MASTERPLAN for Investment Banking Job - Don't Miss Point #4

Summary

This video offers a comprehensive guide for those aiming to enter investment banking, particularly post-MBA, through 'back office' roles. It clarifies the nature of these roles, detailing their supportive function to the 'front-end' team, focusing on data analysis and research. The video outlines the skills required, such as financial knowledge and proficiency in Excel and PowerPoint, and emphasizes the value of the CFA Level 1 certification for job seekers, especially from tier 2/3 colleges. It also provides practical advice on company selection, interview preparation, and leveraging LinkedIn for job applications, aiming to equip viewers with the knowledge to make informed career decisions in investment banking.

Takeaways

• 🏦 The 'back office' in investment banking refers to roles that support the front-end team with data analysis, research, and presentations.
• 🎓 Roles in the back office are often designated with the title 'analyst', such as research analyst, private equity analyst, or investment banking analyst.
• 📊 Back office roles typically involve tasks like creating company profiles, financial analysis, and using databases for research purposes.
• 💼 Essential skills for back office roles include financial knowledge, proficiency in Excel for data analysis, PowerPoint for presentations, and effective use of LinkedIn.
• 💼 The average package for back office roles in investment banking is 6-8 LPA, with a significant portion being a fixed salary.
• 🎯 Targeting boutique firms can be more fruitful for students from tier 2/3 colleges or those from non-traditional backgrounds like arts or fashion designing.
• 📚 The CFA Level 1 certification is highly recommended for those aiming for back office roles in investment banking, as it can significantly improve the chances of being shortlisted.
• 💼 Participation in finance-related clubs, societies, and internships can bolster a candidate's profile for investment banking roles.
• 📘 CFA books and resources from websites like CFI are recommended for preparing for the role, while online courses on platforms like Udemy can supplement understanding of financial concepts.
• 🔍 LinkedIn is a crucial tool for job search in investment banking, and reaching out to decision-makers like associate directors, directors, AVPs, or VPs can increase the likelihood of getting hired.
• 📝 The interview process for back office roles typically includes technical and HR rounds, with a focus on financial knowledge and understanding of the candidate's motivations and values.

Q & A

What is the role of the 'back office' in investment banking?

The 'back office' in investment banking, also known as the 'backend' team, plays a supporting role to the front-end team. They assist with data, analysis, and research to help the front-end team present data to clients.

How can someone from a non-traditional background like arts or fashion design enter investment banking?

Even if you're from a non-traditional background, you can enter investment banking if you're CFA Level 1 certified. This certification, along with relevant financial knowledge and skills, can help you secure a position.

What are the typical designations for backend roles in investment banking?

Typical designations for backend roles include 'analyst', which can be preceded by titles like 'research analyst', 'private equity analyst', or 'investment banking analyst'.

What are the main responsibilities of a backend team in investment banking?

The backend team's main responsibilities include researching and analyzing data, creating company profiles, and performing financial analysis to support the front-end team's presentations to clients.

What are the skills required for a backend role in investment banking?

The skills required for a backend role include financial knowledge, proficiency in Excel for data analysis, knowledge of PowerPoint for presentations, and the ability to use LinkedIn effectively for job searches.

Which professional certification is recommended for someone aiming for a backend role in investment banking?

The CFA (Chartered Financial Analyst) certification, specifically Level 1, is highly recommended for those seeking backend roles in investment banking.

What is the average package for a backend role in investment banking?

The average package for a backend role in investment banking is 6-8 LPA, with a significant portion being a fixed salary and the rest being variable based on performance.

How can tier 2/3 college students increase their chances of getting a backend role in investment banking?

Tier 2/3 college students should target boutique firms, as their chances of getting through are higher there. Additionally, obtaining a CFA Level 1 certification can significantly improve their prospects.

What resources are suggested for preparing for a backend role in investment banking?

Recommended resources include CFA books, courses on the CFI website, financial modeling, derivatives, statistics, valuation, and ratios courses on platforms like Udemy, and joining financial consulting clubs on LinkedIn.

How important is LinkedIn in the job search process for investment banking roles?

LinkedIn is crucial for the job search process in investment banking. It's used to approach decision-makers, get referrals, and express interest in job opportunities.

What should one include in a message to a potential employer on LinkedIn when applying for a backend role?

When reaching out on LinkedIn, one should include a personalized message expressing interest in the role, a brief introduction, and attach a cover letter to improve chances of getting a positive response.

Outlines

00:00

🏦 Introduction to Investment Banking Backend Roles

This paragraph introduces the concept of 'back office' or 'backend' roles in investment banking, particularly for those entering the field post-MBA. It explains that these roles are primarily supportive, assisting the 'front-end' client-facing team with data analysis, research, and presentations. The backend team's main responsibility is to provide the necessary data and analysis that the front-end team uses to make investment recommendations to clients. The paragraph also touches on the types of tasks a backend analyst might perform, such as creating company profiles and conducting financial analysis. It mentions that the backend roles are often not as intellectually stimulating as front-end roles and are more focused on data analysis. The required skills for these roles include financial knowledge, proficiency in Excel and PowerPoint, and the ability to use LinkedIn effectively. The video also provides insights into the types of companies that offer these roles and the average compensation package, which is around 6-8 LPA, with a significant portion being variable based on performance.

05:02

🎓 Becoming a Preferred Candidate in Investment Banking

The second paragraph delves into how to become a preferred candidate for investment banking backend roles. It emphasizes the importance of obtaining the Chartered Financial Analyst (CFA) Level 1 certification, which significantly increases the chances of being shortlisted by companies. The paragraph also suggests taking on positions of responsibility in college clubs and societies, undertaking finance-related internships, and learning SQL as an optional skill. It highlights that even non-finance students, such as those from arts or medical backgrounds, can enter investment banking if they have the CFA Level 1 certification. The paragraph further provides practical resources for preparation, including CFA books, courses on the Corporate Finance Institute (CFI) website, and online finance courses on platforms like Udemy. It also recommends joining finance-related consulting clubs on LinkedIn to gain practical experience and build a strong CV. Lastly, it advises staying informed about economic developments, which are often discussed during interviews.

Keywords

💡Investment Banking

Investment banking refers to a division of a bank or financial institution that serves governments, corporations, and individuals in raising capital by underwriting or acting as the client's agent in the issuance of securities. In the context of the video, it is the sector that the speaker is discussing, particularly how to enter it after completing an MBA. The video explains that investment banking roles after MBA are typically client-facing, which involves interacting directly with clients to provide investment advice or services.

💡Back Office Role

A back office role in investment banking is a support function that does not directly interact with clients. It includes tasks such as data analysis, research, and preparation of presentations used by the front-end team. The video script mentions that these roles are often referred to as 'analyst' roles, like 'investment banking analyst' or 'research analyst,' and are crucial for the front-end team's success as they provide the necessary data and research.

💡Front-End Team

The front-end team in investment banking is responsible for client-facing activities, which includes presenting investment opportunities and advice directly to clients. The video script contrasts the front-end team with the back-end team, emphasizing that while the front-end engages with clients, the back-end supports them with research and data analysis.

💡Data Analysis

Data analysis in the context of investment banking involves examining and interpreting financial data to support investment decisions. The video script highlights that a significant part of the back office role is data analysis work, which may include creating company profiles, financial analysis, and using specific databases for research.

💡Financial Knowledge

Financial knowledge is the understanding of financial instruments, markets, and theories, which is essential for roles in investment banking. The video script emphasizes that financial knowledge is the most significant skill required for back office roles, and it suggests that obtaining a CFA (Chartered Financial Analyst) certification, at least at Level 1, can significantly improve one's chances of getting a job in this field.

💡CFA (Chartered Financial Analyst)

The CFA certification is a globally recognized qualification for professionals in the investment industry. The video script suggests that CFA Level 1 certification is particularly valuable for those aiming for back office roles in investment banking, as it demonstrates a foundational understanding of financial analysis and investment tools.

💡Boutique Firms

Boutique firms are smaller investment banks that may focus on specific sectors, work with a limited client base, or offer specialized services. The video script advises that students from tier 2/3 colleges should target boutique firms, as they might have a better chance of getting hired there compared to larger investment banks.

💡LinkedIn

LinkedIn is a professional networking platform used for job searches, networking, and professional branding. The video script mentions that LinkedIn is an essential tool for job hunting in investment banking, as it can be used to connect with potential employers, get referrals, and apply for jobs.

💡Technical Round

A technical round in an investment banking interview is a stage where candidates are assessed on their technical knowledge and skills, particularly in finance. The video script explains that during the technical round, candidates' understanding of financial concepts, such as financial statements and ratios, is tested, and it is crucial for candidates to be well-prepared with knowledge up to the CFA Level 1 syllabus.

💡HR Round

The HR round in an investment banking interview is focused on evaluating a candidate's values, motivations, and cultural fit within the company. The video script indicates that in the HR round, questions about why a candidate wants to join the company and their personal values are asked, which helps the employer assess if the candidate is a good fit for the organization's culture.

Highlights

A video explains how to enter investment banking, especially post-MBA, via 'backend' or 'back office' roles.

The 'back office' role in investment banking primarily supports the 'front-end' team with data analysis and research.

Designations for back office roles often include the term 'analyst', such as 'research analyst' or 'investment banking analyst'.

In India, most investment banking roles after MBA are backend roles, focusing on data analysis rather than client interaction.

Back office roles may involve creating company profiles and conducting financial analysis for investment decisions.

Key skills for back office roles include financial knowledge, Excel for data analysis, PowerPoint for presentations, and effective use of LinkedIn.

Major recruiters for back office roles in investment banking are listed, with boutique firms being more accessible for tier 2/3 college students.

The average package for back office roles is 6-8 LPA, with a significant portion being variable based on performance.

CFA Level 1 certification is highly recommended for becoming a preferred candidate for back office roles in investment banking.

Taking up positions of responsibility in college clubs, internships in finance, and learning SQL can enhance a candidate's profile.

CFA books and resources from CFI's website are recommended for preparing for back office roles in investment banking.

Online courses on platforms like Udemy can supplement knowledge but are not a guarantee for shortlisting.

Joining consulting clubs on LinkedIn and participating in projects can enrich a candidate's experience and CV.

Understanding current economic trends is crucial for interviews, and relevant resources are suggested for candidates.

LinkedIn is highlighted as a key tool for job search, with advice on approaching decision-makers for better chances of shortlisting.

The interview process typically involves an aptitude test, technical rounds, and an HR round, with a focus on financial knowledge up to CFA Level 1 syllabus.

An extensive list of interview questions is available to help candidates prepare for the technical aspects of investment banking interviews.

Transcripts

A video was published recently on this channel

that explained how to get into investment banking

especially after MBA.

The answer was, via IB "backend" or "back office "role.

What is this back office role?

How to apply for it?

And if you're a tier 2/3 college student

or are from an arts background

or fashion designing,

can you enter investment banking then?

The answers to these questions + many other resources

have been shared by students

who are doing this job.

That will help you make the right choice

of whether you'd want to get into investment banking or not

and if you want to, what is the right path?

There are 5 parts to this video.

You can also use the timestamps.

I'm going to start with the first part which is understanding

what is this backend industry

and what'll be your role?

[music] Industry & Role

The investment banking or private equity roles

offered after MBA are

client-facing roles.

There's a corporate or individual who is your client

and they're supposed to take an investment decision

whether it is of buy-side or sell-side.

Rather than getting into the technicals,

just understand that

when you get into IB after MBA,

you're in a client-facing role,

you are a part of the front-end team.

But, the presentations shown by the front-end team

and the data that is used

is researched by a team called the backend team.

I'm using a very simplistic definition here.

Obviously, there are other responsibilities too,

but their major role is a supporting role.

They assist the front-end team with

data, analysis, and research

and support them

so that the front-end team can present the data to clients.

What are these roles called?

The word used in their designation is "analyst"

and it can be preceded by anything like

research analyst, private equity analyst,

investment banking analyst.

In India, there are mostly backend roles only.

The advisory roles are offered after MBA

where you get to advise the client.

This is why I was told that the backend role

is not very intellectually stimulating.

There's a lot of work but

you don't need to exercise your mind a lot

mostly it is data analysis work.

So, what are you basically going to research?

As a part of it, you may be asked to make company profiles.

For instance, if an investment bank is suggesting the client

to invest in a particular company,

in that case you may be asked to make the profile of the company.

Or you may be asked to dig in info on that company

For example, some ratios can be asked,

you can be asked to do a financial analysis.

There are some databases used for this.

I'll display the names of some databases here

you can go through them.

You'll get to know what people use to do this research in the backend role.

So, what are the skills required for this role?

The biggest skill required is financial knowledge.

We'll discuss shortly how to acquire this.

Other than that, you should know Excel for data analysis.

For presentations, you should know PowerPoint

and should know how to use LinkedIn.

LinkedIn is used in the job search.

Again, we'll discuss this ahead.

But, these are the skills required for this job.

The second part of this video is - which all companies

offer this role and

what is the average package?

[Music] Companies & Pay

The students that I talked to shared

a list of companies

that have been segregated into 2 parts.

On the screen, you can see a line.

On the left side are the major recruiters for this role.

On the right side are the boutique firms.

They're either small in size or

work with limited clients only or

work with the investment banks of a particular sector only.

But, this bifurcation is important

because those who have studied from tier 2/3 colleges

very important for them to

target the boutique firms.

Here, I don't mean that tier 2/3 college students

shouldn't apply in the other companies,

you should apply everywhere possible.

But, your chances of making through

are more in boutique firms

so your agenda should be to target them.

The average package of this role is 6-8LPA.

In investment banking, the major component is fixed.

So, approx 5.5-7L is fixed

and the rest of it is variable.

The variable component further depends on your performance

as well as the company's performance.

The same takes place after MBA.

Now that you have the list of companies also,

now we'll talk about the selection -

how can you become a preferred candidate?

[Music] Preferred Candidate

I was clearly told by all the people that I talked to,

that there are many professional certifications in the market like

CFA, CA, CMA, FRM

but out of them, there's just one certification that you need

which is CFA.

That too, till Level 1.

You should prepare for CFA in your final year.

You can take it in the final year.

So, in your final year,

prepare for CFA exams

It takes approx 6-11 months to prepare for this exam.

So, that should be your single-handed focus

in fact, that is the biggest thing

that can land you a shortlist from any of these companies.

Please make sure that

if you want to get into IB,

and you're not from tier 1 colleges,

a very good chance of making through is

if you're CFA level 1.

The rest of the drill must be clear to you.

If your college has clubs and societies, take a POR

i.e. a position of responsibility.

Take up internships in finance.

That you'll get via LinkedIn, there's a video on that you can watch.

I'll give you some examples of projects in the next section.

A language that was suggested which is optional,

which you can do is SQL.

Here, I'd like to point out that

if you're a non-finance student like arts student or a doctor,

even then you can make it to these firms

as long as you're CFA L1.

Now, we'll talk about the practical resources

that you can use to equip yourself

to face the interview for these jobs.

[Music] Prep Resources

The two biggest sources recommended here were

firstly, a set of CFA books

that I'll also link below.

Secondly, the information on CFI's website,

was suggested to be read along with its courses.

A common question here is that

should we do the online courses on Udemy or other websites?

There are many such courses but these

will not guarantee that you'll get a shortlist.

For a shortlist, you need CFA L1.

These courses will help you understand more about finance.

You can use them to build your knowledge.

There's financial modelling, derivatives,

statistics,

valuation,

and ratios - courses on these topics

can be taken up.

There are many consulting clubs online on LinkedIn,

There'll be names on the screen and

links in description, you can join them

They keep sharing projects

that you can take up and add to your CV.

You can also practice making financial reports

For a sample, I'll link it in the description.

A person I talked to,

had shared samples of these reports.

You can try them out and even try making one yourself.

The final thing you need is to know what's happening in the economy

that'll be asked in the interview.

For that, the resources will be linked to the screen.

You can refer to that.

The final part of this video is the application process

as well as how to get selected.

What'll be asked in the interview?

[Music] Applying & Interview

The companies that I shared have their own career pages too

You can also upload your CV there.

But your chances of shortlisting will be lower there

Your chances will improve by using LinkedIn.

LinkedIn is such an important source for job search.

You have to approach, get referred and share inclination with

the right set of people that you want this job.

Who are these people?

A mistake students make is they reach out to associates or senior associates.

Those are not the right ones, you should approach the ones with decision making authority

to hire you.

These people are associate directors, directors, AVPs or VPs.

On LinkedIn, search for any of these companies + any of these positions.

Then send a message to the relevant person.

Now, many of you may want to know what is to be sent in that message?

A person I talked to was kind enough to share his template

If you also attach a cover letter, that'll improve your chances.

When you receive a positive reply, you'll have 3 rounds in most cases.

In case of campus hiring, there are 3 rounds, else 2 rounds.

In case of campus hiring, the first round will be an aptitude test.

It checks your English, Logical Reasoning & basic aptitude.

If you're applying off-campus, you'll have the 2 common rounds

1. Technical 2. HR Round

In HR round, your values, why you want to join - all this is asked.

In technical round, your knowledge of finance will be tested.

Some companies like global banks may even take 4 tech rounds.

But, the boutique firms may take only 1-2.

No one asks beyond CFA L1 syllabus.

You need knowledge of financial statements, ratios,

enterprise value and others.

There's a list of questions shared

by someone which is super extensive

you can refer to it to prepare for these interviews.

This is broadly about the backend investing role, if you want to get into this job role,

you can reach out if you have any unresolved doubts in the comments section.

Thank you so much for watching this! :)

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