity compensation
This page illustrates the wide range private equity professionals can make across different seniority levels including pre-mba associates, vice presidents, managing director and partner compensation. Given the fact that such a large percentage of their compensation is tied to a firm's carried interest, the pay PE professionals receive each year is highly volatile and depends on a variety of factors including the economy and the overall performance of the fund.

Venture Capital Compensation
This page illustrates the wide range VC professionals earn across different seniority levels including analysts, associates, vice presidents, junior managing directors and partners. Given the fact that such a large percentage of their compensation is tied to a firm's carried interest, the pay VC professionals earn each year is highly volatile and depends on a variety of factors including the economy and the overall performance of the fund.

Sales & Trading Compensation
This page illustrates the wide range S&T professionals earn across different seniority levels including analysts, associates, vice presidents, managing directors and partners. Given the fact that such a large percentage of their compensation is tied to their bonus, the pay S&T professionals earn each year is highly volatile and depends on a variety of factors including the economy, their individual performance (as measured by their P&L) and the overall performance of their division and company.

Management Consulting Compensation
This page illustrates the wide range consulting professionals earn across different seniority levels including analysts, associates, vice presidents, managing directors and partners. At the junior levels, most of the pay is in the form of salary and a relatively small bonus. At the more senior levels, a larger percentage of the compensation is tied to billable hours and clients engaged.

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There are a number of perks that come with a job in finance. They do, however, vary greatly from industry to industry and firm to firm. The list below is by no means comprehensive, but to give you a better idea of what the perks are for a couple of the industries.

Investment Banking Analyst

  • Free car service home after a certain hour
  • Free dinner and/or other meals if you're in the office for a certain amount of time or past a certain hour
  • Discounts on financial services (checking accounts, savings accounts, credit cards, etc) in addition to the standard services (401k contributions, health coverage, etc)
  • On-site gym, childcare, or cafeteria

Management Consultant

  • Large amounts of frequent flyer miles, eventually enough to earn special designations by airlines, depending on the firm
  • Large numbers of rewards points, depending on the firm
  • 401k contributions, health coverage, and other standard services

This is just to give you a general idea of what the perks of your job may include. For industries that don't work as long of hours or travel as much, the perks may be less, but there will undoubtedly still be some little things the firms do to make your lives easier. Also, keep in mind that at a small or newer financial services firm or consultancy, the perks may not be nearly as good as they may not be able to afford them. For a better idea of what firms offer, see the Relevant Discussions on Wall Street Oasis below.

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Our Company Database now has thousands of compensation data points organized by Company and position. In 2013 we will also be providing an extensive compensation report as part of the Company Database that will compile, slice and dice the data in as many ways as you can imagine.

Feel free to search away and please help us build the database by filling in some data points yourself!

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Investment bankers are, essentially, middlemen. Bankers connect the sellers of a company with a buyer and advise them through the deal process. Your responsibilities as a junior member of the deal team will mainly revolve around creating pitch books and financial models. You will occasionally have the opportunity to interact with clients, but this is often limited at the analyst and associate levels. As you progress in your career, your responsibilities will change in this respect. As a more senior member of a deal team you will find yourself interacting with clients more often. Investment banking, at the highest levels, often revolves around the relationships between senior bankers and the management teams of corporations.

Here are some quotes taken from WSO’s guide, "A Look Behind the Wall":

Each deal team has an MD, Director/Senior VP (different terms at different banks), VP, Associate and Analyst; sometimes it's just an MD, VP, Associate and Analyst and on small deals it might just be a MD, VP and Analyst or MD, Associate and Analyst.

The MD doesn't do much beyond the initial deal sourcing. The most senior person on the team "runs" the deal, reviews all materials, speaks with the client and contacts the buyers if it's a sellside M&A deal.

Standard work style: Analyst creates first draft of presentation or analysis and shows it to Associate. Associate comes back with changes. Analyst makes changes and shows it to Associate again. Associate comes back with more changes, Analyst makes them and then VP sees it and makes changes. Associate/Analyst make changes, VP reviews again and makes more changes, Associate/Analyst make changes, then MD reviews and suggests changes and Associate/Analyst make changes. Rinse and repeat.

And here is an example of a day as an analyst:

  • 9:00 AM – No fire drills today, so I get to the office at a normal time. The morning is fairly slow; I'm mostly just making further revisions to the presentation and Offering Memorandum for Client A from yesterday.
    A fire drill is an emergency where the Analyst has to produce something under a very tight deadline (30 minutes to an hour). It's usually client-related and often turns out to be pointless after the fact.
  • 12:00 PM – Multiple requests from different MDs at the same time. One of them wants to see an analysis of some deal-related documents that Client B and the buyer are exchanging.
  • 3:00 PM – Have to run a Premiums Analysis for another potential client, which I'll refer to as Company ARGH because dealing with them is so painful.
    A Premiums Analysis lists all public deals in a certain market (for example, mid-stream oil companies) in a certain deal size range (over $5 billion) in a given time period (since 2006) and establishes the median 1-day, 20-day, 30-day, 60-day (and sometimes even more) premium paid to each seller's share price so that the company in question knows what to expect. The average is usually in the 15-35% range; a company will rarely sell for only 5-10% above its current share price.
  • 6:00 PM – Analysis takes much longer than expected. Onto making revisions to Client C's model since they have once again sent over a flood of additional information throughout the day.
  • 10:00 PM – Finish up work there and discuss ongoing efforts on presentation for Client A with
    Associate. It's only Tuesday and I'm already tired of this week, so I finish up quickly.
  • 1:00 AM – Go home. Changes took longer than expected. That happens a lot in banking.
  • 2:00 AM – Foolishly decide to go work out despite being extremely tired. Thank goodness for 24/7 gyms.
  • 3:00 AM – Get back, even more tired. Write a quick post on Mergers & Inquisitions.
  • 5:00 AM – Pass out and sleep for a few hours.

WSO also offers an original guide to some of the careers on Wall Street, A Look Behind the Wall: An Overview of Six Wall Street Career Paths. This guide will give you a more in-depth view into the traits necessary for breaking into and maintaining a successful career in investment banking, private equity, venture capital, private wealth management, hedge funds, and management consulting. While this guide does not purport to have all the answers, each one of the contributors offers a unique, candid, and personal view of the lifestyles, compensation, and exit opportunities afforded by the careers they have had the opportunity to work in.

Related Discussions on Wall Street Oasis:

-What type of work do first and second year analysts do?
-Day in a life as an analyst
-What do you do at your iBanking job?
-The life of an analyst

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Making the move to the buy-side is often a goal of investment banking analysts, as well as a dream for many undergraduate students. Because there are so many different types of hedge funds and jobs within those HFs, there is no "standard" day. Our goal at WSO is to give you as good of an idea as possible, so we will update this as we come upon more information.

Long/Short Equity - 2nd Year Equity Research Analyst (by WSO user KevinNYC)

  • 5:45 am: Wake up! Turn on the TV and watch CNBC for 20 minutes before I roll out of bed. Check to see what news has hit the tape: Asia and Europe markets, macro-economic indicators, and futures markets. While I am very intrigued by the overall market, the market structure of my fund requires complete hedging so I only isolate events which will affect my universe of stocks. Today, same store sales data is released. I take note of the retail chains with technology exposure.
  • 6:30 am: Head out for the morning commute. Bring sell-side research papers back to work that I brought home last night to read. I need to call the Goldman Sachs analyst to figure out assumptions used in his Intel model.
  • 7:00 am: Arrive at my desk. Open up Bloomberg, Outlook, and Position Monitor. Quickly check our current positions to make sure there was no substantial overnight move. Skim through the 75 emails I received since yesterday. Every morning at 8:00 am we have a morning meeting with the entire technology team. I need to send an email out highlighting any sell-side or company specific information that was released relating to my universe of stocks. Luckily, most important information is sent directly to me by the sell-side sales reps, investor relations at the respective companies, and Bloomberg alerts -- how did this business work before email?
  • 8:00 am: Attend meeting. Talk about some important notes that were published this morning. For example, the Morgan Stanley analyst has found out through Asian channel checks that Apple has ordered enough supplies to produce 13 million more iPhones for this calendar year, 2 million more than was previously estimated. While I don’t cover Apple, my universe includes semiconductor companies that sell to Apple. I am excited to update one of my models because we are long a significant supplier to the IPhone.
  • 8:30 am: Stare at market. Bells kick off and I spend the next 10 minutes watching the
    market adjust to the new day while simultaneously watch our positions. Good start to the day, we have already made $70K!
  • 8:40 am: Organize my calendar for the day. I have a management meeting, a call with the Goldman analyst regarding Intel, and two companies reporting after the market.
  • 9:00 am: Gather questions. I have a management meeting today at our office and so I am responsible for forming questions to ask the management team. I read through my notes from the previous earnings conference call, skim over my financial model, and figure out what the sell-side thinks by reading through research reports.
  • 10:30 am: Attend meeting. I throw on my suit jacket and head up to the meeting with my analyst. I hand over a copy of the questions to my analyst, which he combines with some questions of his own. I greet the CFO and IR Director whom I have met at a previous conference. The meeting begins and the analyst and I start digging in.
  • 11:30 am: Update model. Using the information obtained from the meeting, I update our model. I dash into my manager’s office with a smile on my face and tell him we need to short more of the company. I tell him what has changed after the meeting and explain how it further justifies our thesis. He agrees and we discuss a long-side hedge to remain market neutral. Finally, after a lengthy discussion, we enter our new trades and update the portfolio.
  • 1:00 pm: Call with Goldman. My goal is determine what assumptions the Goldman analyst is using and how he chose them. After a lengthy debate, I come to the conclusion that the analyst has no great reasons to downgrade Intel except for the fact that he didn’t have enough stocks in his “underweight” category. I quickly tell my manager about the call and explain that the stock is trading lower on account of this research report. He agrees and we buy some stock on the recent dip.
  • 3:00 pm: Send out earnings previews. The market closes and we end $2M up on the day. For the last hour, I spend my time writing up earnings previews for the stocks reporting after the close. The earnings preview is a brief summary of our thesis, our current positions, and what we think the company will print.
  • 4:00 pm: Listen to calls. I need to listen to 2 calls in the next hour.
  • 6:00 pm: Send out earnings review. I send out my notes from the call and recommend some tweaks to our positions. I am pretty happy with the outcome despite having mixed prints. We were right on our long position, and it is up 6% after-market, however despite our short printing in-line, managements’ outlook was better than expected. The upbeat guidance has pushed the stock towards a 5% after-market gain. In summary, a pretty good earnings day resulting in a net $1M profit on the pair trade.
  • 7:00 pm: Leave! What a busy day, I barely had time to get up from my desk to go to the bathroom! I pack up some reports I didn’t get a chance to read during the day and take my laptop with me. I look at my schedule. Next week involves insane travel: Las Vegas for an industry conference, Phoenix to visit fabrication plants, Silicon Valley to meet with ten companies, and finally San Francisco for a sell-side technology conference before I head home. One day at a time; off to the gym.
  • Event Driven Strategies - 3rd+ year Analyst (by WSO Certified User Mr. Pink Money)

    • 6:45am - Wake up
    • 7:30am - In the office
    • 7:30am to 8:30am - Breakfast, Check inbox/messages, Read paper/blogs/etc., morning meetings
    • 8:30am to 1:30pm - Depending on the day, read transcripts/filings (30% of time), investment meetings/calls (20% of time), build models (40% of time), investment memos/emails (10% of time). This is a juggling act since I'm usually working on 1-2 new ideas and 2-3 portfolio positions during the week.
    • 1:30pm - 2:30pm - Lunch/Pay Bills/ESPN
    • 2:30pm - 8:30pm - Meet with PM (ranging from 30 minutes for brief updates to 3 hours for research findings) and more modeling/reading/conference calls rest of the day
    • 8:30pm - Midnight - Go home, dinner, gym, read paper/blogs/etc., read more filings
    • Sometime between Midnight - 1:00am - Bed

    I'm not lying when I tell people I am a professional footnote reader. A typical year as an investment professional:

    • First quarter of the year can be pretty busy as many funds tend to put more/new money to work and companies begin to hold analyst days, etc. Combine that with earnings season in late January and I easily end up putting in 12-16 hours over the weekend.
    • Moving into middle of the year, things definitely slow down a bit over the summer and I only work mornings (8am to noon) as needed during the weekend.
    • The end of the year is Jekyll and Hyde. Hours are usually manageable, but I've had some of my worst weekends in October/November.

    Global Macro Trader - Partner (by WSO Certified User Bondarb)

    • 545am Get to work, print up and read overnight research pieces both from internal analysts and from the sell-side. Check in with traders in London for color on the overnight session.
    • 830am If its a Monday my group has a group meeting where we go over the calendar for the week, talk about new trade ideas, and discuss management of the positions we already have on. We also do meetings like this in front of big events such as central bank meetings and payroll reports to go over our thoughts and strategies ahead of these events.
    • 930am-430p Read research, watch markets, do trades if appropriate, talk to sell-side analysts and traders, talk to coworkers about markets, go over charts, work on my own creations (model-type things). Sometimes go to meetings with economists and traders from sell-side who come into our office.
    • 430p leave call levels with our internal nightdesk and go home.
    • 5-9p Go do something social
    • 9p log into my computer from home and check on overseas markets. chat online with our internal nightdesk and with sell-side guys in Australia, New Zealand, Tokyo, etc. This is what i'm doing now.
    • 10p go to sleep
    • 2am get call from nightdesk...something happened overseas and a position is running badly against me. Drag myself back to my computer, log in, and see whats happening. decide to do nothing. i can still get 2 hours of sleep if i go back to bed. This happens about 20% of nights.
    • 545am do it again!

    This is not to say you can't get a general idea of life for a hedge fund analyst from it. Certain types of funds will weigh heavier on certain areas. An equity research associate will probably spend more time on filings, an analyst at a quant fund will probably spend more time working on coding, and a global macro analyst may spend more time on current events.

    WSO also offers an original guide to some of the careers on Wall Street, A Look Behind the Wall: An Overview of Six Wall Street Career Paths. This guide will give you a more in-depth view into the traits necessary for breaking into and maintaining a successful career in investment banking, private equity, venture capital, private wealth management, hedge funds, and management consulting. While this guide does not purport to have all the answers, each one of the contributors offers a unique, candid, and personal view of the lifestyles, compensation, and exit opportunities afforded by the careers they have had the opportunity to work in.

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