Wall Street has changed in the aftermath of the Great Recession of 2008 and 2009 and that has changed the role of the investment banking analyst. For would-be analysts -- the industry is expected to hire 21,500 by 2015 -- new legislation such as the Dodd-Frank Financial Reform Act and the Credit Card Reform Act of 2009 has made the job more demanding with greater responsibilities.
Banks, brokerages and other financial services firm will favor job candidates who bring the following "must-have" attributes to the negotiation table:
- Deep insight into changing financial consumer demographics, including millennial investors who will inherit $40 trillion from their Baby Boomer parents and overseas investors climbing out of the middle class and into affluent investor status.
- A pitch-perfect grasp of investment risk and securities analysis.
- A clear, concise and compelling handle on the new banking business model, which emphasizes caution over aggressive risk taking.
- Deep experience in statistics, quantitative analysis and information modeling.
While investment firms continue to hone their wish lists for analysts, the good news is that the need for candidates who possess the above skill sets are already in great demand.
A May, 2013 study from Accenture says that global investment firms will fill 21,500 analyst jobs by 2015, a 23% uptick from 2010. Accenture adds that the rate of investment banking analyst jobs will "far outpace" the rate of employment in the U.S. the U.K. and Japan.
Viable candidates will have finance or business degrees, and preferably advanced Masters of Business Administration (MBA) degrees for plum investment banking analyst posts, although financial services firms do recruit finance and business undergraduates from high-end schools for entry-level analyst positions.
New analysts can expect long work weeks – 80 hours isn't out of the norm – and will work closely with firm managing directors to "fill in the blanks" on the investment strategies favored by those directors.
Expect to spend most of your hours on the following tasks:
Examining industry research – Investment banking analysts are usually slotted in industry-specific categories such as finance, health care, manufacturing or emerging markets. They'll talk to company executives and investors, and try to build cases for or against investments in specific firms or industries.
Build financial valuation models – A sharp facility with online spreadsheets and investment models, is vital for an investment analyst. Tracking financial trends, isolating business and revenue cycles, and gauging performance in increasingly competitive global markets will all be on the menu for new analysts – and in heavy doses.
Produce investment presentation materials … on- and off-line – New investment banking analysts are expected to be good communicators, for both retail and institutional investment banking audiences. Researching, writing and editing research reports, status reports, briefing
books and pitching books for new initial public offerings (and often managing their journeys through the editorial and production pipeline) are key tasks for banking analysts. Sudden and seemingly unreasonable deadlines for delivering these materials are also par for the course in the day-to-day life of an investment banking analyst.
The "Fast Path" to Becoming a Bank Analyst
The candidates who land the best analysts jobs at high-end Wall Street investment firms have a few in-common attributes, including:
- A bachelor's degree at a high-end business school (for entry-level posts)
- An MBA at a high-end business school (for advanced analyst posts)
- A heavy undergraduate classwork load in subjects such as accounting, finance, statistics, economics and business administration
- A heavy graduate school classwork load in bond valuations, options trading and pricing, tax laws and risk management
What to Look for in a Job Interview
Bank analyst candidates should be prepared to tout their experiences, either in their academic studies or in their careers. Be prepared to discuss your analytical and problem-solving skills. Interviewers will also likely ask you to define and elaborate on your interpersonal skills. your work ethic (those 80-hour weeks may or may not come up, but prepare like they will, and have a good response ready).
Investment firms will give an edge to candidates who can speak multiple languages (Chinese, Spanish and German are highly favored these days), and to candidates who have a firm grasp on technology and social media.
When you do get to the negotiating table, know that the average entry-level annual salary for investment analysts is $58,000, while financial analysts usually command $54,000 right out of the gate. Additional compensation, such as signing bonuses or yearly performance-based bonuses, is usually available, but these payouts will vary greatly depending on the employer.
A bonus tip: while you can launch your banking analyst job search on any date on the calendar, Wall Street firms usually deliver their yearly bonuses in December, after which some analysts may decide to jump ship. Thus, start your search in November, and intensify it in December and January, just as hiring managers are looking to make a move.
If you're a college graduate looking to break in, Wall Street firms often provide job fairs, "Super Saturdays" (recruiting events held on Saturday at the financial institution) and networking socials to break the ice – usually in the spring months. Check with your college jobs and careers office for details.
The Bottom Line
Latching onto a financial analyst job can be a gateway into a lucrative career on Wall Street. Expect to work hard and be ready to listen. Do all of the above, and you'll vastly increase your chances of landing that Wall Street analyst dream job.