5 Reasons Why You Don't Get High Finance Jobs
Do you want to be a front office employee on Wall Street, but all you get is ghosting and rejections and all you do is vent on finance forums? Well, I want to solve that problem.
Today I will share with you the top 5 reasons why you are failing to break into high finance.
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You Don’t Know What You Want
You just want to make big money, but you don’t do your homework on which path is right for you.
Working in finance is not like going to a Chinese restaurant that also serves Thai Food and sushi or even Korean BBQ.
Investment banking and equity research are entry points. The holy trios of high finance, private equity, hedge fund, and venture capital are closed to almost of all of you right out of college. You need to know these things.
Otherwise, you are just another wannabe who doesn’t want to put in the work to know the rules of the game. And we all know those types will be stuck in the back office their entire career without knowing why they never made it to the front office.
Your interviewer cares and they don’t care whether you are pursuing multiple paths at the same time. They want to hire the best absolute talent who is most committed to their specific profession. And it’s shockingly easy to weed out those who don’t know what the hell they are talking about.
Let’s share with you my experience: Everyone who has done an MBA knows there are always a sizeable of incoming MBA students with zero clue of what they actually want to do, so they recruit for both investment banking (IB) and consulting, which have the most grueling recruiting processes with multiple rounds of technical and fit interviews, and super days and some wine and dines but are really also fit interviews.
Imagine doing that whole 2-3 month process for 10+ banks and 5 consultancies. First, it takes stamina and second, you are unable to present the best version of yourself consistently in front of any of them. So these candidates almost always end up getting no offer. The same will happen to you if you don’t figure out what you actually want to do.
I know you might also be suffering from the “grass is greener” syndrome.
You want a hedge fund job for the quickest path to money, but you know private equity provides more stability and rigid progression.
Let me just stop you right here by saying they all have trade-offs. Pick one path that fits your top search parameter. If you want some predictability, pick the IB to PE path. Just know you have to live with all the negatives associated with those two professions.
You Are Not Liked
High finance is a sales job. Unless you have a physics Ph.D. from MIT doing some quant finance, you are dealing with people.
You need to be likable.
I remember an international kid in my MBA class. Let’s call him Mike. The first time I asked Mike what he is recruiting for. He is like “Investment banking or nothing, man. I’m all in on Investment Banking.” I knew he wouldn’t get an offer, but it’s too cruel to crush his dream literally two weeks into his MBA.
Mike can’t strike up a conversation, because all he talks about is European soccer. I remember going to IB internship recruiting events, for the free food of course. And I saw Mike just standing there looking nervous in those banking circles and struggling to strike up a conversation with any senior banker. I was like “man, this is not looking great for him, but these wings are steak sauce though.”
Not surprisingly, he did not receive a single IB internship offer. And this is a guy who is US-educated (at a public target) with a 3.9 GPA. So clearly credential was not his issue.
But he kept missing the point that everyone can rehearse the crap out of 500 technical interview questions. The tougher part is adapting and making a pitch that you are someone your future colleagues can imagine grabbing a drink with and someone they can put in front of the client’s CEO and CFOs.
I saw many of my classmates fail to break into finance because they don’t assess their personal fit. I have worked at two investment banks in equity research, I am going to venture an extrapolation that it’s the same across Wall Street that it’s mostly white people, specifically white men. I remember walking down to the trading floor with my teammate and all the salespeople are capable of talking about is golfing and skiing. Just tells you how NOT diverse it still is on Wall Street.
I am not a white man, but I am adaptive and I am good at making people like me. And it’s not the best candidate that gets the job, it’s the one that sells the best and is liked by everyone. If you want to work in the US in high finance, make an effort to adapt. There is no textbook way to do it, I just happen to like NFL and NBA and I do love watching movies / TV and playing video games.
Especially to candidates pursuing a career outside of their native country, be open-minded and adapt. Maybe it’s easier for me because I am Asian and live in the US and speak multiple languages.
If you are struggling to get into finance because of people skills, you need to think about whether you are fit for the profession. Yes, at first you will be an Excel and PowerPoint monkey, but firms hire a lot of you in hopes of finding a bunch who do have the potential to start bringing in businesses for the firm and that’s where you make the big bucks. So they are ultimately hoping to find exceptional salespeople.
Your Expectation Is Too High
Everyone wants to date George Clooney or Miranda Kerr. I hate to tell you this, but your resume probably doesn’t look like one.
So you need to get rid of the “Tiger Cub, Goldman Sachs, Blackstone, or nothing” mentality.
Can you be that outlier that made it into them from an ultra-non-target? Maybe? What are the odds? Let’s be real – very low.
When I see folks asking about how to get into Tiger Cub hedge funds on online forums over and over and over. I am like “Go on LinkedIn, and search for all the research analysts who have ever worked at Viking Global. How many of them have a non-target background and worked at a middle market bank? NONE”. There, you have your answer.
Instead of wasting time fantasizing, how about working on your skills, casting a wider net, and getting your own seat at a place where you might actually be a better fit?
And the most elite firms are not necessarily the best place for your career. If you can’t strike up a conversation about your prep school life and that secret society they were all part of during their Ivy League school days, I am not sure whether you enjoy working in that kind of environment.
And I can assure you: you can make big bucks in finance or any field without having to work at those firms. If you found the right fit and met the right mentor, you will grow and hopefully create a ton of value for your employer and capture some of the value you created. Should you want to capture the majority of your value, you can even start your own firm down the road and build your own brand. Maybe future generations can fantasize about working for your firm.
Of course, if you insist on pursuing prestige and a brand name just to compensate for your low self-esteem, you have a bigger problem to deal with.
You Love Getting Badges
No amount of exams, certificates, and diplomas can dramatically change you as a talent intrinsically. If you want to upskill, I prefer you go follow good YouTube channels (just saying) and read great books.
I notice the prevalent mindset of “Oh, I am not having success with my job search, so I plan to take CFA, CAIA, CPA, FRM, and maybe do an MBA, and while I am at it, maybe do a CIA and FBI.”
I think you are better off literally becoming a North Korean army general, at least you get a cool uniform. And I can’t speak for others. I will definitely give you an interview just to hear what is it like to be living in the most repressive country in the world.
If you are having trouble landing finance roles, I highly doubt the reason to be lacking this certificate or that degree. You don’t get a job because of other reasons I shared in this article.
More exams could improve interview chances, but a professional designation is a very low barrier to entry because everyone else can at least pursue it and tragically many do, so in the end everyone has that designation and no one stands out. But the exam sponsor (like the CFA Institute) can’t lose, they are like the casino and the stock exchange.
In my view, the opportunity cost of time is too high because you could be spending that time gaining more targeted knowledge and networking to source jobs.
Remember: A job lead has the highest barrier to entry if you are the only candidate. And that’s obtained by networking, not by getting badges, which leads to my next point.
You Don’t Go Direct
I had a really bad GPA as an undergraduate. No one gave me a chance. I needed to control my destiny by going direct to hiring managers. Thank god I was born in the LinkedIn era, and LinkedIn was where I got my first internship and all my other jobs. And even to this day, I have never applied to a single job on the company career portal until I have gotten the interview already.
Perhaps I started that direct-to-customer trend before the Warby Parker and Casper of the world did.
The HR and the robot resume reader will always screen out the resume with a good school, high GPA, and relevant work experience. You won’t win the game by going through the front door.
Lucky for you, tons of the non-targets with subpar GPAs and irrelevant work experience have hustled their way into high-finance jobs.
If you don’t think you have a competitive resume. Stop applying, start networking.
Leverage your network, LinkedIn, and unconventional channels. Find out who is the hiring manager, remember LinkedIn is a search engine, if you are resourceful enough, you can find those “I am hiring” status ribbons on someone’s profile.
I heard this great line “no one is above cold emailing.” Even some elite private equity firm is known to have juniors cold-calling to source deal targets. Start reaching out to people and get used to rejections.
2 Bonus Tips
I will help you with two examples, and let you take it from here.
If you don’t have functional experience, an internal candidate is not more favored than external candidates.
For example, if you want to work as an IB analyst and you are working in the back office or middle office at a bulge bracket investment bank, you are a less competitive candidate than someone working in middle market investment banking.
I have seen many questions around “so I really want to work as a research analyst at a mutual fund. Should I accept the offer to work in trade support at a mega mutual fund over the offer to work as a research associate on the sell side? No, you should not. It’s not an easy move to go from back office to front office even as an internal candidate.
By that argument, it should be easy for the waiter working at the same restaurant to get a chef job over a chef at another restaurant, right?
So the takeaway: Function over the firm. Always think about what skills you need to acquire to reach your end goal and pick a role that equips you with as many needed skills as possible, even if it’s at a lesser firm. When people hear you work in compliance at Goldman. No one will remember you work at Goldman. People will only remember you are working in compliance.
And then some very rudimentary stuff. I still see a lot of people not knowing the need to do investment banking before getting a look for private equity associate roles. Here, know that. Unless you are doing something esoteric roles in PE, you need investment banking experience. Even if you go for an MBA, you need to be an IB associate first before gunning for private equity. That’s not negotiable.
Thanks for reading. I will talk to you next time.
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