Stuff Investment Bankers Don’t Like: The CFA, Your Activities, Your Ph.D., and More
from Mergers & Inquisitions by M&I </p>
<p>meaningless_certificationsI’ve noticed a disturbing trend lately: many readers have the wrong idea of what will help them with investment banking recruiting. </p>
<p>Thinking that they need to do “something” at the last minute to boost their chances of getting into the industry, they come up with all sorts of “creative” – yet marginally effective – ideas. </p>
<p>Read on to see exactly what not to do to get noticed in recruiting.</p>
<ol>
<li>The CFA </li>
</ol>
<p>I must get more email about the CFA than any other topic (yes, even you, models and bottles). </p>
<p>There are hundreds of reasons the CFA (any level) is a waste of time for getting into investment banking, but here are the top 3: </p>
<p>a. It’s not necessary for advancement and the majority of bankers don’t even have it. </p>
<p>If you want to be a portfolio manager, go ahead… but for the rest of us it’s marginally helpful at best. </p>
<p>b. Studying for the exam requires an obscene amount of time – several hundred hours according to the website. </p>
<p>Think about how much networking you could do in that same amount of time: let’s conservatively assume 200 hours of study time for the CFA. </p>
<p>Assuming you can conduct 1 informational interview in 30 minutes, that’s four hundred new contacts. </p>
<p>Which do you think will be more useful: a single line at the bottom of your resume, or hundreds of people who can help you get interviews? </p>
<p>c. There’s almost no correlation between the CFA and what you actually do as an investment banking, private equity, or hedge fund Analyst / Associate. </p>
<p>Last time I checked, the CFA curriculum did not cover administrative work, due diligence, pitch books, and the financial modeling specific to banking. </p>
<p>Please, no more email or comments on the CFA. Use those 400 hours and do some networking, learn another language, or go on a trip around the world – any of those would be more helpful for getting into finance. </p>
<ol>
<li>Your Activities </li>
</ol>
<p>“But wait,” you say, “I thought it was really important to be ‘interesting’ in interviews?” </p>
<p>It is – but bankers pick resumes mostly based on work experience and whether or not they know you. </p>
<p>Now if you’ve done something truly impressive – like starting a non-profit that built 1,000 schools in Southeast Asia – that can actually help you. </p>
<p>But let’s be honest: many activities are just resume padders, and having 1 name or 50 names won’t make a difference if that’s the case. </p>
<p>If you have absolutely NO finance experience and nothing even related to business on your resume, then you can play up your activities – but otherwise avoid it. </p>
<ol>
<li>That Investment Club You Started </li>
</ol>
<p>If you can’t get a real internship, start an investment club or student-managed fund instead, right? </p>
<p>Actually, this logic is not terrible: it’s certainly more helpful than the CFA, and in the absence of real business experience, it looks better than being a lifeguard or working at a restaurant. </p>
<p>But no student-run investment club is going to put you on par with the guy who did 2 summers at Morgan Stanley. </p>
<p>You should only do this if you can’t find a part-time, school-year, or summer business-related internship of any kind. </p>
<ol>
<li>Your “Internship” Waiting Tables </li>
</ol>
<p>Truthfully, being an investment banking analyst is much more similar to being a waiter than it is to most “real” internships. </p>
<p>You need to multi-task, you’re always running around, you have to deal with annoying clients all day, and you have to do a ton of grunt work. </p>
<p>But bankers themselves don’t see it that way and won’t acknowledge this type of work experience as equal to a “real” internship. </p>
<p>You don’t want to write about any of this unless you have nothing else to point to. </p>
<ol>
<li>Bloomberg / FRM / CPA / Other Meaningless Certifications </li>
</ol>
<p>Similar to the CFA, most other certifications are also useless – although on the up-side they don’t waste nearly as many hours as the CFA. </p>
<p>Some of these certifications – like the FRM and CPA – have nothing to do with investment banking, while others – like Bloomberg – are somewhat relevant but useless compared to, say, calling 5 alumni. </p>
<p>Remember, the only part at the bottom of your resume that most people even read is what’s in the “Interests” section. </p>
<p>Bored office workers always want to meet interesting people, but no one wants to meet well-certified people. </p>
<ol>
<li>The GMAT </li>
</ol>
<p>While getting a decent GMAT score is important for business school admissions, it’s less relevant for getting into investment banking at the MBA-level. And it’s even less relevant at the undergraduate level. </p>
<p>If you had to take it for business school anyway and earned a good score, you can list it if you want – but if you don’t have room, cut it. </p>
<p>But if you haven’t had to take it for any reason yet, don’t do it in hopes of getting a good score and using that to propel your way into finance: your time is better spent elsewhere. </p>
<ol>
<li>Non-Native-Speaker-Level Language Skills </li>
</ol>
<p>Ok, this one is not 100% true. </p>
<p>It helps to have some language ability, even if you’re not native speaker-level – something is better than nothing.</p>
<p>But unless you’re at an extremely high level (i.e. you could watch a university-level lecture on economics, understand everything, and then write a brilliant 10-page paper about it in that language), you can’t leverage language abilities to move to offices in other countries – there’s too much reading and writing required. </p>
<p>There are some roles – like trading and certain back and middle-office positions – that don’t necessarily require language mastery. But if you’re reading this site, you’re probably more interested in areas like investment banking and private equity, both of which require a lot of communication and reading/writing. </p>
<ol>
<li>Your Ph.D. </li>
</ol>
<p>After the CFA, this might be my #2 question received via email: </p>
<p>“Will a Ph.D. help me get in? Do banks care about my quantum physics skills? What if I’m the next Isaac Newton?”</p>
<p>First off, if you’re smart enough to write the next Principia, you should not be in investment banking because you’re going to get a lot dumber. Go write a book about your discoveries and win a Nobel Prize. </p>
<p>The math required in finance is VERY simple. Addition, subtraction, multiplication, and division if you get really fancy. </p>
<p>Most of what you do in M&A is administrative: sending emails, keeping track of different buyers, and updating Word documents. </p>
<p>So the only reason to get a higher degree is if you want better access to recruiting channels at a more prestigious school – and even then, stop at the Master’s level rather than doing unnecessary work. </p>
<ol>
<li>Financial Modeling Courses </li>
</ol>
<p>“Wait a minute, you just RELEASED your own financial modeling course, and now you’re saying that banks don’t care whether or not we’ve gone through them? Are you crazy?” </p>
<p>No, I’m just being honest. </p>
<p>The <em>knowledge</em> you gain from these courses is very helpful, especially if you don’t have a finance background or you want to prepare before you start working. </p>
<p>But listing the course itself on your resume – no matter which one it is, or whether you invest $100 or $10,000 – doesn’t guarantee you anything. </p>
<p>The bottom-line is that if you want to prepare for interviews and for work itself, these can be a good option – but they fail as mere resume padders. </p>
<p>Wait, So What DO They Care About? </p>
<p>Easy: </p>
<ol>
<li>Work Experience </li>
<li>Educational Background (more applicable if you’re a student) </li>
<li>How many people you know at their firm and how much they like you (networking) </li>
</ol>
<p>But there’s a problem if you’re trying to use any of these to boost your chances at the last minute: each one takes years or months of effort – you can’t do it overnight. </p>
<p>But It’s the Last Minute and I Really Need Something! </p>
<p>It’s pretty much impossible to add anything substantial if you only have a week left before interviews begin – but if you have a few months, here are 2 quick examples of how you can make some impressive-sounding last-minute additions: </p>
<ol>
<li>Study abroad program / some kind of international experience. (doesn’t need to be 3-4 months – something shorter is fine) </li>
<li>Summer, night, or part-time program at a well-known school. </li>
</ol>
<p>Any type of study abroad program is also great to talk about in interviews, especially if it’s to a completely random country or region. Going on a trek to Antarctica stands out more than going to Paris. </p>
<p>Doing some type part-time or summer program at a brand-name school is more helpful if you’re not going to a well-known school right now – anyone scanning your resume quickly will say, “Aha, I recognize that name.” </p>
<p>Last-Minute Standout? </p>
<p>Of course, none of these tactics will make up for a lack of solid work experience or lack of contacts in the industry.</p>
<p>But if you’re struggling to stand out with only a few months left, you don’t have much of a choice – you have to take what you can get.