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John M' Knab, CEO Phonex Corporation

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'What's the difference between an investment banker and a pigeon? ... Business acumen. Team orientation. Writing skills. Presentation skills ... – PowerPoint PPT presentation

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Title: John M' Knab, CEO Phonex Corporation


1
John M. Knab, CEO Phonex Corporation
Careers Within Finance
  • November 20, 2008

2
Career Topics
  • Investment Banking
  • Corporate Finance
  • Money Management
  • Financial Planning
  • Commercial Banking
  • Real Estate
  • Insurance
  • Consulting
  • Big Four
  • Venture CFO
  • Venture Capitalist

3
Investment Banking
  • Whats the difference between an investment
    banker and a pigeon? The pigeon is the only one
    who can still make a deposit on a Lexus
  • IBs help companies and governments issue
    securities, help investors purchase securities,
    manage financial assets, trade securities and
    provide financial advice.
  • Bulge Bracket Merrill Lynch SalomonSmithBarney
    Morgan Stanley Dean Witter and Goldman Sachs.
  • Regional investment banks Piper Jaffray
  • Small boutiques oriented toward bond-trading, MA
    advisory, technical analysis or program trading.

4
  • Many starry-eyed megalomaniac has followed the
    siren song of Wall Street. Money, prestige, and
    power await them as they waltz off into the
    promised landor so they think. They soon
    discover that the seductive sirens are actually a
    band of bowlegged seahags. The promised land, it
    turns out, is always one more twenty-hour workday
    and another elusive dream away

5
Investment Banking Salaries
  • Assistant or junior analyst (undergrad)  60,000
    (regional banks will be less)
  • MBA                                              
      60k - 135k (includes bonus)
  • Bonus range is typically 10 50 of salary that
    can move to 3x that later
  • Equity component starting to show up now
  • VP level comp 250k - 800k
  • VP w/3-6 years experience regional 100k -
    400k

6
Compensation Advice
  • You may be better off taking less at the entry
    level to get the quality of experience you are
    seeking and to work with strong people.
  • Try to maximize the present value of your future
    earnings and enjoyment (you just may realize 50x
    what they pay you one day)

7
Life as an Analyst
  • Long, long hours
  • A fair amount of grunt work
  • Helps his or her boss get their job done well
  • Dont normally contribute in meetings
  • Gofer duties
  • Weekend work often

8
Key Analyst Skills
  • The ability to work with Excel spreadsheets
  • Write macros in VBA
  • Track and generate weekly newsletters known as
    weeklies
  • Keep schedules
  • Generate prospectuses
  • Get burgers
  • Put in and retrieve pitch books from the copy
    center
  • Answer client phone calls

9
Success Factors
  • Getting your job done well and without friction
  • Getting things done on time
  • Asking for help when you need it
  • Dressing neatly
  • Not complaining, gossiping or whining
  • Learning to use the library and the web to do
    research
  • Become a whiz-kid with Bloomberg, Excel, Word and
    PowerPoint
  • Always give your boss credit
  • Know when to cheer up your boss
  • Know when to stay out of his way
  • Network, observe and think
  • Be genuine

10
Final thoughts on Investment Banking
  • A good time to send in your resume to an
    investment bank is in November and December
  • Dont forget to check back
  • Investment banking is one of the most global
    businesses on earth
  • Electronic investment banking is emerging in a
    serious way
  • Massive consolidation
  • Rapid salary escalation as firms fight to keep
    good people
  • Notoriously competitive
  • Declining margins
  • Most times you will find yourself working for an
    egomaniac
  • Transaction driven world

11
Corporate Finance
  • This career means you work for a company to help
    it find money to run the business, grow the
    business, make acquisitions, plan for its
    financial future and manage any cash on hand.

12
Corporate Finance
  • The job of a financial officer is to create value
    for a company
  • Jobs in corporate finance involve working with a
    long view of what is going to make your company
    successful
  • This may just be the most desirable in the entire
    field of finance

13
Benefits of working within a corporate finance
environment
  • You generally work in teams which help you work
    with people
  • Its a lot of fun to tackle business problems
    that really matter
  • You have many opportunities to travel and meet
    people
  • The pay is generally quite good
  • Responsibility can come fast
  • Your problem solving skills will get put to work
    quickly

14
Salaries
  • Rookie financial analyst        38-47K
  • MBA                                   50-70K
    with no work experience

15
Trends
  • The job outlook for entry level jobs is bright
  • Strategic and global thinkers wanted
  • Team players thrive
  • Make a difference
  • Door wide open to women
  • Integrated risk management growing in importance
  • Quantitative skills trade at a premium
  • Pay is rising
  • Carry the torch for shareholder value

16
Skills and Talents
  • Puzzle-lovers wanted
  • Are you a Forrest Gump type? (dim-witted,
    persnickety pencil pusher) Ambiguity rapid
    changes and daily changing tasks is what you must
    face
  • Can you handle the entry level low-level work
    assigned? Be patient.
  • Learn from mentors
  • They reward longevity and loyalty
  • Execs love to talk about strategy, quality and
    vision so learn to talk their language even if
    you are a geek
  • Be a likable person and communicate well
  • Show initiative
  • Foreign language is a plus
  • Be good with people

17
Money Management
  • Do you like to look behind the numbers? Do you
    like to analyze market trends? Do you get a rush
    when a stock takes off? Money managers hold
    stocks and bonds for institutional clients and
    are often on the buy side of Wall Street.

18
Money Management
  • It is hard to get started in money management
  • Good places to start are bank trust departments,
    state and local pension funds and insurance
    companies
  • Many come over from the sell side of investment
    banks
  • The best way to break in is on the marketing side

19
Money Management
  • If you have social skills and intelligence
    required to market money management services,
    this is your field.
  • Study portfolio theory, learn fixed income
    investments, take the CFA exam and learn the
    industry.

20
Skills Talents Needed
  • Analytical Skills
  • Ability to synthesize
  • Ability to work on the other side of the fence
    from investment bankers that is why they call it
    the buy side
  • Type A and Type B personality blend works here
  • Because you are investing, you must be a risk
    taker
  • Need a broad understanding of business
  • Ability to hang in there
  • Develop negotiating skills
  • Leadership skills are highly valued
  • Many firms are centralizing corporate finance
    functions
  • This is not bean counting

21
Salaries
  • Typically analyst positions start around 50k
  • Equity portfolio managers have a wide range of
    60k - 150k
  • If you are getting strong performance on your
    portfolio, salaries can move quickly to 500k -
    1M

22
Perspectives
  • Educate yourself
  • Succeeding as a money manager is challenging
  • Breaking in is tough
  • Hedge funds are a growing area
  • Mutual funds is enormous
  • Over 9 trillion is entrusted to money managers
  • Pay for performance is expanding
  • Money managers usually dont beat the market

23
Financial Planning
  • These planners help individuals plan their
    financial futures. Retirement, college planning
    for the children, and such.
  • You will need a certain amount of entrepreneurial
    spirit for this career.
  • You can work for IDS Financial Services or for
    yourself
  • It is all about getting that first high-net worth
    client
  • Recommend that you have CFP certification

24
Skills Needed
  • People Skills
  • Communication Skills
  • Tenacity

25
Salary
  • Median salary will be 55,100
  • With a track record, the typical successful
    financial planner earns 150K

26
Trends and Facts
  • Financial Planning is Hot
  • Pay attention to details
  • Quite a few financial planners already
  • CFP helpful
  • Get involved
  • High Net Worth people are key targets

27
Commercial Banking
  • Providing banking services to individuals, small
    businesses and large organizations. Far more
    people employed in this sector of finance than
    any other.

28
Skills Trends
  • Broad business understanding and people skills
    needed
  • Accounting and writing skills are crucial
  • High Grades are less important
  • International talent is in high demand
  • Marketing types wanted
  • MBA optional
  • No such thing as banker hours

29
Salaries
  • Trainee/junior loan officer 38k
  • Loan officer 60k
  • Sr. Corp. Loan Officers 65k
  • Department Mgr 100k

30
Facts and Trends
  • Banking is satisfying
  • Banks are consolidating at an alarming rate
  • Think online
  • Banks are getting aggressive
  • Specialized banks are doing best

31
Real Estate
  • Careers in insurance, construction, mortgage
    banking, property management, real estate
    appraisals, brokerage and leasing, and real
    estate development.

32
Skills and Talents
  • People skills needed
  • Sales skills needed
  • Communication skills needed
  • Personal initiative a must
  • Excellent job opportunities
  • Very entrepreneurial
  • Multiple entry points

33
Salaries
  • Pay is dependent on what you do.
  • Property and RE managers 39k 50k
  • Managing large properties 80 100k
  • RE agents 70K
  • (full time and successful)

34
Insurance
  • This is a trillion dollar sector employing 2.5M
    people.
  • This career helps individuals and business manage
    risk to protect themselves from catastrophic
    losses.

35
Skills and Talents
  • People skills
  • Communication skills
  • The business is about risk transfer
  • Insurance is one of finances best kept secrets
  • People oriented types who can listen will do well
  • Most people in insurance dont sell

36
Salaries
  • Actuary 38k 65k
  • Agent 25k 65k
  • Claims Adj 34k 44k
  • Underwriter 35k 71k

37
Facts Trends
  • Banks becoming more important
  • Hiring is red hot
  • Demand for insurance products rising
  • Malpractice insurance is growth area
  • Not all will survive
  • IT types in high demand
  • Health insurance is hot

38
Consulting
  • The business of providing advice to firms in
    trouble, on the move, or trying to do what they
    do better, faster and more cheaply. One of the
    fastest growing industries in the corporate world.

39
Consulting
  • Entry jobs are Research Assistant, Research
    Associate, Analyst, Business Analyst, Research
    Analyst, and Associate Consultant
  • First year is number crunching
  • Second year is more problem solving and client
    contacting

40
Skills Needed
  • Financial modeling
  • Excel
  • Interviewing clients for case information
  • Research
  • Competitive benchmarking
  • PowerPoint presentations
  • Ability to travel non-stop
  • Ability to be on the road for weeks at a time

41
Top firms looking for these Traits and Abilities
  • Record of academic achievement
  • Problem solving
  • Logical reasoning
  • Business acumen
  • Team orientation
  • Writing skills
  • Presentation skills
  • Ability to cultivate relationships
  • Quantitative and statistical
  • Energy/stamina
  • Pattern of leadership

42
Skills and Talents
  • Great consultants are idea-driven and motivated
    to everything possible to make the client
    organization better.

43
Venture CFO
  • This person is responsible for cash flow
    management of an entrepreneurial venture plus
    oversee all accounting and financial
    transactions. Assist with the business planning
    process and keep the company in compliance with
    all laws and regulations.

44
Skills Needed
  • Prudent risk taker
  • Tenacious
  • Detail-oriented
  • Team player
  • Even temperament
  • Patient
  • Calm by nature

45
Trends
  • Most venture CFOs come from the Big 4 firms or
    from finance careers
  • CFOs in venture life do it all
  • More and more CFOs are transitioning to the COO
    or CEO slot

46
Salaries
  • Depending on number of employees most entry CFO
    slots are 75k
  • With experience and longevity, most venture CFOs
    earn 120k - 170k
  • Equity is the driver, not salary
  • Bonus is usually 25 - 35 of salary

47
Stock Broker Sell Side
  • Being a stock broker is a sales career. You must
    build a clientele from scratch.
  • Commission only world
  • You are making 70 calls a day
  • You are under pressure to churn the stock at all
    times
  • Salary ranges from 150k to 200k per year, if
    you survive
  • It takes 10 years to build a clientele
  • Truly successful brokers make over 1M per year
  • There is a lot of stress in this career choice

48
Stock Broker Buy Side
  • Involved in investing the brokerage firms money
    in various investment vehicles.

49
Venture Capitalist
  • This is all about credentials
  • You must attend a prestigious MBA program
  • You should have success in some venture or within
    an investment banking firm
  • You are taking other peoples money and investing
    it in start-ups mid-stage or later-stage venture
    firms
  • You need to make 3x 20x the money invested due
    to the high loss record

50
Summary
  • Whoever said opportunity knocks once was out of
    their mind. There are so many doors knocking
    after you that your challenge is to pick the
    right door that matches the lifestyle you seek.
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