Transcript Finance 101 - Finance, Banking and Investment Society

EXECUTIVE BOARD
President-Anna Mayr
 Exec VP- Sam Pulitzer
 VP of Finance- Jeff Williamowsky
 VP of Administration- Matt Captline
 VP of Marketing- Matt Bromiley
 Corporate Liaison- Josh Pupkin
 SUSA Rep- Paul Abel
 FMA Rep- Webster Hughes
 Webmaster- Eric Kuang

FINANCIAL CONSULTING

Advise corporations on financial issues
Review business plans and decisions
 Suggest methods to improve valuation
 Assess business and capital structure
 Provide useful advice for

Risk management
 Government regulations
 Industry trends


Provide independent evaluation of potential
options
FINANCIAL CONSULTING
Profitable industry
 Intense travel schedules
 Team-oriented environment
 Major firms





McKinsey
Bain
Boston Consulting Group
Deloitte
FINANCIAL ADVISORY
AKA financial planning; help clients select appropriate
assets
 Education: Pass the Series 7 broker/dealer exam;
possibly obtain CFP designation and/or MBA
 Responsibilities: Find clients and help them
understand investment opportunities; monitor
markets and make quick decisions; have strong people
skills and be able to sell your ideas; initially work long
hours to find clients
 Pay: According to BLS, as of May 2009, median
compensation was $68,200; top 10% earned over
$160,000; financial advisory is very strongly
commission based

WEALTH MANAGEMENT




Combines financial/investment advice, tax services, and
legal/estate planning; financial advisory for clients with
higher net worth; often employed by banks and investment
firms
Education: Pass Series 7 exam; possibly obtain CFP
designation, law degree, or an MBA
Responsibilities: Find clients and provide them with
personalized advice; sustain and increase clients’ wealth
over time and help them plan for the future; after clients
have been acquired, work as long as it takes to meet their
needs
Pay: Typically between $65,000 and $85,000; once again,
strongly based on commission
THE “BIG FOUR”

All firms offer areas specializing in finance

PwC – Financial Consulting



Deloitte – Financial Advisory Services


Business valuation, forensic center, capital projects consulting
Ernst & Young – Advisory for Financial Services


IPO readiness, risk & capital management, finance function
systems & applications
Financial Instruments & Credit Group (FICG)
Performance improvement, risk management, capital &
transaction management
KPMG

Private equity consulting, banking & finance restructuring
THE “BIG FOUR”
Work Load
•Internship: 10 weeks, 40-50 hrs. per week. Limited responsibilities, but very
informative
•Full Time: 50-60+ hrs. per week, specific responsibilities. Travel may be
involved.
Salaries
•Internship: $23+ per hour
•Full Time: Many factors influence, but median starting salary is $59,000
(2010)
Career Paths
•Pre-defined track in each company.
•Analyst – Consultant – Senior Consultant – Manager – Senior Manager Director/Partner/Principal
Culture
•Culture is important aspect in all companies
•Intra-company clubs, community service activities
•Important work/life balance through telecommuting, on-site options
•Continuing education – Tuition/Certification options for all employees
THE “BIG FOUR”
Pros
• Company focus on culture
and employee development
Cons
•Long work week
• Great starting salary
• Not as much responsibility
as smaller firms – client
restriction
• Continuing education
options
• High internal and external
competition
•Career path is laid out
• Geographic restrictions due
to clients
SALES AND TRADING
SALES AND TRADING
Is Sales & Trading Right for You?
 Skills/Traits Needed:




Highly focused
Excellent quantitative skills
Thrive in fast-paced, stressful environment
Ability to multitask & prioritize.
SALES AND TRADING
Exit Opportunities
 Few Exit Ops outside
trading
 Can move up the ladder
 Trading at Hedge Funds
Professional Areas
 Sales
long term client
relationships
 Present investment ideas
 Sell and cross sell firms
products


Trading
Develop and execute
trading ideas and analysis
 Market Making trade
execution process

INVESTMENT BANKING
Help companies raise debt or equity
 Advise companies

Mergers & Acquisitions
 Restructuring

Analyst, Associate, Director, Managing Director
 Analyst Responsibilities:

Presentations, Pitch books
 Valuation & Financial Modeling
 Industry/Company Research

*Investment Banking Interview Prep
http://investmentbankinginterviewprep.blogspot.com/2008/02/citigroup-profile.html
INVESTMENT BANKING CONT.

Pros
Deep understanding of financial statements and valuation
 Great exit opportunities (Private Equity, Hedge Fund, etc)
 Experience
 Salary (entry level: $90K- $150K)


Cons
80-100 hrs/week
 Hours vary
 Stressful

*Investment Banking Interview Prep
http://investmentbankinginterviewprep.blogspot.com/2008/02/citigroup-profile.html
*http://www.careers-in-finance.com/ibsal.htm
INTRODUCTION TO CORPORATE
FINANCE




Responsibility - Corporate Finance addresses the following three
questions:
o What short and long-term investments should the firm engage in?
o How can the firm raise money for the required investments?
o How much short-term cash flow does a company need to pay its
bills?
Early Career Path - Many firms hire undergraduates and MBAs for
training programs in corporate finance; some programs are finance and
accounting-specific, and others rotate trainees throughout the company.
Education - To advance through your career, you will eventually need an
advanced degree or certification (MBA, CFA, CPA, etc.) in addition to an
undergraduate degree.
Compensation - Corporate finance compensation will vary by seniority,
region, size of company, and industry.
o The median expected salary for a typical Entry Level Corporate
Finance Analyst in the US is $55,970, according to vault.com
CORPORATE FINANCE (CONT.)

Life Style: Hours Per Week depends on seniority, region,
size of company, and industry.
o Generally can be demanding for entry level positions
(anywhere from 60 to 65 hours per week)
o Jobs in corporate finance are relatively stable.
o Benefits of working in the field include:
You generally work in teams which help you work with
people
 Responsibility is to tackle business problems that make a
difference
 Opportunities to travel and meet senior people in
different industries
 Pay is generally quite good relative to entry level
positions in other industries

THE MBA

What: 2 year program

Admissions based on resume, GPA, GMAT scores,
work experience & essay responses

When: 3-5+ years after Undergrad

Why:
Exit Opportunities & alumni network
 “Reset Button”


Top schools:

Harvard, University of Chicago, Wharton, Stanford,
Northwestern, Columbia, Michigan, NYU, etc.
THE BUY SIDE: PRIVATE EQUITY & HEDGE
FUNDS


•

The Buy Side: No clients = less “fire drills”
Mostly only experienced hires & MBAs
Better pay & hours (sometimes) than investment banking
Private Equity:
Firm buys part or all of a company and later resells for a
profit
 Top firms: KKR, Blackstone, Apollo, TPG (more hours
here)


Hedge Funds:
Comparable to Mutual Funds but more advanced
strategies & exclusive
 Thousands of HFs in the US
 Positions: trading, risk management, quant analyst,
fundamental analyst

UPPER FINANCE COURSES
BMGT443 Equity Analysis & Portfolio
Management
 BMGT 444 Futures & Options Contracts
 BMGT 445 Banking and Financial Institutions
 BMGT 446 International Finance
 Lemma Senbet Fund

WHAT SHOULD I BE DOING NOW?
Get some sort of experience (business preferred)
the summers following your freshman and
sophomore year
 Start reading + become familiar with the terms!
 Learn about the industries…the vault guides are
a good place to start
 Fellows Programs

RESOURCES

Available on HireSmith (for free)
Vault Guides
 WetFeet

Mergers & Inquisitions (also have courses)
 Wall St. Journal
 Economist
 Investor’s Business Daily
