February is interview season as analysts who leave investment banks after bonus cause a large reshuffling of financial jobs. Investment banking analysts leave for equity research, private equity and corporate banking. Equity research associates leave for investment banking and hedge funds.
Smaller banks, boutiques, asset managers and transaction services shops (Big 4 Accountancies) will hire for summer positions around this time as well.
A lot of candidates have come to me for advice, and I have noticed two major problems that come up repeatedly. They are variants of the following:
- Are you interviewing for any other jobs?
- Where do you see yourself in five years?
Are you interviewing for any other jobs?
This advice is standard across investment banking career blogs – you are only interested in banking if you are interviewing for a banking role. You are only interested in equity research if you are interviewing for an equity research position. You need to have your story down pat, even if it isn’t necessarily true in this case.
If you need to lie, you lie – otherwise the interviewer is understandably uncertain about whether you will stay in the role. Turnover is not cheap, and that uncertainty is as good of a reason as any to nix a candidate. For on-campus recruiting, it is common for investment banks to immediately cut a candidate if they are found to be interviewing concurrently with management consultancies (alumni networks are wide and news on the grapevine travels quickly).
If you are unable to communicate that you want the position you are interviewing for, why are you even there? You are wasting both the interviewer and your own time and will likely be blacklisted, which could be ruinous if you decide later that you actually do like equity research (a lot of bankers switch into ER, and vice versa). It doesn’t matter how well the rest of the interview goes, even if you are the best technical candidate.
Presumably, if you are interviewing for a job – you feel that the position you are interviewing for is beneficial to your career. If you land the job, even if you would like to have a career in another group instead, you are better off during the time you are in this temporary job (quality of work experience, lateral opportunities). It is also entirely possible you enjoy the role more than you expected and stay on.
If you feel guilty, commit to putting in your best effort to add value during the time you are there. In the end, no one who matters will begrudge you for choosing the best option for yourself provided you do it with tact and respect. We have certainly seen the wrong way to leave an organisation (lots of bridges burned), and we have seen early exits where temporary workers are remembered fondly (hint, buy some chocolate).
Where do you see yourself in five years?
Most interview guides claim that associates are expected to be certain and become career bankers or career research professionals. Meanwhile, analysts can say they are not sure because the analyst program to MBA is expected. This is where the advice is different for Canada (and increasingly, US banks are copying this model).
In five years, you see yourself as an associate or a Vice President, period. You need to communicate that banking is what you have always wanted and that you want to develop in the firm until you reach a revenue generating position.
Banking is more glamorous than private equity in Canada, in part due to the presence of pension funds tied to government – compensation is materially higher in investment banking. The pension funds are perceived to be softer career choices which many junior bankers nonetheless exit to due to burnout, so bankers perceive any sort of waffling on this answer to be a sign of a future exit.
Again, attrition is very high in the industry, and has been exceptionally high in the last few years – very much due to hiring people who do not really want to do it, but know how to go through the motions. A lot of bankers do not deserve to be there – they cannot necessarily get a trial run of your aptitude as an analyst before you start, so other than the technical screens, the only benchmark is your passion.
With these two in mind, happy hunting.