Question: I really want to go into finance when I graduate next year. I know the situation is bad, but there have to be some jobs available. How can I make myself more competitive?
Answer: To get the inside scoop on jobs in finance, Sheila Curran asked an expert, Dr. Emma Rasiel of Duke University, for her opinion. In this article, Dr. Rasiel shares insights and essential strategies for graduating seniors.
Sheila Curran: We’ve heard a great deal about problems in the banking industry which are anticipated to continue in 2009. How has that affected opportunities for new college grads, particularly in the highly-coveted investment banking positions?
Emma Rasiel: Unquestionably the number of available investment banking jobs will be much smaller. The investment banking industry, and more generally the economy, are expected to continue to contract over the next several months. Along with these changes come inevitable layoffs at all levels of the financial industry. While the banks are expected to continue to hire new college grads, they will inevitably hire significantly fewer.
Sheila Curran: Which students still have a shot of being hired this year? What characterizes their background, experience or skills?
Emma Rasiel: Students will need to demonstrate more clearly than ever their genuine and longstanding interest in finance, as well as evidence of considerable preparation. In order to get interviews, students’ resumes will need to indicate academic excellence in a quantitative/analytical field of study, relevant extra-curriculars, and ideally some finance-related work experience. The era of “taking a chance” on a student with limited relevant background/coursework/experience is over.
Sheila Curran: Are there areas within investment banks that are easier to enter than others?
Emma Rasiel: As always, the banks will hire more students for Banking and Sales & Trading than for other areas (such as asset management or research). But I think that the supply of available jobs in all of these areas will have shrunk.
Sheila Curran: If students have the required background and experience, how can they separate themselves from the pack and get the job?
Emma Rasiel: Take the time to read the Wall Street Journal every day and follow the significant stories so that you can talk intelligently about them in interviews. Try to get an understanding of what has been happening over the last few months, and ways in which it has affected the industry. There are almost daily stories about the credit/liquidity problem in the news media—read broadly on these, and start to develop your own view of what went wrong. Some possible explanations include:
- Greenspan’s loose interest rate policy in the first few years of this decade, following the dot-com boom and bust.
- The erroneous belief across both Wall Street and Main Street that house prices would always go up.
- Predatory lending practices
- Political short-sightedness in urging Freddie and Fannie to broaden their range of what is “acceptable” borrower income and documentation for a home loan
- Advances in financial technology, permitting ever more complex and opaque financial securities.
- Lack of accountability at each level of the lending-securitizing-investing chain.
An ability to talk intelligently about all of these issues, and even better, to have a view on which were essential precursors vs mere exacerbators, will give students the wherewithal to differentiate themselves in interviews.
Sheila Curran: What advice do you have for sophomores and juniors who are hoping to join investment banks after graduation?
Spread your net far more widely than just “traditional” investment banking! The number of available jobs in the “big banks” has shrunk considerably, but there are other finance jobs out there, in which you can learn similar skills and still get your career off to a great start. Think about mid-market investment banks, private equity, asset management, hedge funds. It will be harder to find jobs in these institutions, since they are less likely to recruit on campus, so you may have to do your own primary research:
- Who are they?
- Where are they located?
- What is the application process?
- What skills/experience are they looking for?
On the plus side, students who are willing to go to this extra effort will then clearly differentiate themselves from students who simply wait for these firms to show up on campus—if they do so at all.
Dr. Emma Rasiel is a Professor in the Economics Department at Duke University, as well as the Associate Director of Undergraduate Studies. Professor Rasiel completed her PhD in finance at the Fuqua School of Business, Duke University, in 2003. Prior to beginning the PhD program, she spent seven years at Goldman Sachs, including five years in London as a bond options trader. She holds an MBA from the Wharton School, University of Pennsylvania, and an MA in Mathematics from Oxford University.