If you want to make it in investment banking, do you need to have qualifications coming out of your ears to stand out from the competition? Or is it more important to have gone to the right school and know the right people?
In an advisory function in investment banking, historically qualifications would have been secondary to connections and the university you attended. This is changing – not only has the financial crisis highlighted a need for higher professional standards in banking, but a new breed of graduate recruit is emerging.
Now, those securing the plum jobs in investment banking have multiple internships, they have Masters in Finance degrees, they have led investment societies at university and have often taken it upon themselves to start the CFA exams.
Our own research – based on analysis of 1.2m finance professionals on our CV database – shows that junior investment bankers being hired are better qualified than those at the top now.
A higher proportion of managing directors in M&A and capital markets positions have MBAs than any other rank, but juniors come equipped with more technical qualifications.
A hefty 46% of analysts have either an MSc in Finance or Masters degree, compared to 24% in MD roles. 40% of associates also have Masters degrees and the proportion of people equipped with post-graduate qualifications declines as investment bankers become more senior.
Meanwhile, from analyst to VP, 21-23% of investment bankers have embarked on the CFA qualification. This figure shrinks to 15% at director level and just 11% at MD.
The implications of the research are that in order to break into investment banking now, new recruits have to display greater technical know-how than ever. Meanwhile, if you want to make it into the senior ranks, an MBA certainly helps.
Oh, and for all the talk of investment banks being forced to hire ACAs into their advisory functions at the junior level to tackle a skills shortage, the proportion of accountants in front office investment banking jobs remains tiny at all levels.