Connections Aren’t Everything

Undoubtedly, in terms of getting finance jobs, it helps if your father owns a hedge fund or your aunt is president of a major bank. And if your father does own a hedge fund or your aunt is such a president, you probably are not scouring the web for job advice. But for those who are looking for any tip they can get to land a job in finance, not having such a connection does not mean that you will never get a job. Though it may not always seem like it, for finance jobs what you know really does matter more than who you know.

The first testament to this statement is the interview process. Interviews for finance jobs, especially those at Bulge Bracket banks, are notoriously rigorous and require a large amount of technical knowledge. Interviews usually begin with the basic questions about the candidate’s background and his or her choice to apply to the specific firm. Next there are more job-specific questions. I.e. if you are applying for an analyst or trading position, you might be asked about your own stock portfolio or queried about the day’s Wall Street Journal news. And then, especially in second- and third-round interviews, there will be a series of more extended logic and scenario-based questions. These might be back-of-the-envelope calculation questions, such as: “How many ping pong balls could you fit into a 747 jet?” Or they can involve industry-specific scenarios, such as having the candidate decide whether to long or short a certain stock. Getting these second and third types of questions right is crucial to landing a job at a bank or other financial firm, and any candidate would be hard-pressed to lie his or her way to a suitable answer. You have to know your stuff—and know it well.

Once in a job in the finance realm, where you may be working on multi-billion-dollar mergers and acquisitions or with multi-million-dollar funds, it is even more vital to have the correct technical know-how. Even small mistakes can have large consequences, especially when dealing with other people’s money. Candidates who rely solely on who they know will find themselves easily caught in the big, stinking puddle of what they do not know.

To digress a bit, I once had a friend whose grandfather had donated a building to an Ivy League school and whose older sister had then been denied from that university. She was by no means dumb, but she perhaps partied a little too hard in high school and took a couple things for granted. Of course getting into a finance company and getting into college are much different (case in point: in the first instance they give you a salary, in the latter you pay to be allowed to stay), but the example goes to show that even if you do know someone, it is not always a guaranteed in. You have to have the goods to make the institution behind that someone believe in you.

So even though “networking” is the word on the tip of every career counselor’s tongue, candidates cannot only focus on this aspect of the job-hunting. Studying is equally, and probably even more, important. Nor does the importance of learning and improving on your skills stop once you have landed a job. The American dream of “making it” through hard work, sheer determination, and a good bit of knowledge acquisition is not entirely dead.