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Investment Banking and Investment
Career Myths Debunked: Private Banking
It’s not all about networking and fancy dinners with clients! A career as a successful private banker requires a constant commitment to building meaningful client relationships.
Myth: Living the high life
Mentioning that you enjoy wining and dining clients is a common myth that will not win you any favours with the interviewer. Rather, you should portray yourself as a hardworking and diligent individual with an entrepreneurial mind-set.
Graduates are expected to handle all the administrative matters (which include account openings, trade reconciliations, investment presentations, etc.) and this is no different from roles in sales and trading or investment banking. Put simply, you have to do the grunt work until you have proven yourself.
So what is so exciting about private banking? Why are so many graduates eager to enter the industry?
If you enjoy interacting with clients, understanding their needs and tailoring solutions to meet those needs, then this is an industry well-suited for you. Along the way, you will receive exposure to different product groups, develop your relationship management skills, and eventually manage your own book of clients.
Managing your expectations
This is a crucial interview question that might make or break your chances of scoring the internship or job. Let’s play out a scenario that usually happens:
Interviewer: Where do you see yourself in 2-3 years’ time?
Graduate: I would like to become a junior private banker at the end of 2-3 years.…
Interviewer: (Stares at the graduate with wide eyes/shakes his head/looks stunned – either one or a combination of all these)
Private banking is a whole different ball game from the rest of banking. Private banks work with high net worth clients, and these individuals are sophisticated investors who demand the highest level of service.
It takes time and maturity to earn their trust and convince them to entrust their assets to you.
Therefore, for most graduates, the initial years will be for you to ease yourself into the industry. You have to build your own networks, increase your product knowledge, work alongside a senior banker, and develop the necessary skillsets that will allow you to transit from the graduate programme to a more permanent role in the organization.
Breaking into the industry - Graduate programmes
This is the most prestigious way of entering the industry. All top-tier banks have such programmes, though they each differ in some ways. Some are front-office private banker programmes (i.e. you are groomed to be a junior private banker) while others are product programmes (i.e. you become a product specialist in FX, Structured Products, Active Advisory etc).
One is not better than the other, and ultimately you should decide according to your interest and where you see yourself in the years to come. Other benefits of a graduate programme include international rotations (I’m writing this from Hong Kong), mentorships, support for CFA & CAIA exams, etc. Most banks place great emphasis on these programmes, and they actively help their graduates to do well.
However, competition for a coveted spot in these programmes is tough. The number of positions on offer is limited, and cost pressures are likely to cause this figure to dwindle further in the coming years. Hence, it is important to differentiate yourself and stand out from the crowd in order to increase your chances.
Below are some ways you can do so:
- Internships are of utmost importance. It will be ideal if you have multiple internships in private banking, as this underscores your desire to join the industry. Having a broad understanding of the business will also help you tackle interviewers who like to ask about the structure on a private bank.
- Be prepared for your interviews – research the industry and the bank you are interviewing for as extensively as possible. You should also find out what differentiates the bank from its competitors. Lastly, convey to the interviewers your passion for the business, and your well-reasoned motivations for wanting to do private banking.
A little about myself: private banking was my dream job since NBS days. I did my wealth management internships with BNP Paribas, Standard Chartered and Julius Baer before joining the Barclays Graduate Programme. Contrary to the belief of some, the level of competency required and the competition that you can expect during the recruitment process is no less intense than with other front-office roles.
Hence, it is critical to work towards identifying your career objectives as soon as possible, and put in the effort to work towards securing a job in the industry.
The journey from your degree to the hallowed halls of the big names in finance will not be easy. But with the right support, knowledge and determination, you can eventually reach your goal!
Career Myths Debunked: Investment Banking
You don’t need to be a mathematical genius to succeed as an investment banker, but you do need to be prepared to put in the long hours!
Myth 1: Living the high life
Most fresh graduates come into the industry with the expectation of embracing a lavish and extravagant lifestyle, but that is usually a misplaced dream. There is a need for lots of hard work if you are to thrive or even survive in the industry, and the real work that you are doing might not be as glamorous as it might seem from the outside.
Myth 2: You need to be very smart
Investment banking is about being smooth with numbers. Most of what you do usually requires only high school math and basic logic. Addition, subtraction, multiplication, division and maybe some simple percentages are usually the required skills.
But you do need to be detail-oriented and make sure that you don’t make mistakes on those numbers that you are putting down in your spreadsheets or slides. Microsoft Excel and Powerpoint are mainstays.
Truth 1: You’re on call 24/7
With demanding clients and bosses, you can never really make plans for your weekends. You are always on the lookout for the next e-mail that might lead to changes in assumptions in your Excel models, which will in turn lead to further amendments in your PowerPoint slides.
Truth 2: Soft skills are needed
Soft skills – communication, negotiation, and interpersonal skills – are very important. It’s advisable also to brush up your presentation skills.
As a junior, you are required to set up meetings and conference calls, and responding to multiple e-mail requests from internal teams and clients. In a day, lots of your time will be spent writing and talking to various stakeholders.
Breaking into the industry – internships and graduate programmes
Most bankers would want to hire people whom they have worked with, and especially so for fresh graduates. Hence, that is the usual route for people to break into the industry.
If you are able to perform well and impress your seniors and superiors during an internship, you stand a good chance of conversion to an analyst upon graduation. Preparation for interviews is an essential step towards getting an internship in the investment banking team.
Alternatively, some banks do not hire analysts directly into their investment banking team, and you will need to go through their graduate programmes to stand a chance of working in the investment banking team.
Why do it?
Given all the long hours and sacrifices that you would have to make in your personal life, why would someone decide to join investment banking?
For me, it is all about the exposure and network that you can get right from the junior level. That is something that you will not be able to achieve in other professions. If you want to get into fields like private equity, hedge funds, or venture capital – or go to a top business school – investment banking is definitely one of the best ways to do it.
Career Myths Debunked: Equity Research
Specialisation is key to a successful career in equity research. Also, good stock recommendations aren’t the only thing you’ll need to worry about!
Myth #1: Anyone can do research by compiling information from the internet
While the definition of research is very broad-based, the scope of research in the sell-side is very well-defined, and requires information beyond what can be gleaned from the internet. An analyst can typically start out his/her career in equity, fixed income or economics.
Myth #2: The job requires you to research anything under the sun
Equity research analysts on the sell-side are focused only on a particular sector of stocks (e.g. property, banks, energy, consumer sectors, etc.), as opposed to understanding multiple sectors.
Specialisation is a necessity, as job success hinges on providing detailed and accurate company and industry knowledge, trading ideas, and company management access.
Myth #3: Your job involves placing good stock recommendations
Good stock recommendations are an important outcome for sell-side equity research analysts, but there are other important aspects:
- Detailed financial modeling for the companies (and sectors) being covered
- Generating good stock ideas — buy, hold, sell ratings
- Writing industry or company-specific reports
- Marketing the content of your analyses to institutional clients
- Meeting management to understand more about a company’s business plans
Myth #4: Sell-side research makes money through investment management
While making stock recommendations is a part of the job, the sell-side research practice does not trade on their stock ideas. Rather, it generates revenues indirectly, primarily through commissions when the buy-side trades through the sell-side trading desks.
Breaking into the industry
Vying for a front office job in a financial institution, or landing an equity research analyst role is not easy. There are however, preparatory steps that can enhance your chances.
Aim for a decent GPA. While your GPA is absolutely not a make-or-break to get a career in finance, a good GPA definitely helps to get past the résumé gatekeepers and gain an interview opportunity.
Actions speak loudly. Whatever the area of interest for your career, pursue active steps to strengthen your overall credibility. For example, if your passion is in trading, display your keen interest by joining stock competitions.
Keep trying and do not give up. Despite putting in hard work, finding a good internship or job can be hard. Sometimes, the results can be beyond our control, but the only way is to keep learning, keep trying and be patient.
Good things will come to those who work for it, all the best!
Career Myths Debunked: Asset Management
Not all asset management jobs are equal, and don’t be too quick to show off your stock ideas during a job interview!
Myth #1: everyone will be a fund manager
This is probably the biggest misconception – asset management is not just about portfolio management. Likewise, global markets is not strictly sales and trading, while investment banking is more than just corporate finance.
Broadly speaking, an asset management house needs salespeople, investment specialists, and product managers.
A salesperson is the “eyes and ears” of the company, crafting and pitching investment solutions to intermediary or institutional clients and assessing the market demand. An investment specialist is usually a hybrid of a sales and investment role with an in-depth understanding of certain portfolio strategies and investment styles (although this role is only for experienced hires).
A product manager structures investment products for a salesperson to sell and they typically develop in-depth knowledge of related regulations through liaising with regulators and legal counsel.
Different roles will require different types of skill sets. If you insist on just being an investment analyst or fund manager, you might be killing your opportunity to join an asset management firm which offers other roles.
Whatever the role is, be prepared to handle the leg work as a junior.
Myth #2: all asset managers are the same – they just manage money.
Yes, asset managers manage money. However, it is not true that every asset management house is the same. Asset managers differentiate themselves through their business models.
Understand their key focus and capabilities: Are they targeting to become a one-stop investment solutions provider – traditional active management, ETFs, real estate investments, etc.? Or are they predominantly a fixed income manager or equity manager?
Bear this in mind when researching the company.
Interview question: So you want to join an asset management house, what investment idea would you recommend now?
There is no right or wrong answers to your recommendation.
On a day-to-day basis, the objective of investment professionals is to make informed decisions on taking long or short positions in investments. Time will tell whether they made the right calls – if the market meets your expectations, then you are right today. If not, you are wrong.
The first rule is: don’t panic. Don’t be too quick to “show off” your best stock ideas either. Your interviewer(s) could be analysing macro factors instead of companies for a living.
Set the stage for everyone by giving a brief introduction of your best stock idea. Discuss what led to your stock recommendation, as well as macro factors and potential risks that would affect your analysis.
Be ready to answer any questions thrown by the interviewers testing your thought process. Your ability to share your ideas clearly will demonstrate your level of interest for investments.
A clear, logical and structured thought process is what most interviewers are seeking here. Your ability to communicate your investment idea in a concise manner is important too. There is no other way around this, so prepare, prepare, and PREPARE!
Stepping Stones to a Permanent Career
Your best bet is to join internship and/or entry-level analyst programmes offered by major banks. Either one is a good representation of what you actually will do in asset management.
Both programmes also encompass a wide variety of roles to match their varied business needs to the wide-ranging interests of students.
How to Network for Investment Banking Jobs
Networking is one of the most underrated skills when it comes to hunting for finance jobs. As a fresh graduate, what can you do to make sure you’re being social enough?
Some people might think that networking is just an American thing and that it won’t work in Singapore. That’s where they’re wrong! The local finance industry – and the investment sector in particular – is a surprisingly small world where who you know can make a big difference.
It’s never too early to start networking for opportunities in investment banking and management, whether for full-time graduate jobs or internships! Here’s what you should be doing to get your foot in the door.
Get your priorities right
It may seem that all recruitment events are worth going to, especially if they’re hosted by the bigger investment banks. However, given the sheer scope of events out there, it’s important to prioritise in order to avoid wasting your time.
If you have specialised skills, it’s better to go to a recruitment event that is looking for those specific skills. Examples of such skills include risk management and compliance expertise, which are particularly in demand in 2014 due to increased regulation by the Monetary Authority of Singapore (MAS).
If your skills aren’t so specialist, don’t limit yourself to networking locally. Keep an eye out for contacts across the region as well. After all, plenty of investment graduate schemes will have you rotated across different countries too.
Use any opportunity
If you’re in a place where you have easy access to the people you need to be talking to, such as being on campus, then you have a massive advantage.
There are plenty of recruiters from banks or investment firms who drop by campus on recruitment drives, so take the opportunity to meet them and listen to what they have to say.
It’s not just about recruitment events, too. If an industry professional has just given an academic lecture at your university, hang back and ask them some intelligent questions about what they’ve been talking about (make sure you’re genuinely curious, though).
Once you’ve both finished talking, ask for their business card to keep in touch. Don’t be afraid – the worst they can do is say “no”.
Be brave at networking events
Going into a room full of people can be daunting – especially if most of them are strangers. It is tempting to just retreat into a corner to “check your e-mails”, but remember that talking to as many people as possible is invaluable!
Here are some ways to make your life easier:
- Always look for a crowd with an odd number of people. Networking events are noisy, so it’s very difficult to hold a three-way conversation. Someone will automatically gravitate towards you if you join the mix.
- Step up to a circle of people who are talking. Listen to them intently, and as soon as you get a chance, put your hand out and introduce yourself. Social niceties dictate that people will always shake your hand, and will most probably start asking you questions. This helps if you can’t muster up the courage to break the ice on your own.
Follow up on new contacts
So you’ve hit it off with a potential contact and gotten their business card. That should be enough to stand you in good stead if you do apply to their company, right?
It’s not enough just to get someone’s contact details – you have to follow up immediately. Tell them you’ll call or e-mail to ask some questions. Or, if you’re feeling bold, set up a casual meeting and then keep it.
Once again, make sure your curiosity is genuine! No one likes hanging around a pretentious person who’s quite obviously got an ulterior motive.
Keep track of everyone you meet
If you’re networking properly, you should have quite a few people to keep track of. Take extensive notes in any meetings you have with contacts, and log them into a file in your computer or planner afterwards.
It’s good to know as much as you can about your connections (without venturing into stalker territory!). This will help you build relationships with them. Also, remember to follow up on old contacts regularly – you should also be keeping previous associations useful and relevant.
If you want to get a bit more creative, try setting up a Google News alert for every contact you meet. Not only will you be kept up-to-date on what they’re doing, you can also send them a congratulatory e-mail if they close a big deal.
It’s a small touch that your contacts will appreciate, and will cost you no time at all.
Do your research
If you have a meeting or interview at a firm where you don’t know anybody, see if you can find out the names of those you’ll be talking to beforehand. Then, try searching for them on LinkedIn.
If you’re a “second-degree connection” (i.e. you were introduced by someone else), you should talk to your mutual contact in advance to find out what to expect. Personal connections are great short cuts, and can be really helpful when you want to impress a potential contact.
At the end of a meeting, it’s often a good idea to ask if there’s anyone else they think you should meet. This could be as simple as being introduced to an intern with a similar background to yours.
Approach the people you know
If you see someone you know at a job fair, recruitment event, or employer talk, use it to your advantage even if you don’t know them that well. Walk up, say “hi”, and make a brief attempt to catch up.
You don’t have to be too familiar with some someone to ask them questions – you just need to be credible. Keep empty chit-chat to a minimum, and ask intelligent questions, not “What’s it like to be an investment banker?”
Don’t forget their assistants
If you’re rude or dismissive to a contact’s assistant, do you really think your phone calls are going to get through? Be polite and professional, no matter who you happen to be speaking with.
Get a life!
Nobody thinks about work 100% of the time! Try using common interests outside of finance as a conversation starter, or as a bonding opportunity. Pay attention when someone mentions hobbies, or if they are fans of a specific sports team.
The investment banking industry is very demanding, so don’t be afraid to talk about non-finance things alongside work topics. Some people may even be willing to come out of the office with you for a coffee break if they have time, so that they can take their mind off the job for a while.
If anyone tells you to stop calling or simply says “no”, then cross them off your list. There are loads of other people you can ask or network with, and it’s not worth getting on anyone’s bad side.
Compare Your Investment Banking CV with the Competition
Résumés for a graduate scheme with an investment bank usually fall into three types: straight-and-narrow, everyman, and wild card. Want to know where your résumé fits and how to improve it?
Several banks, including Barclays and Nomura, will ask graduates to submit a résumé along with their application form. Other financial firms, including Credit Suisse, require a cover letter with your application as well.
Since competition for graduate roles in investment banks is fierce, it’s essential that you get your résumé and cover letter right.
Graduate résumés for investment banking jobs generally fall into three types, so compare yours to the three “typical” investment banking candidates below to see what category yours falls into. From there, you can identify areas for improvement!
The straight-and-narrow candidate simply ticks all the boxes. This type of candidate has directly-related work experience in the financial sector (gained either from an internship or prolonged work experience), and a solid academic track record with an honours degree in some business-related major.
They may also have extracurricular activities showing their potential as a leader and motivator – qualities highly sought by banks including Credit Suisse.
If you’re a straight and narrow applicant, the good news is that you may have already met 80 per cent of the requirements listed in the job description. However, don’t get complacent – there are plenty of other candidates out there who have “ticked off the boxes” like you have.
Inject some of your personality into your résumé and cover letter so that they don’t come across as too “typical”, bland, or rigid. This doesn’t mean you need to come up with a radical style and format, as your application should be legible and look smart!
Rather, incorporate more original examples from your extracurricular activities and work experience, or from times when you took a risk and produced exceptional results to illustrate your skills and experience.
A detailed but succinctly written example can be included in your cover letter. If the employer doesn’t accept cover letters, put it in the work experience segment of your résumé under the appropriate employer instead of simply listing your duties.
Or, you could try incorporating it within the skills or achievements section.
The everyman has explored a few different avenues, and has work experience in finance as well as other unrelated sectors. Their résumé doesn’t have any gaps, as they’ve worked throughout all university holidays.
This candidate also has a strong honours degree in a related finance subject. The everyman will usually try to link experiences obtained in an unrelated sector to the role which they are applying for.
While the everyman applicant shows flexibility and adaptability, and has obtained some relevant work experience, their challenge is to ensure the details on their résumés and cover letters are applicable and well-organised.
Many of these candidates attempt to flood their application with every experience or achievement they have, thinking it will look impressive. This is a big mistake.
If you’re an everyman candidate, divide the work experience section of your résumé into “finance” and “additional” sections. Put all finance-related experiences under the “finance” heading (including relevant achievements or projects you’ve worked on).
Then place pursuits within other sectors in the “additional” section.
The key for the everyman is to highlight transferable skills that they’ve gained across their variety of experiences, and to prove how those can be related to a career in investment. Make good use of the cover letter to explain your varied endeavours, and to link them to the role which you’re applying for.
The wild card
The wild card candidate is not the typical applicant, but clearly demonstrates an aptitude for finance and a clear interest in a career in investment or investment banking.
This candidate may have an excellent honours degree in a seemingly unrelated subject – such as English literature – but knows that many banks, such as Morgan Stanley and Nomura, accept applications from all degree disciplines.
The wild card candidate may have a small amount of directly-related practical experience under their belt. Or, they may have completed a trading course after university and joined a financial student society to increase their knowledge and skills.
If this is you, because you have less directly-related experience, you must make sure your résumé and cover letter effectively communicate a genuine interest in the industry and showcase the initiative you’ve used to build relevant knowledge and experience.
Conduct thorough research into the bank and role so you can accurately articulate how your skills and knowledge – finance-related or not – would be an asset to the employer.
Also, turn what might appear to be a weakness into a strength. Take advantage of your degree in English literature, for example, and explain in your cover letter how it’s improved your ability to think critically, conduct research, write reports and communicate effectively – skills investment banks usually favour.
As with the everyman applicant, compartmentalise your résumé so you have related experiences and achievements at the top, and unrelated ones towards the bottom. With all your less directly relevant experiences, make sure you bring out the skills you’ve developed and picked up that apply to the position you’re going for!
Structured Finance: Graduate Area of Work
Working in a structured finance team gives graduates a chance to become recognised experts early on in their careers.
Structured finance is a branch of the banking and investment field that specialises in customising financing solutions that do not fit into the category of conventional business loans or financial market instruments for companies with unique financing needs.
This covers a comparatively extensive range of instruments such as debt and equity capital, and even mezzanine financing (a hybrid of debt and equity capital that resembles mortgage services, tailored to the needs of the borrower).
Essentially, structured finance works by creating liquidity and “safe” assets for a business organisation from risky instruments. This risk is then transferred to the different parties involved in the transaction in amounts that are acceptable to them – with proportionate returns for the amount of risk a stakeholder is willing to stomach.
In order to serve their clients, structured financiers start by finding out about the specific requirements of their clients’ transactions, assets, or projects. In particular, they need to be familiar with their clients’ risk appetite and business goals, which makes rigorous risk analysis a big part of the job of a structured financier.
It is only through knowing these factors that structured financiers are able to personalise a suitable combination of debt and other products that can help finance the clients’ business successfully.
This involves thorough examination of all the issues which might affect a transaction, as well as a complex modelling of its forecasted performance to see how external factors such as commodity prices might influence the profitability of a project.
Hiring managers looking to fill structured finance roles typically draft selected members who demonstrate an aptitude for this line of work from the organisation’s graduate trainee programmes. However, they do sometimes run recruitment drives to hire graduates directly into structured finance.
It is commonly expected for individuals to specialise in a particular area after some time working in the sector. Knowing this, some graduates may opt to do a specialised postgraduate degree before entering the field in order to gain a more solid understanding of their chosen business sector in advance.
You will usually be working in teams of five to 20 people, assembled ad hoc under the leadership of an experienced deal leader for a specific transaction.
Most of the time, the deal leader will opt to bring in an eclectic combination of specialists from different sub-sectors so as to get a variety of viewpoints on the issue at hand.
For instance, in the case of a telecommunication team, the team leader will want – among many others – specialists who understand the consumer market, experts on financing the building of communication infrastructure, and professionals well-versed in engineering developments within the sector and how they affect the industry.
Hiring managers in this line of work subscribe to the belief of hiring for attitude, but training for aptitude. Sector expertise and financial structuring knowledge can be learned.
Recruiters are much more interested in finding a hunger to win, as well as a drive to innovate and find interesting solutions to complex problems.
That being said, having good analytical skills is vital for a job in this field. You will need to be able to dissect a situation quickly and to catch any small details that may either lead you to a creative solution or jeopardise your risk analyses.
As your position will involve a lot of client-facing time and team-based work, you will need good communication skills – both verbal and written – as well.
Ups and downs
A key draw of this area of finance is that you can become sort of a recognised expert in a specific field or sub-sector.
This line of work may also be a plus for those who enjoy more creative thinking – having to tailor debt packages and other financing instruments to fit your clients’ specific needs means that there is a need for you to think out of the box instead of just following conventional financing schemes.
You will also get the chance to oversee deals from start to finish. As your small team will be responsible for the entirety of a particular deal, you are expected to contribute in all aspects, including managing individual processes and finding necessary experts from various areas in order to help close the project successfully.
Working hours may, however, be uncertain as this is a project-based line of work. As such, your working time will be dictated by the deadlines, peaks, and lulls of your projects and assignments more often than not.
Specialist Markets: Graduate Area of Work
Developing expertise in a particular sector and client base is part of a graduate’s job in specialist markets.
Specialist market teams are usually experts of their fields, ranging from healthcare to technology and energy. Their tasks encompass quite a broad area, from assisting clients in specialised sectors with investment and financing strategies, to mergers and acquisitions (M&A) between companies within a certain sector.
Depending on the size of the organisation that you join, you may be required to deal with different volumes of financial products.
Bigger organisations may cater to a whole range of sectors, thus dominating several niches at one time; whereas smaller boutique consultancies may instead focus on servicing several sectors within one specialist area.
A big part of this job lies in understanding both your clients’ businesses and the sector(s) they operate in, and then looking for a way to bridge these two.
It is necessary to start by recognising the wants and needs of your clients – the assets that they possess, their goals, and the steps that they are willing to take in order to achieve those goals – before you can give them specialist advice.
Graduates starting out in this line usually begin with some training in the company’s products as well as general investment banking services. Specialist knowledge, on the other hand, will be picked up through accumulated experience on the job, as well as learning from more experienced seniors.
Depending on the size of your hiring organisation and the numbers of sectors that they cover, you may be rotated to service multiple sectors so as to gain a better understanding of how their products can be best applied to each one.
As a newcomer to the field, you will usually start off researching and preparing presentations and models for client meetings, as well as analysis of your clients’ companies.
Once you have progressed in your role, you may be asked to join in discussions to generate ideas and to provide financing solutions to clients. You may even be assigned as the person-in-charge during mergers and acquisitions once you have established yourself well enough in the company.
At more senior levels, members of specialist teams may even be called upon for expert consultation by CEOs or board members at client companies.
Sector-specific knowledge is most important for those who are working in this line. Having a holistic, comprehensive, up-to-date understanding of a sector’s inner workings will determine your success in this line of work.
Due to the importance of such knowledge, most organisations will want to hire graduates who demonstrate the ability to absorb information quickly.
The learning curve is usually steep (particularly at the beginning of your career) due to the sheer amount of highly-specialised knowledge you’ll need to pick up in a relatively short amount of time.
Being flexible and possessing an enthusiastic yet level-headed nature will also stand you in good stead. Most hiring managers will appreciate those who are willing to work hard and are eager to take the initiative to look for opportunities.
Good communication skills are also necessary for this job, as you have to be able to convey your message clearly to your clients.
Ups and downs
You may encounter demanding clients who are unwilling to go the extra mile for their goals but still expect superior results, or customers who are reluctant to take your advice. Patience is imperative under such conditions, and so are tact and diplomacy.
Working hours may also be unpredictable as each project will have a different deadlines andpeak periods.
Nonetheless, working in a specialist markets team is a great way to build a wealth of contacts and knowledge that will serve you well if you intend to become an expert in financial services for a particular sector.
This is a great line of work to start off in if you plan to branch out into a consultancy career sometime in the future.
Risk Management: Graduate Area of Work
Risk management staff ensure banks and financial companies remain both profitable and safe by educating management on the risks that they are taking.
Risk management – also known as risk control – assists the business by making known the risks that are being taken, as well as keeping it in tune with the organisation’s risk appetite.
It ensures that the company is taking enough risks to grow and generate profit, but not too much that it reaches a perilous threshold.
Risk roles are generally designated into two types: credit risk and market risk. Credit risk is primarily concerned with clients, products, and industries. You may, for example, be researching specific industries or markets periodically to assess their current stability.
Market risk, on the other hand, is more concerned with the practices of the organisation itself. It is about evaluating the wider market implications of an organisation’s practices, and then adapting the organisation’s portfolios to avoid triggering excessive risk.
The work in this function is varied. You may be involved in the modelling of a new financial product that traders are interested in selling, or tasked with reporting and explaining in detail the complexities of a financial product to senior management – who may be unfamiliar with this area of the business.
As such, the ability to simplify complex information and communicate it well is therefore crucial.
Risk management can also be carried out as part of the organisation’s operations division. In this case, the main responsibilities will be regulatory compliance and operational risk mitigation.
You may be asked to file reports to regulators, or assist in the approval of complex trades and transactions.
Banking regulations have changed significantly in recent years, with the emphasis on greater controls on what banking institutions are allowed to do and how they must report this.
Risk staff are at the forefront of this work – particularly when you consider that in risk management, you could just as easily be working with regulators on the formation of policy as with traders who are under pressure to gain advantages in a competitive market.
Most graduates who are hired into this line of work have typically completed an internship with the hiring company previously.
You are usually placed in a graduate training programme, where you will be exposed to the necessary skills, and then continue to learn through subsequent on-the-job training, mentoring, as well as internal and external training courses.
Common responsibilities that graduates may start off with include generating reports and analysing value-at-risk figures and risk of loss. Given enough time and experience, you may also be included in discussion sessions with traders.
It is important for risk management staff to know the immediate concerns of traders, salespeople, and marketers to have a proactive (rather than reactive) approach towards risk control.
Additionally, it is also possible that you will be asked to liaise with regulators from government bodies and to act as support during complex transactions. This may sometimes translate into opportunities for international assignments.
It goes without saying that good numeracy and analytical skills are key for risk roles. In fact, mathematics, economics, or science qualifications are mandatory for certain specialised risk functions.
Excellent communication skills are a definite must in this field. You will often be presenting and explaining the risks that come with complex financial products to people with little detailed knowledge of such transactions.
Effective teamwork skills are a must as well, since you will typically tackle projects with team members from diverse departments.
You will also need to take initiative to keep yourself updated with the development of new financial products – both your own organisation’s as well as its competitors’. Curiosity about the states of various global markets – what makes them tick, what might happen in the future, and what such events may mean for the organisation – is also a desirable trait.
Ups and downs
Risk management is a relatively systems-dependent field. However, due to the rapid pace at which risk models constantly evolve, the technology required for your data projections may not always be readily available.
You can expect to encounter frustrating times where you are reduced to performing work manually. Alternatively, you may even have to rig together an improvised system on your own time to perform the necessary tasks.
Perhaps the biggest advantage of working in risk is that you get to be at the centre of things – at the cutting edge of new products and trading opportunities.
Your role will be one with an inordinately high level of influence, as you can influence the shape of transactions as well as have a say in how business is done.
Private Wealth Management: Graduate Area of Work
Also known as “private banking”, private wealth management is about managing the finances of high net-worth clients.
Private wealth management – more often referred to as private banking – engages high-net-worth individuals (HNWIs) (along with the occasional small-business owner) who are looking for specialised services that cater to their distinctive needs as clients with a larger-than-usual amount of wealth.
This can include financial planning, investment management, as well as advising on tax, retirement funds, and family trusts.
While these may seem like run-of-the-mill retail banking services, the tricky part is that these clients tend to possess diverse portfolios across a number of industries.
As a result, catering to these clients requires in-depth, specialist knowledge of their investment options and the industries that these encompass. Indeed, private wealth management usually involves customising and tailoring exclusive solutions for specific clients.
Private wealth management services can be split broadly into two areas: advisory and discretionary.
Advisory services involve the bank advising the client on what decisions should be taken to maximize their returns. The client then acts accordingly, maintaining direct control over their portfolios.
Discretionary services, on the other hand, involve the client and the bank meeting to discuss overall strategy to maximise the client’s return. The bank then makes the appropriate day-to-day decisions to achieve that aim, freeing up their client to do other things (unless unexpected occurrences such as a sudden economic crash occur).
Job roles within the private wealth management industry typically fall within one of these three areas: relationship management, investment, and support.
Relationship management positions are essentially sales and marketing roles. People working in these positions are responsible for developing and maintaining a good rapport with the clients, as well as promoting the bank’s services to them.
It is their job to identify clients’ needs and the problems that they may face, and to “match-make” them with the solutions that the bank can offer.
Investment specialists then analyse the market and provide investment recommendations to clients brought in by relationship managers. In discretionary capacities, they may also make investment decisions on clients’ behalf.
Investment staff may also liaise with other product specialists in the bank who can provide expert advice on certain assets or investment options.
Staff working in support functions will assist investment professionals in managing client portfolios and researching new commercial ideas. They also ensure that the overall business runs smoothly, and that key activities are carried out on time.
These functions can include compliance, operations, human resources, and accounting.
For those looking to work in relationship management, a degree with strengths in marketing, sales, or public relations is a plus. Possessing some knowledge about the financial market and how it operates is also desirable in understanding how best to fulfill the needs of your customers.
It goes without saying that good communications and people skills are crucial, but patience is also another very important trait to possess as your clients may be quite demanding and difficult – given the fees that they pay for the company’s services.
Language skills are also highly valued in such roles, and multilingualism is a huge asset.
Those intending to work as investment professionals do not necessarily need a finance-related degree. However, some private wealth management firms may want you obtain specialised certifications (such as a master’s in wealth management), before you are allowed to climb the ladder past a certain point.
Strong numerical and analytical skills are also equally important, and so are self-motivation and your ability to work in a team.
Most importantly, though, is your practice of trustworthiness and discretion. Remember, it’s called “private” wealth management for a reason – it is vital that information does not get leaked as you handle clients’ investments!
Ups and downs
One main benefit that private wealth management people enjoy is the insight that they get into the industry.
As many wealthy customers who use such services usually cross-invest their assets, you will get a chance to observe (and even participate in) various investment strategies in order to derive the most returns. Most client-advisor relationships tend to last long in this industry, which often translate to good networking resources.
The downside, however, is that it you will need to accrue a significant amount of experience in this industry before anyone will even trust you to handle a customer’s finances.
This line of work is also well-known for being highly competitive, with numerous firms (and even your own co-workers) jostling after a small, select elite of high-net-worth clients.
Be prepared to work incredibly hard if you want to advance a career in this profession.
BNP Paribas: How to Get Hired
Andrea gives an insight on how graduates can prepare for BNP Paribas's candidate selection process.
Please describe the assessment process for applicants to your organisation.
All applicants are required to submit an online application via our graduate portal (http://apacgraduates.bnpparibas.com/). Upon submitting their application, they will be invited to an online situational judgement test and subsequently the online numerical test if they are successful in the initial test. After which, their application will be reviewed by the hiring manager. Shortlisted candidates will be invited to 2-3 business interview rounds followed by a final interview round with Human Resources before the selected candidate will be extended an offer.
What are the skill sets you look for in fresh graduate applicants?
Apart from a strong academic track record, we’re looking for agile-minded, well rounded individuals who:
- Take initiative
- Possess strong analytical skills
- Are adaptable
- Act with integrity
- Are client focused
- Are results driven
- Possess strong decision-making skills
- Enjoy teamwork
Please give us an example of a past year's case study/challenge that your organisation has used in your assessment process.
Our assessment process is generally conducted in the form of competency interviews instead of case studies. We evaluate each candidate against 8 graduate competencies (as mentioned above), which are aligned with our driving forces.
Does your company have a structured graduate programme? If so, what advice would you give to graduates wanting to make the most of these programmes?
BNP Paribas has a 24 month structured graduate programme, alongside a full-time contract extended to them. In terms of the development plan for Graduates - the APAC Graduate Program is a modularly structured, comprehensive set of on- and off-the-job learning and development measures to equip graduates with technical skills and competencies to embark on a successful Banking career. The program starts with the APAC Graduate Academy at the APAC Campus where graduates will be immersed in a combined group training followed by stream specific training. Each graduate is hired into a specific business line / Function at BNP Paribas and, graduates will typically rotate within the business area during the 24 month program. At the 1-year mark, the Graduate Pit-stop would essentially cover a health check on the graduates’ progress, along with personal development initiatives. At the end of 24 months, the graduates would adjourn back to the APAC Campus for their graduation ceremony and prepare themselves for the next stage of their journey with the bank.
Each graduate will be assigned a mentor for 12 months to facilitate the transfer of knowledge and experiences as well as support the graduates during the start of their career with us. There will be opportunities for the graduates to participate in strategic traversal projects. At the end of the program, we expect that graduates will continue their employment with the business line they joined and that they will continue to develop their career at BNP Paribas.
The onus lies on the graduate to be the driver of their own career development at the end of the day. In order to make the most out of the programme offerings, it is best to make full use of the various learning and networking opportunities planned. Graduates are most welcome to create networking initiatives of their own to increase visibility with senior management and continuously build their knowledge about the bank.
How do you identify culture fit during the recruitment process?
The group has identified the BNP Paribas Way, which guides our actions and our daily activities. It comprises of four pillars of strength, which is Steadiness, Responsibility, Expertise, and a Good Place to Work, coupled with our four driving forces: Agility, Client Satisfaction, Compliant Culture and Openness. Our four driving forces are well-aligned with our graduate competencies to identify culture fit during the recruitment process. In addition, shortlisted candidates also issued a personality profiling questionnaire to complete for us to understand their work preferences on the job.
Please describe your company's culture in three words.
Responsible, meritocratic and cohesive.