Entering the Finance Industry

Hey guys i'm starting university next year, looking to get ultimately into the finance industry. Not sure where yet its a pretty massive industry. I'm thinking investment banking/venture capital, ultimate goal of a hedge fund. Like every other guy right

So i'm going to do a BA in commerce, thinking double major in Finance and Actuarial Science.

I thought Actuarial Science would be a different angle and valued as everything comes down to risk management. Although i don't want to be an actuary.

Out of accounting, economics, finance, actuarial science, math what is the most useful or most highly regarded combination?

Ultimately im planning on trying to finish up with a masters/PHD in America. Is a masters/PHD necessary?

Would appreciate any advice/comments around courses to take and getting into the industry.

Cheers.

Evolve said:

Hey guys i'm starting university next year, looking to get ultimately into the finance industry. Not sure where yet its a pretty massive industry. I'm thinking investment banking/venture capital, ultimate goal of a hedge fund. Like every other guy right

So i'm going to do a BA in commerce, thinking double major in Finance and Actuarial Science.

I thought Actuarial Science would be a different angle and valued as everything comes down to risk management. Although i don't want to be an actuary.

Out of accounting, economics, finance, actuarial science, math what is the most useful or most highly regarded combination?

Ultimately im planning on trying to finish up with a masters/PHD in America. Is a masters/PHD necessary?

Would appreciate any advice/comments around courses to take and getting into the industry.

Cheers.

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That's great to hear that you are interested so early. I'm in my last year of my commerce/civil eng degree and have worked at an IB as a summer intern so I can provide you with some tips. Also wanted to ask what uni are you studying at?

Anyway, actuarial studies compliments finance in a way and employers do look favourable at it. However doing acturial studies means alot of your time is going to be drained and also your marks are going to suffer, not because you are not capable but just because of the sheer difficulty of the courses. (At least this is what I have heard from my Acturial friends who are extremely smart fellas 98 ATARS+).

If you are set to do investment banking/VC/hedgefund then definitely a finance degree would be the most useful. Sure accounting can definitely help but not necessary as an accounting major goes into alot more detailed accounting than what you need in those industries that you mentioned. So I would suggest you learn some finance specific accounting in your spare time. There is no special combination that be the most useful or highly regarded as those firms are essentially looking for people who are:

1) Intelligent
2) Have the working ethic to put in the hours
3) Easy to work with
4) Knows their crap
5) Passionate

There are plently of people in IB/VC/HF that aern't from a commerce background but even from engineering, psych and whatever else, but they are able to get in because they are intelligent fellas who have put in the time to learn about the industries in their spare time. AndtTo be completely honest Masters/PHD is definitely not neccessary, you can easily break into IB/VC with just a plain old commerce degree, but your going to need a lot of RELEVANT extra-curricular to show that you are genuinely interested and also have the skill set. IB is an increasingly difficult industry to break into, espicially with the deal flow in the market right now and you'll find that the Bulge Bracket IBs are only hiring a few interns each year and normally retain them as graduates.

However I would like to say breaking into VC/Hedgefund straight after graduating is extremely difficult, if you have connections then it makes it alot easier. Not saying its impossible, but I only know of one person who was able to "Break" in after graduating, and he was definitely one of the top students in the state (NSW).

There is so much more I can talk to you about, but that's just off the top of my head and is purely based on my own experiences and what I have seen.

Well done on being so focused at the start of your degree's, i had no idea when i started uni other than 'finance'.

I dont work for an IB so cant comment on what they look for, but they are extremely challegning to get into (like 16 positions for 2000 applicants) in Aus.

One route that may be worth considering to get a foot in the door is any for of financial sales. Not much you can learn about sales at Uni, but some basic marketing courses could be useful. Just a thought

prawn_86 said:

Well done on being so focused at the start of your degree's, i had no idea when i started uni other than 'finance'.

I dont work for an IB so cant comment on what they look for, but they are extremely challegning to get into (like 16 positions for 2000 applicants) in Aus.

One route that may be worth considering to get a foot in the door is any for of financial sales. Not much you can learn about sales at Uni, but some basic marketing courses could be useful. Just a thought

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Yeah I agree, I literally wasted my first of year of uni because I just wanted to do "finance" and had no real idea what finance actually constituted. So props to OP for the initiative.

Are you planning on going through to Lvl III with investment stream?

Thanks trnx,

Forgot to mention I'm from New Zealand, so will be studying at Victoria university Wellington. For the first year at least. I had a look at Melbourne university but as i wouldn't be able to get a student loan I wouldn't be able to afford it. Yet i may be able to exchange over there, or at least finish up there if i work hard next year part time.

Would it be worth going to a university in Australia? There is obviously a lot more money over there and quality investment banks. The ones in New Zealand actually send their interns over for workshops by Credit Suisse in Aus. Its definitely possible to get over there if i wanted to. (With some strong budgeting and a lot of work)

I agree with your thoughts on Actuarial Science, it is definitely a very hard course and would be at the expense of my grades which sound like the most important aspect.

So from what you are saying a single major in finance may be the go?
In regards to learning financial accounting of my own accord how would i go about that?
In my spare time i've been having a fair go with discounted cash flows from the internet, but it's not easy. Hopefully there is some better books on it at university.

What would you define as relevant extra curriculum activities?
I've been investing for a couple years and about to have a go at some more serious trading, i spend a lot of my time reading around the share market/economy and find it generally interesting. I'm just weary of learning bad habits and wasting my time. "Practice doesn't make perfect, perfect practice makes perfect" Its hard to practice right if that makes sense.

I understand it is a very tough industry to get into and don't expect to get in straight away. As it is so tough and massive i'm trying to set out a plan early as there is so much to consider. I don't want to hang around here in New Zealand, Australia would be a good start but ultimately America/Singapore sounds the place to go.

I'd like to get an internship as soon as possible , i don't expect one for the next 2 years at least (but scoring one prior would be great) but from what i've been told it may be worth while getting my name out and asking around early, as in now? Even in Australia maybe.

Cheers trnx really appreciate your time.

Thanks Prawn,

Yes surely a lot of competition! I won't be the smartest out there or have the connections, but it is where i want to head and i'll put in the work. Cheers ill have a look at basic marketing courses.

DeepState said:

Are you planning on going through to Lvl III with investment stream?

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Sorry what is Lvl III investment stream?
Do you mean CFA level 3? I was planning on doing the CFA exams and starting them during uni.

Evolve said:

Sorry what is Lvl III investment stream?
Do you mean CFA level 3? I was planning on doing the CFA exams and starting them during uni.

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Level III is the final set of examinations for actuarial to actually fully qualify as an actuary. Your choice as to whether to complete Level III (Investments) will impact your ideal subject choices. Hence the question. If you do actuarial, you won't need a CFA. CFA is now commoditized. It was hot 20 years ago. Now it's a right of passage and somewhat diluted. Nonetheless, they are a great bunch of people with the Melbourne Chapter being especially active. If you do not complete actuarial, you may require a Masters or CFA.

Actuarial is pretty weird. It has a massive attrition rate. Partly because it is difficult, partly because it is so damned boring. Here's an actuarial joke: How to you tell and accountant in a bunch of actuaries? He's the one looking at someone else's shoes.

The uni stuff is actually easy relative to the post-uni stuff.

If you want to get into IB straight out, straight H1 is not sufficient (you can do a little worse than that!). When you achieve that level of academic excellence, what matters is to have a ton of extracurricular that shows passion, excellence, organization, imagination, balance and being a top bloke to hang out with. You should see the CVs of the people who make it in. It's not about marks and subject choices don't matter that much either beyond the majors. The (book) smartest are generally not the best. If you enter IB, you will hardly see time out of the office for the first few years as you get crushed. The people who are hiring you must know you are good, but also that you are a good guy. Who wants to hang out with you for a 100hrs a week if you are not? And that applies to clients too.

However, the world is much bigger than IB and there are many interesting and exciting career pathways. Just roll with it and you'll find your fit. It takes a few years to get the feel. Most people who end up in the pointy end did not start in that field. Further, lots of people hate IB even if they make it in. It's not for everyone.

Thanks DeepState,

I hadn't quite looked that far. Like you said Actuarial looks quite boring and i was only thinking of taking it if the quantitative skills gave me an advantage. At this stage i'd say no as i don't want to stray to much into actuarial. I don't really have any real interest in being an actuary. I haven't decided fully what i'm going to take yet, just looking at options.

What sort of extracurricular activities would you recommend? I'm active in a lot of sport but i should probably get into some more charity/community work etc.

Cheers for your thoughts

Evolve said:

Thanks DeepState,

I hadn't quite looked that far. Like you said Actuarial looks quite boring and i was only thinking of taking it if the quantitative skills gave me an advantage. At this stage i'd say no as i don't want to stray to much into actuarial. I don't really have any real interest in being an actuary. I haven't decided fully what i'm going to take yet, just looking at options.

What sort of extracurricular activities would you recommend? I'm active in a lot of sport but i should probably get into some more charity/community work etc.

Cheers for your thoughts

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Seems like you want to be a quant. Actuarial-lite will help. Also load up on econometrics. Finance is easy. Learn to code in R and MatLab. The econometric stuff might be in RATS, SAS and/or EViews. If you can code, your value multiplies. Skip maths. Do lots of stats. You may need to do an M.AppFin or CFA to develop your CV. You should probably work whilst getting these.

Extra-curricular stuff can be whatever. Just show that you are a human who'd be interesting and fun to be around. It is also a means of demonstrating non-academic abilities.

Play a sport, but do it well.
Organise something like an around the country tour of actuaries in top-end jobs for a group of interested people.
Do something irreverent. Organise the Chocolate Lovers Society Ball. Play Bocce.
A charity would be good. Whatever calls you.

As a (well-rounded) quant, you can get into IB. You can also get into Management Consulting, asset-liability management, financial modeling in all sorts of places (equity trading, bonds, funds management, investment consulting).

Learn how to value a company and how to assess its strategic position. Learn about the value of business combinations. I'm not sure they will teach this to you in sufficient detail. You will be drilled on this.

At the end of the day, half your decisions will be opportunistic and the outcomes will have a reasonable proportion of luck to them. Enjoy the journey. It's a marathon. Uni will also be the time of your life. It's not all about preparation for the workforce.

DeepState said:

However, the world is much bigger than IB and there are many interesting and exciting career pathways. Just roll with it and you'll find your fit. It takes a few years to get the feel. Most people who end up in the pointy end did not start in that field. Further, lots of people hate IB even if they make it in. It's not for everyone.

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This is a key point for me.

Having a plan is great, but don't get too focused on your plan that you miss other opportunities. I was initially hesitant joining the firm I am with now as it wasn't quite the industry I wanted, but I took the plunge, became a top performer, moved cities 3 times, and within 4 years was (and am) managing an entire region in the USA.

If I had been focused on one thing or I hadn't been open to new opportunities and willing to take a chance (more than once) I wouldn't be where I am now. And I still have a hell of a long way to go in my career

prawn_86 said:

This is a key point for me.

Having a plan is great, but don't get too focused on your plan that you miss other opportunities.

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I live by this premise every day. You also need to be active about creating opportunity for yourself too, no one is going to 'make it' for you.

A little story:
After being out of work for 5 months I landed a job earlier this year, the money wasnt great and I wasn't very happy but they had steady work for years. I got fed up with it and phoned an old employer and told him I am available if he needed help. A week later he phones me asking if I am available for a short 4 week stint with no promises after that (the hourly rate is well over double). He also said I had 1 day to think about it as I would be required to start the next day to cover for someone going on holidays. I took the job offer, having a punt knowing that multiple maintenance projects were coming online in my chosen field of work. Now I'm across multiple projects working big hours with what looks like a few years work in front of me.

It was a little bit of macro industry knowledge, creating opportunity and taking it when it presented itself.

RY completely laying down the law in this thread. A+ stuff.

I agree that top end successful character rarely stay in one field there entire career and that your initial area isn't super important. On the other side of the coin I will say I think if you can land a really strong graduate position it just puts you so far in front of the field. Thing IB or top consulting firms. RY is right though you will get crushed. You'll find out if you do truly want it or not. A couple of my friends got in and just hated it.

DeepState said:

....

At the end of the day, half your decisions will be opportunistic and the outcomes will have a reasonable proportion of luck to them. Enjoy the journey. It's a marathon. Uni will also be the time of your life. It's not all about preparation for the workforce.

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Sounds like professionals are no different than a regular Joe, who is doing a bit of his home work and a bit of punting on the share of a company.

Evolve said:

In my spare time i've been having a fair go with discounted cash flows from the internet, but it's not easy. Hopefully there is some better books on it at university.

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Get used to it!

You'll be using it in just about every subject, across every year.

Thanks RY! Really appreciate it.

I don't want to be a quant but like you said there are all sorts of places to go with it. I'll load up on econometric's although i can only get a minor in it. Coding would be great to learn but i don't want to code as a job. I just thought some quantitative skills would be important which i would get through actuarial or it seems econometric's. Thanks for the extra curriculum ideas.

I'm also considering geology which would open up the whole mineral/oil company side of things.

I'm not plan fixed but i think it's important to have a plan/goals. I may very well switch industry's and am open to other opportunity's. The reason i'm keen on trying to decide on a course is that it alters what papers i need to take in the first/second years.

Cheers for everyone's contributions