Employment prospects in the Finance industry. (1 Viewer)

[galaxys2000]

Hey guys,

I was recently talking to a mate whos been working at Goldman Sachs for 2 years now, and something he said was incredibly interesting to me; Investment Banks & Financial Service Companies are increasingly hiring graduates with STEM related degrees over the traditional commerce & commerce/law graduates. The rationale being that many of these STEM graduates have developed analytical & technical skills during their degree which will aid in transitioning towards a finance related job. [Eg. Bachelors of Information Systems/Advance science/Computer Engineering]. Can anyone currently working in the finance industry validate this statement?

The reason I ask if that UAC Applications are going out soon, and I was originally looking at perhaps doing Com/law at UNSW, but with this new information, I'm possibly thinking of doing Com/Sci instead. ATAR is not an issue for these courses, but moreso the employment prospects in the finance industry as graduates. (I also don't mind going into some sort of analyst role either).

[Side Note] Is it worth it to accept a cadetship with an accounting firm, work there for 2-3years, and then transition into a finance related role? Thats the other path I see myself perhaps going towards, but that being said, I've already rejected a cadetship offer because I believe working full time straight out of high school will be too demanding, and that I also want to focus on other aspects of my life/career.

[Side Note 2] Does anyone with experience know the career path towards a portfolio manager? Eg. What relevant industry experience you need and how long does it take?

Thank you in advance.

 

[andrew12678]

Hey guys,

I was recently talking to a mate whos been working at Goldman Sachs for 2 years now, and something he said was incredibly interesting to me; Investment Banks & Financial Service Companies are increasingly hiring graduates with STEM related degrees over the traditional commerce & commerce/law graduates. The rationale being that many of these STEM graduates have developed analytical & technical skills during their degree which will aid in transitioning towards a finance related job. [Eg. Bachelors of Information Systems/Advance science/Computer Engineering]. Can anyone currently working in the finance industry validate this statement?

Thank you in advance.

You will get a lot of mixed opinions on this one, there will be a lot of deniers from people who do traditional business degrees and a lot of supporters from the technical STEM side so I'm going to provide some advantages of both sides so you can make your mind up yourself. I guess we'll start with the traditional Commerce/Law routes into Finance. The business schools (well from what I know definitely USYD) do tend to have stronger industry placement programs for their students than compared to lets say the Maths/IT departments so it can often be easier to get your foot in the door from the business side. A business degree is also pretty much essential for most of the Financial Services type jobs like Accounting etc where STEM students won't even be considered (not that they wanted to apply in the first place either). However, a STEM student (ones that did not do Medical Science subjects and Biology etc majors) will be considered however for any role that involves problem solving-yes that would Investment Banking, Trading, Management Consulting, Analysts etc. Infact, they probably would not just be considered but rather have developed stronger critical +problem solving thinking skills than their Commerce counterparts (not always true but most of the time). Furthermore, these students would also come with skills such as programming languages, statistical knowledge etc which are a huge bonus. So despite not having the specific financial knowledge and industrial placement support from their faculties these students would have no problem with applying for these jobs themselves and establishing themselves as strong candidates during the interview process.

At the end of the day I just see both pathways as equally viable as of right now (I'm not sure about the future but it seems to lean towards the technical side of things with AI/Machine Learning etc) so just pick whichever side you see yourself doing the best in as mediocrity in either path will not do you any favours. Unfortunately I don't know anything about your other 2 questions so I will leave those for someone else

 

[Amundies]

To your second point, don't worry about it that much. Also depends if you want to work on buy or sell-side. Focus on getting into what you want first.

BTW, if you're just aiming for IB/MC/Corporate Finance, just do a straight Commerce degree and smash it. You don't need an additional degree if you don't see the 'need' of doing it. If you want to work in areas of trading, a mathematical bg helps (comp. sci/econometrics etc.)

I agree with si2136, focus first on getting into what you want first before thinking about how to become a PM. That said I don't really understand it when people ask what the path is to becoming a PM. If you work in the buyside, you get promotions (just like every other industry), one of which is a promotion to a PM role.

Will have to slightly disagree with the "just do a straight comm degree" though. If you do a double degree (like engg/comm) you spend more time in uni, which gives you more time to build up a resume and get into exactly what you want. With a straight comm degree, if you dont get an internship where you want between 2nd and 3rd year, you don't have any "backup" years to try again. So while you don't strictly need an extra degree, I've found it to be quite useful.

 

[DJYeetz]

should I do double degree economics/commerce at UNSW if i want to become a investment banker?
P.S What other career options will these degrees give you plus what are the advantages of having a economics degree.

 

[pistachioman]

Work at the Sydney exchange square. ASX or SSX?

basically you will be living the lifestyle of DiCaprio in 'The Wolf Of Wall Street'. The Australian dream.

jusjoks

 

[blyatman]

That really depends on the nature of the job. In the end, job experience is everything, so for an experienced professional, their degree doesn't matter. Hence, I'll discuss this in the context of fresh graduates.

To my knowledge, IB still predominantly hires people with degrees in finance. However, other positions, like financial traders, ONLY hire graduates with STEM backgrounds - the rationale being exactly what you stated: teaching the finance side of things to STEM graduates is easy, but you can't teach analytical thinking to finance graduates. All my friends in IB have finance degrees, whereas all my friends in trading have STEM degrees. I myself am an engineer, but I've been offered jobs as a financial trader before.

For portfolio/hedge fund managers (IB), I would think they predominantly come from finance rather than STEM degrees. Finance positions typically only require STEM backgrounds if it is heavy in computations (e.g. traders, actuaries, etc).

If you're super worried, you can always just do a combined engineering/science + commerce/finance degree. But that will cost you time and money.

 

[pistachioman]

Im just curious blyatman on why you did your engineering degrees in the USA?

 

[blyatman]

Im just curious blyatman on why you did your engineering degrees in the USA?

I did both my undergrad degrees and my MPhil in Sydney. I'm just doing my M.S. in the US (I was originally doing a PhD in the US, but decided not to continue on with it).

There are 2 main reasons I chose a US institution
1. US universities are famous for their STEM graduate programs (they pretty much dominate the list of top universities).
2. I prefer the structure of US STEM graduate programs to the Australian and European systems (this is probably related to reason 1).

In regards to 1: As someone who has experienced STEM graduate programs in both countries, I can honestly say that there is a huge difference in quality and capability between the Australian and American graduate programs. This is probably attributed to the fact that US institutions have considerably far more funding and resources, which allow many of them to be pioneers in certain industries. In contrast, there is nowhere near as much research funding in Australia - the Australian Research Council needs to divvy up the pie to various research sectors, and it really depends on who can lobby them the hardest to convince them that their research area is more important. As a result, many departments are significantly underfunded, and it's why we currently see this mass exodus of talent from Australia to the US.

In regards to 2: US graduate programs are very different to those in Australia and Europe. In Australia and Europe, you can enter the PhD program straight from a Bachelors (usually with honours), and I felt like it didn't require a whole lot of effort to get in (if you have a Distinction average, the chance of you getting in is very high). In contrast, to get into the US STEM graduate programs, you need to sit the GRE's (graduate equivalent of the SAT's), submit your CV, submit 3 letters of recommendation, submit an essay detailing why you want to go to graduate school and the professors you'd like to work with, and in some cases, go through interviews. Once you get in, you typically need to take 2 years of graduate-level coursework. After this, you sit the PhD qualifying exams in your field of study, and if you pass, you are admitted as a PhD candidate. As a PhD candidate, you are usually still required to take graduate-level courses to keep learning. In addtion, almost all PhD's in the US are funded by research grants, meaning that the research is being funded by some group who sees some application in your research (whereas in Australia, you can just find an interesting topic for your PhD and get a professor to supervise you).

Some people might prefer the Aus/Euro systems, and to each their own. Just that I personally prefer the US system.

 

[boat460]

If you're into prop trading a STEM background with a heavy emphasis on maths is required.