Changing from apples to oranges? No problem!

February 14, 2008 8:14 AM

How do people break into finance (hedge funds, i-banking) when their concentrations in college had absolutely nothing to do with finance?

I have been meeting (and reading about) people who have jobs in the financial industry, yet their backgrounds and majors (poli sci, history, etc.) have never entailed related experience that you would normally think is sought after in finance.

I graduated with a degree in journalism and have always found an interest in the banking/finance industry - I'm currently a legal assistant for a law firm whose clients are major banks - but if there is a way to finagle my way into finance, I'd like to know how!

posted by chan.caro to work & money (14 comments total)

Are you really really smart? Mr. Shaw and Company don't seem to care what your major was.
posted by zazerr at 8:29 AM on February 14, 2008 [3 favorites has favorites]

according to family members I have in the industry, it seems like most people who get into Wall Street have little real financial training in college. I don't know where you are, but your best bet is to find a job fair at your college or nearby that caters to the financial industry. If you are in or near NYC, your projected starting salary will be about $80,000 - but that's actually not a lot to start out with and they will expect you to show you can live on that money, come to work on time and survive the dreadful life of a first year broker. You want to find a job that will sponsor your licensing exams including Series 7 and the rest, if they won't then the job is hardly worth it and you'll end up filing and making sales calls all day.
posted by parmanparman at 8:29 AM on February 14, 2008

Do you have any relatives in the business? That is probably the most common way of getting into finance without having any formal training or schooling in finance.
posted by Grither at 8:35 AM on February 14, 2008

I had a physics degree after college. One of my fellow physics grads went on to work for Goldman but thats because they were recruiting on campus. I almost went to work for another investment bank after graduation. I got an interview because one of the partners was the uncle of a good friend of mine. Your mileage may vary.
posted by vacapinta at 8:44 AM on February 14, 2008

Investment banking analyst programs (which is the gateway job to hedge funds and private equity funds) are major-agnostic*. The key is to prove that you have an interest, which isn't easy if you were a history major and never once picked up a Wall Street Journal.

Lots of undergrad hires are economics majors from Ivy League schools. They don't teach you the finance you'll use on the job in an Ivy League econ department, so the banks train you. But econ majors have a leg-up in recruiting because it's easier for them to prove their interest in finance.

Do you have any relatives in the business? That is probably the most common way of getting into finance without having any formal training or schooling in finance.

This wasn't true for me or the vast majority of people in the industry I know. Strong family ties help, of course. And it especially helps get you in at the elite-of-the-elite (ie, Goldman Sachs versus Citigroup/Lehman/UBS in banking). But I wouldn't let the lack of family connections discourage you.

* A senior banker I once worked for claimed that Morgan Stanley did a study to determine which undergrad majors made the most successful analysts. The result: music majors. I can't vouch for the veracity of this claim, but it wouldn't surprise me if it were true.
posted by mullacc at 8:54 AM on February 14, 2008

They don't teach you the finance you'll use on the job in an Ivy League econ department, so the banks train you.

Also, they don't teach you the finance you'll use on the job in any finance department either (with the exception, to a certain degree, of Wharton). I was a finance major and except for a few bits of theory, I only had a small advantage going into training.
posted by mullacc at 8:58 AM on February 14, 2008

The same way you crack any industry in which you have few relevant qualifications but which you believe you are destined for: you pound the pavement and don't give up until you succeed. If your confidence in your own potential is justified, some enlightened employer out there will eventually agree with you.
posted by randomstriker at 8:58 AM on February 14, 2008

All of my friends in finance got their jobs by being very, very smart, intensely interested in finance (even if they studied different things) and networking with people already in finance.

Have you not done much networking before? It's something you can learn.
posted by J-Train at 8:59 AM on February 14, 2008

How do people break into finance

You might find this article interesting. Long story short, it's the story of a guy who became a stock picker advisor on the strength of his salesmanship skills. Many years of typical investment house behaviour later, he realizes he's selling garbage and milking commissions and finds a better way.
posted by Nelson at 9:00 AM on February 14, 2008

It sure doesn't hurt to have attended Harvard or Yale. The major Wall Street financial houses actively recruit people right out of college at those places. The year I graduated, as vacapinta notes, they wanted physics and biochem guys. Even though I was pre-med I got quite a few calls from places that wanted to teach me how to be a financial analyst in exchange for what I had, which was 1) a basic understanding of (then) the cutting edge of genetics research and 2) a small network of very bright Harvard profs who were doing this research and knew me well enough to respond to my phone calls or emails.

I wasn't interested in financial analysis, so I politely declined these offers, some of which were very serious and very lucrative.
posted by ikkyu2 at 9:06 AM on February 14, 2008

I went from working in physiology research laboratories to working at a primary dealer in US Treasuries on the strength of my computer programming skills (self taught) and engineering mathematics from my college curriculum. I was cold called by a headhunter one day in the lab. One of my most successful friends in the industry was an art history major in college.

The main thing that other people from non-financial backgrounds seemed to have was a strong aptitude (if not lots of education) for mathematics. Computer programming skill was always a plus, since big parts of the industry are software-dependent. In quant departments, I've met a lot of physics and math majors (especially nukes, I guess due to the stats background).

Though I had some fabulous contacts (one, now a *billionaire*), they didn't really help me get into the industry so much as help my advancement once I was there.
posted by Calibandage at 9:31 AM on February 14, 2008

It's very difficult to make the jump into banking or investment management from anything other than undergrad or business school. And to be honest getting into the kind of business school that can get you into the industries you want to work in* is going to be hard unless you can identify and execute a career progression past legal assistant in your current track.

Hedge funds like DE Shaw may talk to you if you have eye-popping standardized test scores, but there aren't many DE Shaws in the world-- and anyway the "outliers" that those firms recruit are usually subject matter experts, quants, or people who are four-sigma unusual in some sense.

People have made it from investment sales into investment management (Charles Brandes, most notably), but doing so is a rare event, and you'd usually have to be a broker for n years, where n is an uncomfortable and difficult number.

And the "pound the pavement" advice isn't actually untrue. It's just that you may be pounding the pavement for years. I am familiar with at least one top-ten long-only investment manager where assistants (the "please make copies and arrange my travel" kind of assistants) are encouraged to take on equity analysis work. Note that being an assistant to a bunch of irritable and arrogant analysts and PMs when you have a college degree is not fun. And they hire a new assistant about once per year.

Last, if you want people to take you seriously, you'll want to come to the table knowing the nuts and bolts of finance.

*and very few people who really understand the difference between i-banking and investment management think that both of them are careers worth pursuing; they entail different skill sets and different lifestyles. My banking friends send me unhappy 2 AM emails from the office because they need to proofread the slide deck and go over the models again, while my buyside friends send me 2 AM emails from bed, where they are watching the Japanese market on CNBC.
posted by Kwantsar at 11:32 AM on February 14, 2008 [1 favorite has favorites]

The best and most reliable way people with a liberal arts degree get into top finance jobs, if they didn't do senior year recruiting, is to get an MBA in between. A paralegal job is a very poor platform for b-school applications, though, so you'd need to change to something with a more explicitly professional content first. Even journalism! Connections aren't particularly useful or necessary for this, but you do have to be willing to play the b-school networking / cocktail-party game once you get there. (Which isn't hard, really.)

Other ideas:

If you graduated in the last year or so with high grades at a good school you might submit your resume for the post-BA analyst programs at the big banks. You wouldn't have a good chance, but you'd have a chance.

You could also pursue an entry-level sell-side job in institutional sales/trading/research (note -- MUST be institutional). These kind of jobs are advertised on Craigslist and other places (believe it or not) and a good degree and paralegal experience could be valued. These jobs are going to have a para-professional / clerical element to them initially and won't be well paid but they are front office and they are promotable. Not a bad place to start.

Connections would help in either preceding thought, but aren't required.
posted by MattD at 12:09 PM on February 14, 2008

Look for answers to similar questions on http://wallstreetoasis.com
posted by fourstar at 1:12 PM on February 14, 2008