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How to prepare your CV to switch from banking to hedge funds

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Trading in investment banking isn’t as well-paid or as ‘fun’ as it once was. Hedge funds have been the obvious escape route for many, but making the move across to the buy-side is tough and only a select few traders can secure a switch. Here’s how you can spruce up your resume to ensure you can catch recruiters’ attention.

1. Highlight specialisation

Hedge funds only hire specialists. If they’re hiring analyst they’re looking for the best in that sector; if they’re hiring traders or portfolio managers, the chances are that they’ll be working on a particular strategy.

“Highlight the industry sectors you know best,” says Anthony Keizner, managing director of headhunters Glocap. “If you have specific experience in say telecoms, industrials or E&P, it will help your resume get noticed.”

2. Make it all about you

The key to grabbing the attention of a hedge fund recruiter is convincing them that your PnL was down to your individual brilliance and not the huge scale and infrastructure present on the trading floors of investment banks.

“It’s a mistake not to highlight what you’ve done individually,” says Keizner. “There’s a feeling with some HF hiring managers that those at who have been successful at banks were so because they had layers of junior support, and access to all kinds of resources. Showing that you can source, diligence and invest with limited support is a key message to get across.”

3. Show creativity and entrepreneurialism

Last week it emerged that hedge fund Brevan Howard has hired former professional poker player Alexios Zervos, who has little to no relevant experience. This is not the first such hire – Tudor Capital hired Lawrie Inman who also played poker professionally, although he was a trader before this. Think chess, bridge or poker – all impress hedge funds. Also, according to hedge fund recruiters, if you’ve succeeded in running a business in addition to your day job, this is a big plus point.

“Hedge funds want to see an interesting story and they want to know that you can handle multiple pressures,” says one former headhunter who now works in-house for a large hedge fund in Connecticut.

4. Show you are elite

Hedge funds demand impeccable academics, and brand name universities – a little less so than private equity firms – but how far they go back is a little worrying.

“If you have a good GPA or top SATs, put them on your resume, even if it was many years ago (many HF hiring managers assume the scores weren’t great if they are omitted),” says Keizner. “And for better or worse, they put weight on these scores even for experienced candidates.”

5. Demonstrate quantifiable results

Highlighting your experience? Don’t talk about generic responsibilities – show quantifiable results. What exactly did you achieve? What was your PnL? How did you beat, not work with, your peers in investment banking? Highlight challenges you faced and how you overcame them to produce results.

6. Show that you are a winner

As dreadful as it sounds, hedge funds want to see evidence that you’re better than your contemporaries. Like private equity firms, they want to hire winners.

“If all your performance has been team-based, then at least play up the speed at which you were promoted, that you were nominated in the top category in reviews and received top-tier bonus awards,” says Keizner. “Hedge funds are looking for a small number of stellar performers who have risen to the top amidst top-quality peers.”


Meet the impressive young bankers in Morgan Stanley’s 2015 analyst class

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Morgan Stanley’s 2015 analyst class is in situ. The bank tweeted news of their arrival last week, along with a photograph of a crowded dining hall seemingly full of a lot of dark haired young men. So, who exactly has joined Morgan Stanley this summer?

Publicly available profiles suggest there are plenty of the usual suspects: high achieving students with a list of internships as long as the Greek debt negotiation process. If you’re thinking of applying for a front office role at Morgan Stanley, here’s a sample of the sorts of people the bank likes to hire.

1. Arun Manikundalam, a former teaching fellow at the NYU Stern School of Business 

Manikundalam just joined Morgan Stanley’s media and telecoms group in New York. Having helped teach NYU Stern’s ‘Foundations of Financial Markets’ course for five months, Manikundalam already has a healthy knowledge of finance. It helps that he was a summer analyst in the same group at Morgan Stanley last year and completed a four month internship at Pharus Advisors, a mid-market boutique, in 2013.

2. Brogan Moss, a ‘woman in finance president’ with a 1st class degree in economics

Brogan Moss has a first class degree in economics from Warwick University in the UK. She has five A-levels, four of which were graded A* and one of which was graded A. She was the president of the women in finance group at Warwick and attended a one month women’s ‘community works project’ at Goldman Sachs. She completed a summer internship with Morgan Stanley last year and has also completed spring internships at Nomura, Morgan Stanley and Rothschild. Brogan is joining Morgan Stanley as an analyst in the markets business.

3. Eugene Say, a graduate of Singapore Management University with a long list of competition winnings 

Morgan Stanley has also hired Eugene Say for its Asian business. A graduate of Singapore Management University, Say is joining Morgan Stanley’s capital markets business after competing a summer internship with the bank last year. He’s also interned for DNB Markets, Citi, and BruVenture Capital.

What really differentiates Say, however, is his massive list of competition winnings. Among other things he won the National University of Singapore’s stock pitch challenge in 2015, was a ‘champion’ in the CFA’s Global Research Challenge in 2013, and was the first runner up in Bain & Co’s research challenge in the same year. In total, Say has 11 such accolades to his name.

4. James Xing’an Wang, an investment banking analyst in Hong Kong who’s been specially recognized by the CFA Institute 

Like Say, Xing’an Wang has received some special plaudits from outside bodies. He’s just joined Morgan Stanley in Hong Kong after interning last summer in the bank’s Global Power & Utilities (GPUG) and Transportation Group. He’s also been an investment banking analyst at China Construction Bank and has spent two months interning at China’s ASEAN investment cooperation fund. A graduate of the Hong Kong University of Science and Technology, he’s spent time studying in California and won a CFA Institute Student Scholarship in December 2014 and was the Hong Kong champion for the CFA’s research challenge in November.

5. Zara Boyd, a Cambridge University student and choir singer 

Zara Boyd has joined Morgan Stanley in London as an analyst in IBD. She interned with the bank last summer and studied natural sciences at Cambridge University. Alongside her banking activities, Boyd is a keen singer and member of the national youth choir.

6. Clemente Castellucci, an Italian student who achieved full marks in his final exams

Clemente Castelluci is joining Morgan Stanley’s investment banking division after interning in its FIG team last summer. A graduate of Bocconi University’s Bachelor in Business Administration and Management program. Castelluci achieved 110/110 in his final exams. He’s completed London Business School’s Masters in Management Programme and has also interned in GIC’s European equity team and at Ardian, formerly known as Axa Private Equity. 

What the perfect Goldman Sachs career looks like

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Such is the stamina of John S. Weinberg, who was co-head of Goldman’s investment bank from 2001 until late last year. Weinberg joined Goldman as an associate in 1983. He was promoted to partner in 1992 and has managed to hang on a (remarkable) 23 years in that position when the average tenure of a partner is closer to eight years. 

It helps that Weinberg was Goldman’s ultimate ‘culture carrier.’ It helps too that he’s chummy with some of the firm’s, “most important clients.” And it helps that he’s as close to Goldman royalty as you can get: he’s the son of John L. Weinberg, a former chairman of Goldman’s management committee, and the grandson of Sidney Weinberg who was Goldman CEO from 1930 to 1969.

After 32 years at Goldman Sachs, John S. isn’t even retiring – he’s becoming a ‘senior director.’ Lloyd Blankfein and Gary Cohn both said they’re very pleased with this outcome. Longer term, it can only be a matter of time before a new generation of Weinbergs moves in to keep the dynasty alive.

From Banking to Hedge Funds (eFinancialCareers)

Investment banking trader looking to switch into a hedge fund job? It’s not an easy move – this is how you need to change your resume.

Heavily-armed New Starters (eFinancialCareers)

Morgan Stanley’s new analyst class has just started. Here’s a look at the impressive individuals who secured the jobs.

A Terrible Joke (Sun)

HSBC ran a bonding day for some of its ‘bankers’ in Birmingham, UK. They dressed up in orange jumpsuits and performed a mock IS-style execution on an Asian co-woker and posted it on Instagram. They were fired.

Looking After Shareholders (WSJ)

Goldman Sachs has got a new M&A ‘shareholder advisory group’ to deal with activist and defensive M&A deals.

A Step Up (Reuters)

Citi just promoted Michael Lavelle to head of UK and Ireland corporate and investment banking and vice chairman of EMEA CIB. Lavelle has been with the bank for 19 years. (Reuters) 

Code Breakthrough (NYT)

The man accused of stealing code from Goldman Sachs is free, again. “It feels great.” (NYT) 

Risky Business? (Dealbreaker)

Billy Joel just married a former risk manager from Morgan Stanley.

Data Feast (Trade News)

MiFID II is creating big opportunities for data professionals.

How to secure a new finance job before August

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Achieving a new financial services job is like negotiating with the European Central Bank. It takes time. It takes patience. Ultimately, the answer could well be no.

“Deutsche Bank once spent 12 months deciding whether to hire me,” says one trader. “At the end of the process, they decided against it.”

Deutsche does at least recognize that it has a problem. In his inaugural memo to employees last week, new CEO John Cryan declared that he’d been told that Deutsche took, ‘nine months to interview and hire someone,’ and that, “this can no longer happen.”

Recruiters say the bureaucratic mire at Deutsche Bank is deep, but that it’s not the only bank for which recruitment is akin to wading through treacle. “Deutsche interview very vigorously,” says the head of one recruitment firm. “They like to have seven or 10 rounds of interviews. Then you might get a verbal offer and then that will need to be approved and a contract generated…

“US banks also take ages – they need to get approval from New York. And second tier European banks can be very slow too,” he adds. “Three to five months is standard.”

If you want to get a job offer before the end of the summer, therefore, how should you go about it?

Recruiters offer the following advice, some of which you may be able to influence and some of which you may not.

1. Apply for revenue-generating roles, or not

Needless to say, banks will expedite job offers when the roles concerned are likely to make them some money. “Sales and trading roles are filled more rapidly than research roles,” says Chris Apostolou at Arbitrage Search & Selection. “Most research-type jobs take six months to fill,“ he adds.

Oliver Rolfe at search firm Spartan Partnership says this doesn’t apply when researchers are ranked. “With an analyst, you know how good they are because they have a product. Salespeople and traders can take longer to place because there’s more due diligence involved in determining their ability.”

2. Don’t work in Germany

Over in Germany, it’s the norm to have three month notice periods which start from the end of the most recent quarter. “If someone in Germany resigns now, he will not be free to move until three months after the end of September 1st,” says Apostolou. In other words, the start of December. This might be why German banks are in no big hurry to produce contracts.

3. Do work in the US, or not

Anecdotally, employers based in the US are quicker to extend job offers than those in Europe. “In 2009 I saw a guy receive a $1m offer just three days after the vacancy had been opened,” says Apostolou. “He accepted on Monday and started on Thursday.”

US-based headhunters suggest this may be spurious, however. “Waiting three to five months to move is pretty standard here,” says Michael Karp at New York-based search firm Options Group. “

4. Apply to a boutique 

Where banks take months to decide about new hires, boutique firms can take weeks.”A quick placement can take as little as 2.5 weeks,” says Zaki Ahmed at London-based Financial Search. “Bigger banks tend to take longer and boutiques are quicker. Boutiques are smaller with fewer people to agree to the sign-off. And they know that they’re more likely to get candidates on board if they can be fast.”

5. Apply to hedge funds 

Hedge funds hire quickly for the same reason boutiques do, says Karp: they’re smaller, with fewer decision-makers to please.

6. Apply to the Big Four 

Despite being as cumbersome as banks, recruiters say the Big Four can also be quick to make hiring decisions. “For junior and mid-ranking roles they have a simple two-stage process,” says the head of one IBD recruitment firm.

7. Set a time limit 

Big banks delay making offers because they can. They know that people really want to work there and they know they can take their time deciding whether to make a hire or not. This doesn’t mean you have to go along with that. “Ideally you need a verbal offer within a month of starting the process and a written offer three to four weeks later,” says the recruitment firm head. “If you don’t have that, you can make it clear that you’re not going to wait.”

Robey Warshaw’s reminder why you want to work for a boutique

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Robey Warshaw has released its results for the 18 months ending March 2015. They’re impressive. Particularly when you consider that Robey Warshaw only has three partners, six other registered employees and three further support staff.

In the 18 months to March, Robey Warshaw generated £23.9m ($36.9m) in revenues. Operating expenses were £4.5m. Robey Warshaw’s operating margin was 81%. That’s a lucrative business.

Robey Warshaw’s £19.4m of operating profits were available for distribution between its three partners, the esteemed M&A bankers Simon Robey, Philip Apostolides and Simon Warshaw. The partner with the ‘largest entitlement’ could have taken £9m. It’s not clear whether he did.

Needless to say, life at a boutique isn’t quite as lucrative when you’re not a partner. Nor is it penurious either.

Robey Warshaw’s six non-partner level employees shared £2.9m between them, an average of £317k ($490k) each over the eighteen month period.

As a reminder, Goldman Sachs International paid its average London employee £363k last year alone. However, this figure includes compensation for Goldman’s senior staff. When Robey Warshaw’s disbursements to its partners are included, average pay per head at the firm was £1.9m over 18 months or £1.2m over a year.

That’s why you want to leave your big bank and work for a successful boutique instead.

12 ways investment banking analysts screw up in their first weeks on the job

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Thousands of newbie analysts are about to grace to doors of investment banks across the globe. Buoyed by getting through the onerous recruitment process and confident following a probable series of prior summer internships, they will be tempted to believe that they’ve already made it.

In fact, the journey is just beginning and over-achieving university graduates are about to get their first taste of the real world. The first few weeks on the job are pivotal – here, according to graduate recruiters, senior bankers and analysts (speaking anonymously) is how to avoid tripping up.

1. Trying to get ahead of other analysts from the outset

Investment banks claim to hire from any degree discipline; the idea being that the financial services knowledge will be imparted during the first few weeks training. The reality is that most new graduates tend to come from finance backgrounds, have a great deal of knowledge already and often feel the training programme is beneath them.

“A lot of people look visibly bored during aspects of the training, or simply come across as a know-it-all,” says one graduate recruiter. “If you know something, how about helping your friends, rather than lording it over them?”

2. The disheveled look

In the wake of Bank of America intern Moritz Erhardt’s death in 2013, most banks have made attempts to scale back the working hours of their juniors. This may or may not work – given that most analysts are self-driven over-achievers looking to gain an edge over their peers. However, the art of an all-nighter is knowing when to go home, however briefly.

“People have been asleep at their desks when people come in at 7 or 8 in the morning,” says the grad recruiter. “This looks bad – particularly as they usually have to stay for the next day in the same clothes.”

3. Working through

On this point, a third year analyst at a large US bank tells us that you really should go home, or you’ll simply never last: “You’ll be pretty useless and won’t be able to talk through the work effectively. Go home at 4am, get a few hours’ sleep and set as many alarms as it takes to get back into the office on time. At least you can function for the rest of the day.”

4. Tardiness

It seems like a basic requirement, but the transition from university to full-time work can often result in juniors turning up a little late. In this environment, it irks people.

“If you need to be in for a training session at 8.15am, don’t turn up at 8.25am. This is not a university lecture – expect to be mocked if you’re late once, and to get the hairdryer treatment if you do it consistently,” says the graduate recruiter.

5. Forgetting that you’re a hindrance

The learning curve will be steep in your first year as an investment banking analyst, but the work can be tedious. Financial modelling and learning Excel shortcuts may be a far cry away from the big-swinging deal-maker you expec to become. This doesn’t mean you should slump in your chair, spinning your wheels and eliciting sighs of boredom. “There’s nothing more annoying than a new analyst with no get up and go,” says the grad recruiter.

6. Asking needless questions

Questions are good; no one expects you to know everything. Demonstrating signs of stupidity is not: “Not understanding what you are told gets you in trouble. It’s OK to ask for something to be re-explained, but then you are expected to have understood. Don’t keep asking – figure it out in your own time or ask someone else,” says Peter Harrison, a former executive director at Goldman Sachs, who now runs Harrison Careers.

7. Continuing to live off the bank of mum and dad

Why do analysts receive a base salary of $60-70k in their first year? So they can afford to live close to the office, said one analyst who lived in a house share close to Canary Wharf until recently. “Living with your parents in the commuter belt is not conducive to working 80-100 weeks. Rent somewhere near the office, so you can get home and back quickly,” he says.

8. Failing to conform

This is not the time wear something edgy; you’re entering a culture where brown shoes with a business suit would be considered sacrilege. “Dressing differently from others sounds trivial but marks you as a renegade,” said Harrison. “Do your best to conform; your employer expects it.”

9. Assuming everyone likes you

You may have spent the summer internship ingratiating yourself to colleagues on the desk you eventually secured an offer with. You may be the right ‘fit’, but does this mean you’re everyone’s friend? No. “You’re not starting from scratch, but you still need to earn the respect of your colleagues,” says one former analyst.

10. Doing as your boss does, not what they say

You may notice your managing director behaving in an arrogant manner, or getting away with certain eccentricities. Do not try to emulate this: “One managing director on the trading desk worked in jeans and T-shirt, so a new analyst decided to copy him,” says the graduate recruiter. “I said that as soon as he starts bringing in the same amount of money, he can wear what he likes.”

11. Failing at the basics

Print out any work, review it thoroughly and eliminate as many mistakes as humanly possible before handing it in. This is not a university assignment – it won’t simply come back with a bit of red pen. If it’s wrong, expect a dressing down. “Delivering a piece of work that is plain wrong is the best way to screw up. Delivering it later than expected follows a close second,” said Harrison.

12. Believing they have a period of grace

Sadly, after training finishes, there’s no time to settle in and get your feet under the table. You’re not going to be given a quarter to come up to speed – performance matters from the get-go. “A lot of analysts think they should spend their summer travelling around Asia, when in reality they should get to grips with Excel macros and getting a better understanding of the industry,” says the third year analyst.

BOCOM Securities the latest Chinese firm to poach from investment banks

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Despite the recent slump in China’s stock markets, another Chinese security firm has signalled its intention to expand and is capitalising on the fall-out from global investment banks.

“We have a plans for expansion, both in Mainland China and in Hong Kong, and we are working on a concrete plan now,” says Hong Hao, a Managing Director and the chief strategist of BOCOM International, the HK-registered investment banking and brokerage arm of Bank of Communications. So far this year, BOCOM has already managed to hire some bankers from bulge bracket investment banks in the region after a number cut back, he says.

Hong said this even as China’s stock market slump goes into the third week. China has made a string of policy announcements in the past two weeks aimed at propping up the market, but with minimal effect so far.

Hong’s remarks go against the wave of cutting in Hong Kong by many global bulge bracket banks in the first half of this year. Standard Chartered culled its equity business in early January, leading to about 200 job losses. Nomura, CIMBMacquarie, even Goldman Sachs all followed suit and cut at some point in the first few months.

Hong also stressed that BOCOM’s expansion plan is a long-term one. “It won’t be affected by the recent market slump, ” he adds.

Lin Yong, CEO of Haitong International – another expansionary Chinese securities firm – did the same earlier this year. He told Bloomberg back in January that “we’re interested in talking to almost all of the finance professionals available in the market”

Although China’s stock market has seen its sharpest drop in the past three weeks in two decades’ time, the aggregate amount of hike has still been impressive since the end of last year. As a result, many Chinese securities firms are expanding into Hong Kong and stepped up recruitment there in order to cope with the business growth.

Some of them used IPOs to raise capital to fund the expansion. Huatai Securities listed in early June and GF Securities in April. The latest one is Guolian Securities, which just listed yesterday.

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J.P. Morgan shifts over 2,000 jobs from NYC to Jersey

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J.P. Morgan employs a lot of tech staff. At the last count, our sources suggested around 30,000 people in this area – still around 25,000 less than Google, but a huge employee base for a company whose principal focus is finance.

But just because technology is a big focus for banks, doesn’t mean that they want to base their IT staffers out of major financial centers. We suggested previously that the J.P. Morgan’s decision to shift 350 tech jobs out of London to the lower cost destination of Bournemouth – a beachtown on the south coast of the UK – could mean a change in strategy that could hit the U.S.

So it has proved. J.P. Morgan is moving 2,150 roles from New York – where they are housed in a series of disparate offices – to a single location in New Jersey. This will have the double benefit of cutting costs and consolidating the offices.

Immediately, this is unlikely to affect the bank balances of J.P. Morgan employees. It offered its employees in London the same salaries to make the move to Bournemouth, so it could follow suit in the U.S. Longer term, however, the concept of ‘nearshoring’ – shifting jobs out to lower cost destinations close to home – is likely to mean downward pressure on pay.

Avoiding a Terrible Start (eFinancialCareers)

Thousands of new analysts will be joining investment banks across the globe this month. Here’s how they can avoid screwing up in the first few weeks.

Summer Looking (eFinancialCareers)

Getting a new job before the end of August is difficult, but not entirely impossible.

Goldman Sachs Shake-Up (Financial Times)

Karen Cook has been named chairman of its investment banking division. Her rise is exceptional not only because of her gender, but because of her background – her father was a car mechanic and she only went into banking after taking an MBA at Manchester University.

Tough Call (Bloomberg)

Hedge fund CFO loses $1.2m after handing over pin numbers to a fraudster claiming to be calling from his private bank Coutts. He was also fired by his employer.

@BSelevator (Bloomberg)

The famous @GSElevator Twitter account is nonsense, says former Goldmanite: “I used to work at Goldman. I never heard anything like this in the elevators. My colleagues were nice people.”

The Step Across (WSJ)

Royal Bank of Canada has named Doug Guzman head of its wealth management division. He was previously global head of investment banking.

Gone Swiss (WSJ)

UBS has poached a senior banker from Deutsche Bank in New York. Brad Miller joins as global head of equity capital markets syndicate.

A Bit Boring (Business Insider)

Investment banking intern says that the hours are tough, but the work isn’t very hard, or very exciting.

Quote of the day: 

“I wanted to do my job as perfectly as I could. It doesn’t matter if I was cleaning a deep fat fryer or picking chicken off the bone, those jobs were left to me because I’d do them the best possible,” Tom Hayes, the $12m trader at the center of the Libor scandal, on his first job at a fast-food restaurant.


John McFarlane’s plan for Barclays investment bank

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Antony Jenkins is out. There will be no more references to ‘Barclaaays’, the ‘Go-To’ bank may become a mere bank, and the cosy clique of Jenkins and ex-chairman David Walker that gave us such innovations as, ‘Christmas Carols for City VIPs’, has been comprehensively dismantled.

So, what comes next? Probably, this….

1. Deeper, faster cuts to the investment bank 

McFarlane says his focus will be, “shareholder returns”. If so, he needs to address the investment bank. As Bloomberg points out, the unit’s return on equity was 2.7% last year compared to Jenkins’ target of 12%. Despite Jenkins’ promise to cut 7,000 jobs from the investment bank in the two years from 2014, headcount in the unit fell by just 2,100 last year with cuts seemingly restricted to a few key areas.  Chirantan Barua, senior analyst at Bernstein Research, points out that this was likely due to the onshoring of technology roles, which offset cuts elsewhere.

Nonetheless, the FCA Register shows that Barclays’ UK investment bank cut just 92 registered staff out of a total of 1,845 between May 2014 and May 2015. The pace of change hasn’t exactly been rapid so far.

Under McFarlane, this is likely to change. Although he said today that he’s “very happy” with the investment banking business which is an important part of Barclays, the bank’s new executive chairman has a reputation for cost-cutting. At ANZ, McFarlane cut the overall cost ratio from 65% to 45% and shrank the investment bank. At Aviva, he reportedly divided the company up into small cells and worked out which were profitable and which weren’t.

2. Bigger cuts to UK fixed income 

Barua thinks Barclays’ problem is the UK-focused fixed income sales and trading business. He’s not alone – in Barclays’ March investor call analysts asked why the bank didn’t dispose of the macro sales and trading business entirely.

The underlying issue is capital. When tangible equity is expressed as a percentage of tangible assets (as per the chart from Bernstein below), Barclays is the least well capitalized of all UK banks. Moreover, capital levels in the core investment bank are far below the target. Cutting the capital heavy fixed income business is one way to resolve the problem. Another is to raise more capital. McFarlane said today that there are no imminent plans for capital raising. “Shrinking makes sense in European FICC,” says Barua.

Barclays’ tangible equity as a percentage of net tangible assets, 2014

Barclays TNAV

Source: Bernstein 

Barclays’ shortfall of tangible equity as a percentage of net tangible assets, 2014 

Barclays TNAV shortfall

Source: Bernstein 

3. Less middle management

Now is not a good time to be a middle manager at Barclays. McFarlane used his inaugural interview as executive chairman to lambast Barclays’ bureaucracy. He said the bank has 375 “decision making committees” and that it needs “energy and speed” instead. He also described Barclays as “cumbersome” and “not efficient” and in possession of a “very large bureaucracy.”

4. Double down on the US

If Barclays’ European fixed income business is viciously pared back, what will happen to the Lehman rump in the US which is more closely focused on equities and investment banking? As a reminder, neither business did especially well in the first quarter. 

Barua points out that Barclays’ US business also looks under-capitalized. With net tangible equity across the bank standing at just 3.5% of tangible assets, Barclays falls far behind US banks like Citi (7.6%), Morgan Stanley (4.6%) and Goldman Sachs (4.9%). This will make it impossible for the bank to repatriate capital from the US, says Barua. It also leaves McFarlane with a choice: double down on the US business, or pull back and focus elsewhere.

Barua predicts that McFarlane will double down and that Europe will instead feel the pain. “Closing the US would be a very expensive proposition. That’s a great business and the number of strong US broker dealers is shrinking. What you need to do is to strengthen that business, to beef up capital there and to invest in technology.”

5. Empowerment of Trushar 

McFarlane made no mention of Tom King, chief executive of Barclays’ investment bank since May 2014. Instead, the emphasis is on Trushar Morzaria, Barclays’ CFO, with whom McFarlane says he will, “work particularly closely.”

An accountant by training, Morzaria nonetheless has deep experience in the numbers underpinning fixed income businesses. Between 2005 and 2009 he was CFO for EMEA and CFO for fixed income at J.P. Morgan’s investment bank. Before that he was European controller of fixed income at Credit Suisse. Morzaria joined Barclays as CFO in October 2013. The bank subsequently cut the capital allocated to the investment bank by £92bn and placed £90bn of legacy assets into a non-core bank. This was supposed to address the poor returns in Barclays’ fixed income business, but hasn’t. Under McFarlane Trushar may now be given his head.


Chocolate heirs turn to careers in banking

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What do you do with your time if you’re an heir apparent to a confectionery empire synonymous with Crunchies and drumming guerrillas? Polish up your CV and apply to an investment bank.

As we pointed to last year, Leander Cadbury, an Eton-educated heir to the Cadbury fortune (Cadbury was sold to Kraft for £10bn in 2009), was on the hunt for an investment banking job.

This remains the case.

Despite completing an MSc in Finance at Leeds University and undertaking another internship – this time an off-cycle internship in FX sales at J.P. Morgan for four months to December 2014, on top of stints at UBS, Bank of America Merrill Lynch, Coutts and Goldman Sachs – Leander still doesn’t have a permanent position as an analyst.

This is despite being equipped with four A-levels from Eton, a BA in Russian and Economics, the MSc in Finance, five internships and, no doubt, the sort of connections desirable to investment banks.

Leander is not the only Cadbury to pursue a career in banking Share on twitter. James Cadbury, the great-great grandson of George Cadbury, is currently working as a trader for the Universities Superannuation Scheme. This is a role he got the hard way – from moving from a back office operations role at Barclays to the middle office at USS and finally a trading role earlier this year.

These young financiers are also the second generation of Cadburys going into finance, however. Georgina Cadbury, 38, is a director in fund-raising and marketing at hedge fund Palmer Capital.

Man leaves Barclays to become famous DJ

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What with the long, long hours worked by investment bankers, you might think having a life outside work would be impossible. You might also think that being a professional DJ on the international club scene would be as feasible as levitating across the Thames.

Generally, you would be right. But there are always exceptions.

Andrew (Andy) Purnell has spent time as both an analyst in Barclays securitized product strategy group and a DJ for Milkshake at the Ministry of Sound, Kinky Disco, Love Dough and MTV.

Having kept the two gigs running in tandem for two years from June 2013, he recently decided to give one up. Banking had to go.

Since then, Purnell’s Twitter feed suggests he’s been pretty prolific. Last Saturday he played no fewer than three sets. On Friday he played at a club night with MTV. The weekend before that he was playing at Kinky Disco in Lincoln and to ‘a bunch of U18s’ from the US in Switzerland.

Professional DJs can be very well paid. According to Forbes, some are earning millions. Purnell seemingly has no intention of becoming a starving artist. Five weeks ago, he wrote on Instagram that: “Over the last couple of years, I’ve learned that 💷 really isn’t the most important thing… BUT as long as earning enough of it allows me to have experiences in places like this, I’m gonna stay on my grind!!! 😉.”

From now on, any grinding will not be happening in the City.


What Barclays’ investment bankers really thought of Antony Jenkins

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Barclays’ outgoing chief executive, Antony Jenkins, was not a popular person at its investment bank. Now that Jenkins is leaving Barclays, the true extent of this unpopularity is becoming apparent.

We learn, for example, that Jenkins had some denigratory nicknames within Barclays: he was referred to as the ‘The Wet Handshake.’ He was like a neglectful parent: salespeople who were excited at spending time with him ‘visiting clients on the east coast of the UK’ found that Jenkins actually spent most of his time staring at his Blackberry talking in monosyllables. We learn that Jenkins misread his relationship with John McFarlane, the man who ousted who him, and whom Jenkins considered “a special chum” after they sat together on the advisory board at the Cranfield School of Management.

Most damningly, we learn that Jenkins was disliked by Tom King, the head of Barclays’ investment bank. The Financial Times says the tension between the two men was ‘almost unbearable.’ “You wouldn’t want to be in the same room with them,” one Barclays insider told the paper.

It was this dysfunction with King that was Jenkins’ death knell. Unhappy with and unconfident in Jenkins’ strategy for slashing the investment bank, the FT says King threatened to resign. McFarlane then said to have intervened until Jenkins backed down. Now he’s out. If the FT’s account is correct, the outlook for Barclays’ investment bank under its new protective ‘executive chairman’ may not be so gloomy after all.

How to Convert a J.P. Morgan Internship (eFinancialCareers)

Model and ex-JPM intern gives her tips on how she received a full-time offer.

Tasty Business (eFinancialCareers)

Heirs to a huge chocolate empire have instead decided to kick off a career in investment banking.

A Minor Glitch (FT)

The NYSE suffered a mysterious three-hour outage yesterday. Once upon a time this would have been a disaster, but these days the New York Stock Exchange trades just 25% of all US share trading volume.

The Traits of Antony Jenkins (Euromoney) 

 Antony Jenkins: intelligent, considered, private, cold, decent, honourable.

Analyst Ruse (WSJ) 

As a joke, analysts covering the bank would sometimes ask Mr. Jenkins tough questions about numbers at the bank that they knew he couldn’t answer.

Possible Successors to Jenkins (Financial News)

Three possibilities for the new CEO of Barclays: Trushar Morzaria, Jonathan Moulds, Ashok Vaswani.

Needy Narcissists (NYMag)

Narcissists struggle to have rewarding thoughts and feelings about themselves, prompting them to seek out affirmation from other quarters as a kind of compensation for their neural deficit.

A Power Struggle (The Muse)

Stealthy ways to ensure you have the upper hand at work.

Quote of the Day: (Bloomberg)  

“When a major financial utility, a major airline, a major newspaper and a major Zero Hedge all shut down due to computer problems on the same day, I for one stock up on canned goods and ammunition.”

The ideal recruit for this high-paying hedge fund

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Capula Investment Management, the secretive and high-paying hedge fund set up by former J.P. Morgan trader Yan Huo, has been hiring.

Over the last 12 months, headcount has increased in London by nearly 6% – most of these are senior traders making the move across from investment banking.

Even so, Capula has a mere 57 employees registered with the Financial Conduct Authority in London. Finding patterns among such small numbers is hard, but there’s one type of recruit that seems to be favoured – equity derivative traders with Asian exposure.

This month it’s hired Reda El Khayati, a veteran equity derivatives trader from J.P. Morgan in Hong Kong, and Jonathan Vayn, who spent seven years on SocGen’s equity derivatives prop trading desk in the territory.

El Khayati and Vayn are the latest equity derivatives traders to join Capula following the appointment of Cyril Levy-Marchal in April last year. Levy-Marchal was the former global head of equity derivatives trading at J.P. Morgan – and later head of equities trading for Asia. He joined Capula’s expanding HK office.

If you make it to the senior ranks at Capula, the pay can be unusually generous – even in hedge fund terms. Last year, its partners received an average payment of £2.2m, whereas rank and file employees got an average of $425.6k.

Why outstanding Chinese students want your job in finance

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Wall Street’s historic involvement with the Chinese elite has not been a gilded one. Accused of favoring Chinese candidates with family connections over candidates with genuine ability, they have been probed, scrutinized and quietly fined. And yet banks continue to hire Chinese students into roles in London and on Wall Street. Not because their parents are in the Chinese government, but because they’re good. Very good. And, they really, really want to work in financial services.

“Chinese students tend to be quite pessimistic and risk averse,” says one Chinese national who’s been educated at elite colleges in both the UK and the US and has a list of banking and private equity internships that would make the most impressive young bankers squeak with envy. “Their parents came through a difficult time that included revolution and famine and they’re less likely to encourage their children to do something different.”

By way of comparison, he says Americans students are more optimistic and risk-seeking: “You see this percolating through to career paths. They’re more likely to be entrepreneurs. Chinese like banking because it’s a fantastic career outlet when you’re very risk averse.”

Wall Street banks certainly have their share of elite Chinese students. This year’s summer analyst classes at Goldman Sachs, Evercore, J.P. Morgan, Morgan Stanley and just about every other bank you can think of, are replete with Chinese nationals. Most of them have one thing in common: they’ve studied overseas. A typical career path involves a first degree at the London School of Economics, followed by a postgrad at an American school like Columbia or Duke. On the (rare) occasion that they were educated in Asia, they typically studied at the privately run Anglo-Chinese school in Singapore.

Michael Karp, chief executive of the Options Group, an NYC financial search firm, says they’re seeing a lot of Chinese competing for associate level jobs on Wall Street. “It’s grown tremendously in the past 10 years. A lot of these kids are very strong in computer science and math and that really helps.”

Another Chinese national, who works in the technology business of a European bank in London, and was educated in both China and the UK, confirms this stereotype: “The Chinese are very well trained in maths. I did my A level further maths without a calculator.” He adds that the Chinese who make it to London are the best of the best. “The Chinese who come for further study in the UK survived intense competition in China. They are smart and hard-working. Their only problem is the cultural gap.”

If you’re a very bright, very driven, very well-educated Chinese national, it helps too that banks will often help you surmount immigration obstacles. “I was looking to work in a tech firm when I graduated,” says the Chinese banking technologist, “But none would sponsor my visa. So I compromised and applied to banking – Chinese are very pragmatic.”

As Chinese talent moves up the corporate hierarchy, excellent students need to develop different skills. Pragmatism, hard work and excellence are fine, but they won’t get you to the top slots of investment banks. Of 10,000 managing director (MD) CVs in our database, just 7% are from native Mandarin and Cantonese speakers. “We’re too humble,” says the technologist. “We still haven’t found our place in this society.”

The surprising profile of the perfect hedge fund manager

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What does a talented hedge fund manager look like? Is it a 28 year-old man with a bank of computer screens and a thing for protein shakes? Is it a 59 year-old man who became attached to a pet pig? Is it a 42 year-old who retired aged 41 and made a comeback one year later? No. No. And no. On average, it’s a woman.

So says some new research from the (possibly biased) Kyria Capital Management firm, an organization whose stated aim is to help women in alternative investment. Even so, Kyria’s conclusions are objective. After analyzing performance over a five year basis, it found that 40% of women-run hedge funds achieved returns in the top 5% to 25% of funds, compared to just 20% of male-run funds. Female-run funds were also significantly more likely to be in the top 5% of performers.

Despite their talent for alternative investments, there aren’t many hedge funds run by women. Kyria only counted 132 at June 2015, while there are over ten thousand hedge funds run by men. There may therefore be an element of sample bias in the mix: in an industry dominated by men, a woman who runs her own fund will need to be exceptional from the outset.

Hedge fund women

Chinese Elite (eFinancialCareers)

Why outstanding Chinese students want your job in finance.

Ideal Hire (eFinancialCareers)

Hedge fund Capula Investment Management has been on something of a hiring spree. A pattern is emerging.

Smaller Fry (Reuters) 

Barclays has a big issue: its investment bank has shrinking revenue. It has a top three market ranking in just one area – rates trading.

Poached by Perella  (New York Times) 

Perella Weinberg just hired Bruce H. Mendelsohn, the head of restructuring for the Americas at Goldman Sachs. He won’t actually start until the end of this year.

Lehman Who? (Fox Business)

Jeb Bush would prefer that no one knows he worked at Lehman.

Try This (Financial Times) 

Intern? Try typing DINE, FLY and POSH into your Bloomberg terminal.

Don’t Apply  (Business Insider)

Why you don’t want to work for Facebook.


Junior bankers’ poor dietary habits inspire new business

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The first few years of your investment banking career are about adjusting expectations. You are not the Master of the Universe. You are not flying around the world schmoozing clients. You are sitting in a room compiling pitchbooks and working on financial models. And you are eating bad food.

Akshay Bhatia was an analyst in both IBD and investment management at Morgan Stanley. He saw the bad food with his own eyes. “Investment banking analysts live on takeaways and ready meals,” he says. “There’s a perception that when you work in finance you go on expensive lunches with clients, but most analysts and associates grab a sandwich at their desks, usually at odd times of the day like 11.30am or 4pm, depending on your commitments.”

Bhatia says most young bankers are not only working long hours, but lack the experience of feeding themselves whilst doing a full time job: “Most are coming from an environment where the only wholesome, home-cooked food would have come from their parents. And a lot of analysts are from overseas and have left their parents at home to work in London.”

Even so, Bhatia observed that some young analysts did eat healthily, and would bring in lunches they’d cooked for their colleagues.

The situation got Bhatia thinking. After four years in finance, he quit, moved from London to his home country of India and set about launching Mutterfly – a ‘food-sharing’ app that allows people to offer food they’ve prepared to people nearby, for a cost.

“The higher classes in India tend to have power couples where both are in employment, but in the middle and lower classes, it’s still the men who go to work while the women stay at home,” says Bhatia. “For a lot of women here, this is an opportunity to show that they can do – they can get more productive and earn some revenue.”

Unfortunately, the UK has restrictive food licensing arrangements, meaning that you can’t justifiably charge for home-cooked food that could have been prepared in unsanitary conditions. Bhatia’s service therefore won’t be coming to the City any time soon.

Bhatia said that he decided that banking wasn’t for him early on, largely after realising he’d been sold false promised: “Top graduates are brainwashed into thinking that tech and finance careers are the most vibrant, but I realised quite quickly that I needed a change. Initially, I moved into asset management, but after 18 months there I had to be honest and realise I still wasn’t feeling particularly engaged.”

Part of the problem, he suggests, is that he wanted to innovate and the layers of bureaucracy: “When you join a bank, you get the speak that you’re the leaders of the future, that you’re important and they want you to innovate,” he says. “But even small changes in process can take a year to implement. I can understand why, but it’s frustrating.”

Like many investment bankers who move on to new ventures because they’re disillusioned with the financial sector, Bhatia admits that the skills he gained on the job have served him well during the launch of the new product: “Banking teaches you discipline and professionalism, which has helped me get the business off the ground,” he says. “I’ll never say I won’t go back, but I’m going to give myself at least three years running my own business before even considering it.”

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The best banking jobs when you’re in your 20s

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Being a 20-something banker is like being a 50-something poet. You’re in your prime. Long hours come as easily as iambic pentameters and jobs flow to you like readings in village halls.

Just how easy it is to find a banking job in your 20s is demonstrated by the ‘experience distribution’ of jobs on this site. 72% of the jobs which actually specify experience levels are open to candidates with between one and seven years’ experience. The 20-something cohort, in other words.

As per our article last week on jobs for finance professionals aged 35+, the distribution of finance jobs by experience looks like this:

Best banking jobs when you're 35

Just as some jobs in banking are more skewed towards people aged 35+, other finance jobs are disproportionately skewed towards people in their 20s. An analysis of the jobs advertised on this site suggests that if you have less than seven years’ experience in financial services, you’re best off applying for jobs in…equities.

As the graph below shows, however, it’s not that simple.

Different sectors have different requirements within the seven-year experience range. If you have one to three years’ experience, jobs in trading and private equity are particularly skewed in your favour. When you have three to five years’ experience it’s trading, M&A and private equity (although some jobs in private equity may require M&A experience first). And when you have five to seven years’ experience, operations and equities jobs are particularly slanted to you. At this stage, jobs in private equity and trading and relatively hard to come by.

And the jobs that are less accessible to 20-somethings? Unsurprisingly, they’re in risk and compliance, where 63% and 62% of jobs require less than seven years’ experience respectively. Even here, though, a clear majority of roles are skewed towards the young. Wisdom counts for something in financial services, but intelligence, enthusiasm, youth, and cheapness count for more.

 

The languages that will get you a job at Goldman Sachs

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You want to work for Goldman Sachs. Which language will get you there?

The firm itself has been promulgating the chart below on its Google+ page. If you want to work for GS, it helps to converse in these tongues.

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Languages Goldman Sachs

Or does it? According to Unesco, the world’s most widely spoken languages are Mandarin, English, Spanish and Hindi – in that order. So, Goldman Sachs simply employs people from around the world. Except the French. The French are disproportionately likely to get a job at Goldman Sachs. Time to brush up your irregular verbs.


Can you save money as a junior in investment banking?

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Junior bankers can earn a lot of money. They can also spent a lot of money. Living near the office in a leading financial centre like London doesn’t come cheaply and if you’re not careful, the two things can cancel each other out. So, can you really save money as a junior banker? And can you save enough to buy a house?

The answer to the first question is a resounding yes. The answer to the second question is a definite maybe.

“Living costs are high, but you can definitely save money,” says one recently ex-Goldman trader. “You’re working long hours and you don’t take much holiday, so you end up putting money aside. That said, it’s impossible to save enough to actually buy anywhere near work. Most people just save so that they can buy somewhere in the future.”

With even a studio apartment in Central London costing £454k, the bankers we spoke to said no one buys their own place unless they’re helped out by parents. Instead, most young bankers try to live frugally and have a large enough deposit once they’re five or six years in – at senior associate and vice president level.

“I got a couple of good bonuses in my associate years and they enabled me to buy a very, very small place near to work,” says one saleswoman. “I was lucky though – most people take longer, and if you’re being dragged towards people with higher spending power than you, it’s almost impossible to save. You need to keep living like your uni friends who are working in other industries.”

One of the analysts we spoke to said she’s living with her parents. “I am saving – much more than I would if I worked in any other sector,” she told us.

An executive director at Goldman Sachs told he’s saved, “a reasonable amount” over a seven year period: “I bought a flat three years ago, I travel a lot and I still have a good amount of savings.”

He says saving money in banking is, “a question of lifestyle and how good you are at managing your money. – I am not frugal but I am not extravagant either. Not all my earnings are eaten up by my own cost of living; so I have managed to save money nearly every month since I started as a graduate. Some people are extravagant and careless with their money, so they don’t save anything.”

Sam Polk, the ex-BofA trader who wrote about getting addicted to money while working on Wall Street said of course you can save when you’re working in banking – that’s the whole point. “The thing about Wall Street is that while you think about money all the time (how big your bonus is going to be), you never have to worry about it in the way that regular folks do. After that first bonus, you basically always have a cushion, and within a few years there’s basically nothing, except houses, that you can’t afford.”


13 questions you will always be asked in a corporate banking interview (and how to answer them)

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You are about to interview for a relationship manager job in corporate banking. What questions should you expect and how should you answer them?

We have identified 13 key corporate banking job interview questions that you are almost certain to be asked.

1) How much revenue did you generate last year?

You will probably be asked this question before you’ve even taken a seat in the interview room. “At this time of economic uncertainty, banks want to ensure they employ a productive RM who’s able to justify their investment, so they need a clear indication of how much you might bring to them in the future,” says Maggie Li, a manager at recruitment firm Randstad.

2) And what have you done to achieve your targets so far this year?

An obvious follow-up to the question above – banks want to know about your ongoing performance, not just your track record. “Be very specific on your monthly, quarterly and annual targets and show that you’re matching your bank’s goals,” says Ellen Lai, a manager at recruitment agency Michael Page. “But don’t just focus on your own billings – talk about clients who you helped to break in and projects you facilitated to maximise the bank’s revenues. Banks are interested in your sales style.”

3) What makes clients call your first?

This questions aims to draw out how good you are at building relationships. Norman Leung, a managing consultant a recruiters Hudson, provides this potential answer: “I build trust by knowing my client well. Firstly, on personal basis by knowing about their personal interests and their family, and secondly, on a professional basis by providing up-to-date intelligence on market conditions, regulations, and what their competitors are doing. I also add value by asking relevant questions and providing solutions so the client sees I understand their challenges and priorities.”

4) Would you consider yourself a hunter or a farmer?

Unless the job description suggests otherwise, you are advised to describe yourself as a hunter – someone with strong sales skills – rather than a farmer, who merely manages accounts. This is also a good opportunity to talk up your soft skills, say Andrew Clark, a manager at recruiters Robert Walters. He suggests this reply: “I have an independent portfolio of clients that I grew from 10 to 30 in a span of just one year, so I would definitely consider myself a hunter as my strength lies in originating new deals.”

5) How strong are your credit skills?

Some RMs jobs require writing your own credit proposals, while in others you will be fully supported. Either way, make sure you can talk in detail about your credit-assessment ability, says Jasmine Tan, an associate director at recruiters Kerry Consulting. Clark adds this example: “During my early career I worked as a credit analyst for three years supporting RMs to write credit papers. This gave me 360-degree knowledge into credit processing and onboarding.”

6) How have ever you managed an entire mandate?

Interviewers will be impressed if you’ve taken a corporate-banking deal from origination to revenue conversion, so come armed with examples, says Leung. You need to talk through the process step-by-step, explaining how you first listened to the client’s challenges, proposed potential solutions, implemented them and then followed up with the client.

7) How many clients can you bring to us?

Banks obviously like to hire RMs who can transfer some of their portfolio, so emphasise the strength and length of your relationships as evidence that your clients would be happy moving with you. Clark from Robert Walters suggests an answer along these lines: “I’ve worked with mid-tier energy-commodity companies since the start of my career and have an independent book of 20 legacy clients. So yes, I do have a transferable portfolio.”

8) What is the turnover and size of the companies that you cover?

You should answer in detail about the turnover size of your clients, says Clark. For example: “I cover a range of corporates in the mid-markets segment that typically have a turnover of US$100m to US$300m.”

9) And what industries and geographies do you cover?

“Bank always need to ensure that your client segments align with their own business objectives,” says Lai from Michael Page. Make sure you focus on clients and markets that are similar to those covered by the new bank.

10) How did you acquire your portfolio?

This is a more indirect way of asking the hunter/farmer question above. “Interviewers want to clearly understand whether you acquired these clients yourself or whether you inherited them,” says Tan from Kerry Consulting. If too many were given to you, you risk being labelled a farmer.

11) How would you advise your clients about dealing with falling oil prices?

Not all the questions in a corporate banking job interview will be about revenue and relationships – some, like this one, are designed to test your market knowledge and therefore your ability to advise. Your answer should show that you understand your clients’ challenges and how a new regulation or market trend, for example, will impact their business now and in the future, says Leung from Hudson.

12) What kind of products do you sell?

Even if you have brilliant all-around product knowledge, you need to focus your answer on products that the new bank specialises. “RMs from different disciplines have various product areas that require unique skill sets,” says Li from Randstad. “RMs in SME banking are more focused on vanilla products like deposits, trade finance, insurance and investment products, while those with global clients have more experience with structured products and strategic deals.”

13) How do you probe your clients to understand their product needs?

“You should talk about your soft skills – your capability to listen and ask relevant questions,” says Leung. “And give specific examples, without divulging client names or confidential info – show how your dialogue came to a fruitful conclusion and how you closed the deal, enhanced revenues and benefited the client and the bank.”


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