Questions on summer recruiting, deciding between offers, and more

Here are some questions from our readers:

1. I am in a 3 year program instead of a regular 4 year program due to credit exemptions from AP course. Does this disadvantage me according to IBs?

It's a disadvantage in terms of not having as much time for internship, extracurricular, and other life experiences to speak to. But if you already have a strong resume, it shouldn't be a problem. We know of many students who landed a position at JPMorgan, Goldman, and Morgan after 3 years of study.

2. Due to a rough start, I have a relatively low gpa (3 - 3.5) but it is on an upward trend and I am sure that I will be able to reach above 3.5 by the end of my degree (previous academic achievement in high school and before shows this). Should I apply for a summer position now? Or wait till my final year to apply for a FT posiiton.

Maximize your chances of getting into banking - apply for the summer and full time positions. Going through summer recruiting is good practice for FT recruiting -- you get to know alums and recruiters who will serve as resources. You also get the opportunity to learn about any weaknesses or areas of improvement -- ask your interviewers for feedback on what you could've done better. That will help you with the end goal of landing a full time job.

3. I interned at a bulge bracket after my sophomore summer and have a return offer this summer. I'd like to try another bank next summer, but I'm concerned that I would burn the bridge with the bank I worked at last summer. Do you think this is an issue? I don't want to go to another firm and then risk having no FT offers.

We were also in this situation before. We can say that at one BB, after turning down the junior summer offer to return, you can keep in touch and reiterate your interest in full-time opportunities. If you stay in contact with them, you have a high chance of going through accelerated full-time recruiting. Banks always interview more applicants at the end of the summer.

It's highly unlikely that you would receive zero full time offers if you've landed summer positions at two bulge brackets. Especially since the market is looking to be no worse than what it's been the past year, if you were able to land selective summer positions two years in a row, you have great credentials for full time recruiting. As an aside, we know former summer analysts who didn't receive a FT offer from GS/MS and still landed positions at other bulge brackets/boutiques.

So if you are set on wanting to work at another bulge bracket for the summer (which is always a good thing for undergrads -- beyond the technical knowledge you get to expand your network), there is some risk but tremendous upside from having an added experience under your belt. In the worst case scenario you will have to go through FT recruiting, but it's worth it if you want to find a firm that is a better fit for you (assuming you are not challenged / not satisfied with your current offer).

Good luck!

Other finance internship/externship opporutnities

Here are some other opportunities you undergraduates should definitely take advantage of if you want to break into banking.

UBS EXTERNSHIPS

UBS has a "Discovery Days" program for those completing their sophomore years. The deadline is usually around early February. The program is about 3 days, and let's you see the different divisions of an investment bank (from the trading floor in Stamford, CT to Investment Banking networking on Park Ave in Manhattan). This program is a feeder into the UBS summer analyst program and the full-time hiring.

UBS also has a one-day "Freshman Frenzy" program for those currently in their freshman year. It's a nice exposure program -- mostly for networking. UBS also has a Summer President's Program, and having contacts and participating in the Freshman program will give you a huge leg up later on.

BARCLAYS

Lehman used to have a spring break trading internship to attract more diverse candidates at the firm.

Barclays has since started other programs encouraging a more diverse pool of candidates.

This includes the newly launched IBD and Capital Markets "BOOT CAMP" - a look at the firm aimed at juniors.

Barclays also has a sophomore rotational program, which allows interns to see IBD, IMD, and Capital Markets.

Spring Term Internships at Bulge Brackets

Deadlines for summer internships and other internships are right around the corner.

We've been getting requests to write about non-summer internships at bulge bracket banks. Our resume reviewers have been through the recruiting process for several of the bank programs. This is the first post about internships you'd be interested in! As always, let us know if you want to hear about the recruiting process and experience of a particular internship.

GOLDMAN SACHS SPRING SECURITIES PROGRAM

One of the most selective and popular ones is the Goldman Spring Securities program during spring break. This one was launched about 4-5 years ago. There are about three rounds of the program - depending on when spring breaks falls for each school. Each round has about 8 to 12 interns, for a total of 24 to 36 participants. In the past (2007-8), students came from Harvard, Princeton, Yale, Stanford, Brown, MIT, UChicago, Columbia, Dartmouth, NYU, and Cornell.

HOW TO APPLY

GS specifically recruits at the above schools. After one round of on-campus interviews at the above schools, they made offers.

If you don't go to the above schools, you can still apply online via their website. Before anyone asks, we didn't know of people who got into the program without the one round of on-campus interviews. So if you don't go to the above schools, I'd suggest getting in touch with a recruiting contact who can field questions about applying for the program.

The interview was not incredibly technical in nature. It was most, if not all, fit. Of course the interview questions will vary depending on one's background, but on the whole, our impression was that this program is seen as a way of attracting high-achievers before junior recruiting. More than 75% didn't have prior finance experience.

HOW TO DO WELL

This advice applies to securities internships in general:

1. Ask LOTS of questions. As you can only learn so much in one week, it's most important to be interested in all things finance - ask insightful questions!
2. Read the WSJ, NYTimes business, DealBook, and other resources. A lot of doing #1 well is by following current events - and asking intelligent questions when you're doing desk rotations.
3. Jot down questions and thoughts after each day's sessions and prepare questions for your next day's rotations. Have something substantive to say at each moment throughout the day - it will make you stand out.
4. Be friendly to the other interns. You don't have to be best friends, but it doesn't help to make enemies either (no matter how stiff the competition is). Each intern rotates through the same desks in a different order - and it's ideal to have a sense of what to expect if you can compare thoughts and experiences with others prior to your turn on a specific desk. Also, there isn't a quota on the number of returnees to the bank for the summer, so you and others can both do well by being strategic. Also, there is an end-of-week team project. The teams that did presented well had good team-players; those with big egos did not receive a return offer.

WHAT YOU CAN GET OUT OF THE PROGRAM

• Usually 1-2 interns were asked to go back for the summer after their sophomore year to a certain desk. These interns hit it off really well with a certain desk and were placed on that desk for most / all of the summer. This goes to show that fitting in with the culture is a huge deciding factor in converting the spring internship to a summer offer.
• A few interns received summer offers for the summer following junior year. These students generally had a good grasp of finance and fit in well with the securities team, but still had a few developmental areas (learning more finance, taking accounting, etc.)
• Most interns received a guaranteed final round interview for a junior summer internship. This is an accelerated interview prior to the traditional recruiting schedule. These interns really had to get up-to-speed on general finance knowledge.
• Regardless of the outcome, the spring internship is a great opportunity to make connections with senior people. We know of interns who received an accelerated interview -- they kept in touch with VPs and MDs, who helped them prep for the final round and vouched for them with HR. Those who used their connections ultimately landed the offer.

POINTERS for Resumes and Interviews

We've reviewed many resumes in the past few months, for those who are going through full time and starting summer internship recruiting. We've noticed common mistakes that are repeated over and over.

Here's a list of what to do and what not to do:

1. DO Detail your individual contributions on past projects, while giving the overall scope of the project.

2. DON'T use technical jargon that you don't fully understand and don't know how to explain - put bluntly, if you use language you don't know, you will look stupid and pretentious. You'll get the automatic ding.

3. DON'T sell yourself short - play up those experiences you learned the most from. 95% of the resumes we've seen can be made stronger by detailing and focusing on the results of your work.

4. DO be prepared to talk about any gaps on your resume

Example 1: If you only list your major GPA - which is fine for the resume screening round - be prepared to give compelling reasons why your cumulative GPA isn't as hot.

Example 2: Behavioral questions will often include describing your role on a previous experience. Interviewers will probe you on any past experience - and you need to know how to go into an easily understood, detailed account of how you performed. Otherwise, if you come off as insincere, you'll get the automatic ding.

5. DO Realize that perception is reality - Your resume needs to be in top shape. If you have poor choice of words, shoddy layout, unorganized descriptions, and no story behind what you're after -- interviewers will think your work will also be of low quality. You'll get the automatic ding.

Fall Recruiting Season

If you're a senior, you are probably in the middle or near the end of the fall cycle recruiting.

At many target schools, the number of finance positions being offered is much higher than last year. You all recall what happened last fall - the shotgun marriages, the last minute bankruptcies, the government bailouts. This fall has spared us a similar bloodbath.

Last year at this time, only two or three banks bothered showing up at one target school that was traditionally a core school. And the positions offered included back office (technology, finance). Of course there were interviews handed out for front office roles, but hiring was down. If someone didn't have connections, prior internships at a bank, or a winning resume, it was very hard to land a position.

And the verdict is out on fall recruiting season

Things have turned out better so far this fall. It might be helpful to provide a glimpse into the numbers and types of positions that seniors can currently apply for at one target school:

Finance

- Goldman Sachs: Banking, Securities, Private Wealth Management, Asset Management, Technology, Operations

- Morgan Stanley: Banking, Wealth Management, Asset Management, Sales & Trading (Note that MS's hiring numbers seem to be relatively high)

- Deutsche Banking

- Barclays Banking

- Citi Sales & Trading

- Merrill/BOA Banking

- UBS Banking

- BMO Banking

- William & Blair Banking

- Banking at boutique firms

- Hedge fund positions: DE Shaw, Bridgewater, among others

Consulting

As for consulting, McKinsey / Bain / BCG saw record applications last year - they're hiring was hit but not as hard as finance and banking. As for the current hiring climate, the target class sizes have fluctuated but word on the street is that MBB and other consulting firms are looking to hire normal numbers of analysts / associate consultants (or not that much lower). Salaries are also in line with the previous year.

A frequently asked question

Is it better to do banking or consulting in this turbulent climate?

- The answer would of course be a personal one, but it turns out that those who were previously only interested in banking and finance have now turned their attention to at least consider a consulting gig. One look at the numbers would explain the increased incentive to look at consulting:

The average consulting week is 60-70 hours, with many weeks at ~50 hours or even zero hours if you're on the beach. At a $65K base salary, that comes out to a pre-tax hourly income of ~$20. Accounting for a moderate bonus of say $10K, which brings total income to $75K, the pre-tax hourly income is ~$24. Not too shabby.

The average banking week is still 90-100 hours, despite the recession. At a $65 K base (not counting bonus), that comes out to a pre-tax hourly income of ~$14. Accounting for a moderate bonus of say $25K, which brings the total income to $90K, the pre-tax hourly income comes out to ~$19.

So on the margin, it doesn't make a whole lot of sense - at least salary-wise - to do banking.

The other considerations that influence your decision would be: 1. What skill set you want to build 2. Culture and office environment and 3. Your long-term career aspirations.

Let's address these one at a time...

1. What skill set you want to build

- Consulting: access to high-level management of fortune 500 companies, presentations to senior executives, and work that spans everything from finance to outsourcing to human resources. There's also exposure to M&A work, if that's one of your draws to doing banking, though of course in consulting you would only be advising and not executing.

- Finance: Hands down winner if doing valuations and tweaking excel models makes your heart sing like a hummingbird. More seriously though, finance will give you recognized "hard skills" that are readily transferable to another finance gig. If you know you want to do finance, and that you have no other ambition in life, then working at a BB or another finance firm is the way to go.

2. Culture and office environment

- Consulting: collaborative, generally no-yelling and a civil atmosphere. Depending on your team and firm, there can be a greater focus on work-life balance (except when on traveling cases). Also, encourages creativity and at times entrepreneurship, depending on the type of project.

- Finance: Can be cut-throat and demanding, but the excitement of being on a live deal or doing a live trade often compensates. The rush of working on a market transaction is incomparable. Team environment can be tense, and as an analyst you are an office monkey. So ponder the up and downsides!

3. Long-term career aspirations

- Consulting: Exit ops run the whole gamut - from entrepreneurship (this site!) to public service to further professional training (business, medicine, law). You name it.

- Finance: Exit ops can run the whole gamut but generally IBD or trading sets you up for a more senior position at the firm (with the option of direct promotion from analyst to associate, sponsorship for business school upon the completion of which you would return to the firm), the transition to a smaller firm that pays better and treats its employees better, or a complete exit from the industry to do something else.

There are obviously a lot of differences between the two industries, but at the same time they do attract similar people: smart, driven, ambitious, type-A early twenty-somethings.

As always, feel free to send your queries our way. Happy recruiting season!

A recap of my IBD internship at a bulge bracket

Hope everyone had a great summer wherever they were and whatever they were doing.

The last 9 weeks of my internship were intense - we are in a tough deal environment but life was busy! I had no more than 1 day off the entire internship. But with hard work came a great learning opportunity -- I can now understand the three financial statements inside and out, and know how to build an accretion/dilution model. As a policy major, I've never had to do this in classes so for me the internship taught me not only finance but the importance of professional presence. I was contributing my ideas on market trends and economic forecasts during meetings with MDs. I have had experience presenting policy briefs and defending my work in my courses and past internships, so my presentation skills were readily useful -- as my HR reviewer highlighted to me, being straightforward and logical in presenting my insights to bankers is what got me the full-time offer.

There's already a wealth of information out there about what a banking internship is like, but I have found that many resources don't detail what makes or breaks whether an intern receives a full-time offer.

Here's a quick list of the tips and tricks my mentors told to me over my summer -- reminding myself of the following definitely made me confident and composed in my internship:

1. Your supervisors during the internship are judging interns on their ability to pick up finance quickly. This is fundamental to the job - get the model right, ask questions when you don't understand, and do everything better the second time. Don't let mistakes inhibit your ability to perform well -- every intern had errors in their work but it came down to whether interns learned how to improve upon their work.

2. Bankers may take out their frustration or stress out on interns but always remain poised and confident. One time I followed my associate's directions, but I was still yelled at because he realized it was the wrong path to follow -- I responded by being as resourceful and helpful as possible, helping the associate outline the correct next steps. I cannot overemphasize how important it is to have a positive attitude -- interns can bring energy and leadership through their willingness to help.

3. Find a few bankers in your industry / product group who will act as your mentors -- they can make your experience better by requesting you on their project teams. And they can feed you the "inside knowledge" in the group so that you can try to work with people who you click with.

4. There is an element of randomness to the people you work with over the summer, and it's hard to change that if you don't get along with your team. Thus it's very important to do your due diligence - speak with other analysts and get to know how MDs and your direct supervisor like to work - that way you can maximize your chances of getting great feedback from those who write your reviews.

Also, from the flurry of on-campus firm presentations, it is all too clear that full-time recruiting is in full swing. Many requests for resume reviews have come in, and we'll be posting more regularly in the next few weeks (especially with interview tips for full-time interviews).

I'd also like to reward our loyal readers with a freebie given our long break (we were busy at BBs for the summer or working full-time at MBB): The staff will give a free critique to the first three people who 1. share a notable anecdote from their summer in finance/consulting and 2. send along their resume. Send them to breakingbankers@gmail.com (for finance) and chasingconsultants@gmail.com (for consulting).

Recession Special: My first weeks at a bulge bracket i-bank (Summer Analyst series continued)

So it's been a while since my last post. I've been getting questions from readers, and I'll be answering some of them in the end of this update.

As for what I've been up to, my industry group has been getting smacked with deals right now. The VP on the team I'm a part of has called the deals 'Recession Specials'. I haven't had a day off since I started!

I had my first major technical challenge the other day: I had to spread comps and synthesize the main points of the company's financial history in a few powerpoint slides. Spreading comps took about one afternoon (without Excel shortcuts it could have easily taken double that). I then looked through the 10-K's and 10-Q's of the company to construct the financial history and outliers. I researched the company's competitors to get an industry overlook and to put the company's history into context.

My other technical task was tweaking the DCF sensitivity and LBO model. Luckily I haven't had to build one from scratch yet. I became familiar with the style of the models and where to update the inputs (discount rate, free cash flow for each year, etc).

Other miscellaneous responsibilities I had during the week: print out powerpoint decks for in office meetings, schedule conferences with the client, flip pitchbooks (see that no errors in printing), and ordering dinner for the team through Seamless Web (an online listing of NY restaurants that deliver dinner to the lobby of the bank).

It hasn't been all work. There's been quite a few networking events - I got to listen to prime brokerage traders, risk management heads, and the merchant banking group. And, there's been a ton of coffee visits and happy hours to get to know people I don't directly work with. I realize that networking was always very important, and I think it can be crucial in getting a full time offer. I still am not sure if I want to do finance for full time, and speaking with more people has got me thinking about other divisions besides IBD.

Some questions from readers:

1. What kinds of work experiences did IBD interns have before this summer?

I myself had no finance experience. Only 3 of the other interns (the ones from undergrad business schools) in my group had direct finance experience (at a bank) before this summer. The other interns had very varied experiences - nonprofits, legislative aide, teaching at high schools, journalism (to name a few). Previous finance experience is certainly helpful, but by no means necessary!

2. Were there any common themes among the resumes of the interns in your IBD group?

Yes - despite the diverse array of experiences the interns in my group had, some common themes include:

• Campus leadership - class presidents, founders of clubs, student leaders that were university appointed to committees
• Good academic background - most above 3.5 (with a few around 3.0).
• Strong public speaking skills - demonstrated by leadership and strong academic records. Good public speaking is needed to convince clients of your results and findings, to "sell" the banking team and its recommendations to clients! I am confident that my public speaking helped me tremendously during the interview process (my interviewers remembered me and reached out to me in my first week to see how I was settling in)

There's also a great post on the main takeaways a resume should present - scroll through the previous tips! It is spot on in terms of how interviewers / resume reviewers screen resumes.

3. How has the banking culture changed over the past year, in your opinion?

This is difficult to answer without specifics, but generally I can say that bankers have mellowed out due to the economic downturn. The analysts I'm working with say that a lot of the top management (VP and higher) are now more wary about the security of their jobs, and that they have lightened up a bit. Everyone is extremely hardworking still, and put in just as much (if not more) effort into their jobs, but people tend to be cognizant of others and the needs of their teams. As you get more senior, my understanding is that maintaining a work-life balance in banking becomes more manageable. But after all this is still banking, and it continues to attract the same types of people - type A, competitive, money-driven.

Feel free to continue sending your queries to breakingbankers@gmail.com and chasingconsultants@gmail.com