Finance 101 - Finance, Banking and Investment Society
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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