Last week, Davidson Alumni John Laughlin ’85 and Jay Harris ’90, both managing directors at Wells Fargo Securities, hosted “Investment Banking 101,” where they shared their expertise on breaking into the profession. The session, attended by approximately 25 students, highlighted the customer-centric business model of the investment banking world, where one works to give strategic and financial advice and manage the flow of capital.
Here are some tips that Laughlin and Harris provided during their talk:
1) Investment banking requires analysts with strong mathematical and evaluation skills who are willing to work in an environment that demands high performance and precision and committed to work about 80 hours per week. Employers look for analysts who come in ready to learn and problem solve.
2) A typical investment banking path would involve working as an Analyst for 2-3 years, then becoming an Associate for 3 years or leaving to obtain an MBA. Eventually, some investment bankers can move into the Vice President position for 3-4 years and then become Directors. However, just after performing as an analyst for 2-3 years, people are well suited to enter other professions, such as working in hedge funds, other types of banking, or even law.
3) Investment banking can be easily confused with sales and trading. Investment bankers work directly with customers such as large corporations, global banks, or private equity firms to research and provide financial advice on specific industries of interest and then suggest solutions to making the smartest investment decisions. The sales and trading profession works directly with the distribution of equities and loans and physically makes the investment trades, which investment bankers might advise.
4) Within investment banking, people tend to specialize in either coverage or product. Coverage specialists spend time becoming experts in multiple industries in order to give financial advice, while product specialists become experts in the products, such as fixed income, equity, or risk management solutions. Similarly, analysts will become experts in either Mergers and Acquisitions, Debt Capital Markets, Equity Capital Markets, Industry Groups, or Financial Sponsor Groups.
5) NOW is a critical time for students thinking about breaking into the investment banking profession. The internship application process begins in October and November, where applications are accepted and reviewed. In December and January, firms will conduct 1st and 2nd round interviews via the phone or in person, and offers are extended in February. Although lots of people tend to secure investment banking jobs after completing internships the summer after their junior year, jumping into the profession is still possible once you are a senior. Laughlin and Harris urge students to network extensively in order to find these job opportunities, and go into interviews extremely prepared. This includes researching the company extensively, knowing your resume very well, and having questions to ask the interviewer. Always dress conservatively and bring a portfolio (not a backpack!) with paper, pens, and extra copies of your resume.
Students with questions about steps they can take to make themselves more competitive for investment banking opportunities are encouraged to visit the CCD.
Thanks to John Laughlin and Jay Harris for an informative and timely presentation!