Just be aware of how competitive the industry is and that none of these things are a lock to get you a job or to keep a job. I’m have an MBA from a Top 20 B-school, a master’s degree in statistics, a BA in Political science, and completed the first 2 levels of the CFA. I also have worked as a buy-side trader for 3 years and an analyst for 2 of the top performing resource funds of the past 3 years and am under 30. I still am having a difficult time getting a job as a senior anaylst let alone portfolio management. The funny thing is part of the reason is there are actually people out there who are younger and better qualified than me. A lot of the industry is who you know until you get in a position to build a track record…And once you get to that point you better deliver or you won’t be there long. I should finish the CFA this year but just from talking to my peers I don’t expect to have anyone offer me anything much better than what I have now. The other thing to consider is the way the industry is headed. Look at the number of people in China and India taking the CFA…It represents 2/3 of the candidates. The way the industry is headed (And I got this from the Director of Research at Smith Barney) is for all of the Quant and analysis work to be outsourced to Asia where they can pay a CFA/MBA $35,000 instead of $90,000-120,000 a year here. The “Analysts” in the US will just be sales guys going around pitching the firm’s research. So the analytical side of the sell side will virtually vanish in the next 10-15 years which will make the buy-side that much more competitive. I don’t want to deter anyone from following their dream but the CFA is a lot of work…You are going to spend a minimum of 250 hours of studying to pass each level. A MBA costs a lot of money and will also take up a lot of time. So just be sure that is what you want and are o.k. if you bust your butt and still end up in sales because the odds are against you.
Holy Debbie Downer
right?!?!?!! that part about India is a little unsettling since it kind of makes sense to me.
didnt mean to bring people down but i wanted other people to input on this and gmake me feel better about passing level one
yes, for folks that just sit in front of a computer and crank stuff out, this will be the case. If your job, however, requires any social skills, communication skills, presentation skills, management skills, client interaction, etc, etc. then you are much less at risk. Quant jocks beware.
Geek analyst: “Somebody set up us the bomb!” Outsourced labor: “How are you gentlemen!! All your jobs are belong to us!”
Dude, this is very discouraging. I may as well walk out of this insane industry. Unbelievable
Indeed. Very discouraging. But again inevitable. So what are you going to do about it?
i do not know, but all i know is that in this industry, connections and network matter 90% and your education 10% and it is pity. Also, my friends from college who went for enginering and accouting, they all got the job they wanted without connection and they are all settled. But in this crazy industry, you need to have million college degrees and you need to know million people working in the same industry and you need to work million times harder than other people to just fit in.
damnit someone say something encouraging.
Work in sales, the meals are way better and you’ll love your handicap. Believe me.
>>damnit someone say something encouraging. I work for a company that outsources equity research work to India and I think this fear about outsourcing taking away equity research jobs is a bit irrational. People sitting here in India and not talking to company managements are not going to get the kind of industry insights that an analyst in US has or can get. The real FO jobs cannot be outsourced and will remain in the domestic country. Things like updating models with historical numbers, preparing an excel sheet with industry data etc are likely to be outsourced, but these are not things you want to do if you are an ambitious FO analyst.Some ER jobs will be outsourced but it will only be a tiny fraction of the total number of jobs available and the top end jobs will always remain in the domestic country. Now that is encouraging isn’t it?
Just to be clear I work for the Indian subsidiary that is doing the outsourced work.
I’m seeing a good number of hedge funds outsourcing quant/grunt work to India these days, but skill-based positions are still in abundance. No chance they will ever outsource a job like mine where you have to speak good English and interact with the best and brightest investors in the world on a daily basis and make qualitative decisions based on those interactions. Famous last words.
wow. u interact with the best and brightest investors in the world? u da man boss!
I’ll say something encouraging: the person who wrote the article probably overinflated his credentials and experience 2 or 3 fold, otherwise this would never get published because it would not be “sensational” enough if the person really does have those credentials, I wonder where does that person live and what kind of money they want to get paid, maybe he can’t find a job in Alaska paying 500K? if that person does have all those credentials and experience, I’m sorry but if you can’t get a job with all that you must have 0 social skills and look like a neanderthal… thats what I think when i read an article like that, thats why i stopped reading all the horror stories, because most of the time whatever people tell you is not true, especially in mass media.
answer: focus less on credentials and try to “warm up” to the person who can help you get a job. social skills are important… I had an i bank interview today and I was literally told (I have a top 20 MBA, too and just passed CFA level I) that “we like you, your MBA is not top 5” but the smart harvard and MIT guys we talk to are nerds…I am not making this up in other words, it is not just the credentials that get the job… NOTHING against those schools, I have contacts in several of the top 20 mba programs, it is just that saying you have a top MBA pedigree doesnt mean shi** – they want someone who can do the spreadsheets, take a CEO client to a bar, and sell a powerpoint presentation…it has to be a good blend of quant/people skills… 2) i banking wont go away…maybe research in a decade, but good bottoms up research, the buy side WILL pay for that…i banx will be around b/c global m/a is hot and will stay hot…
As Betterinram, I too work for a outsourcing firm and am currently working with the technology venture group of a Fortune 10 conglomerate firm, helping them in their technology investments. Although I do agree that they outsource a lot of their work, but they certainly don’t outsource the front office work (as Farley mentioned, his work can’t be outsourced), the point is they can’t because for that one needs to be in the industry and interact with various top notch executives involved in the deal, and the guys sitting in India or other outsourcing location can’t do that. Now, since the outsourcing personnel (working for third party outsourcing providers or for captive centers) in India don’t have those FO skills, they can’t deal with such deals taking place in India. So, for conducting that business the executives from FO move to India or China and work on that front. A big possitve point (for developed nations) which I believe about outsourcing is that as the business grows in future, the economies of developing nations become increasingly dependent on this, also, as people here keep on doing that job, they become experts in those skills and continue doing the same work, whereas, the developed nations keep the FO jobs with them in future. On the other front, as of now and in the next ten years, the financial markets in developing nations are not preprared to compete with the markets existing in the developed nations, as the main priority for these nations is to answer the problem of basic living needs (inflation, poverty etc.) and not to create complex financial instruments and structures, in short, the developing economies are and will continue to be (may be till next 5 - 10 years) very focussed on developing the living standards of the entire population first and then moving to development of financial markets (for example, commodities trading is prohibited in India, the interest rates are highest in seven years which means central bank is trying to combat inflation at the cost of GDP growth). What I believe is that if one has to move to FO, he/she has to move to a country with more liquid and competitive financial market (existing in developed nations) and there is no threat for FO jobs in the developed nations, its a win-win situation for both the developing and the developed economies. The developing economies get jobs (even if its backend), the employees in developed economies get more FO jobs and the employers get a fair deal for their work. However, competition in both the economies are expected to be intense but they are mutually exclusive (competition for back end jobs in outsourcing locations and for FO jobs in developed nations). Please note that most of the discussion is around India. China is a different animal and its growth is expected to be robust in coming years, but that also might not affect the FO roles as the FO work there is for their local businesses.
In India they are called KPO’s.!
My counter argument to the initial discouraging post is: - The outsourcing to India is being exaggerated. Most MDs and VPs prefer working with people in a face to face context. Even if the bank can save $70,000 per person, they would have to face many issues doing so, such as time difference, communication problems, lack of supervision, etc. - While not all investment bankers start at the bottom, many do go through the entire process. You will always need bankers with relevant experience and good quantitative skills. - Sooner or later, the economy will pick up and banks will start hiring in masses. Don’t know how soon though.