Republished with permission from WSJ.com. See the original here.
Wall Street has undergone a radical face lift this year, but finance industry recruiters are expected to stick to roughly the same formula when looking to fill entry-level positions with college graduates in the future.
Wealth management, investment banking and research are expected to see a hiring surge in the coming years, according to Joseph Logan, founder and managing director of Pinnacle Group International, a New York executive recruiting firm specializing in the financial services industry.
"A strong background in accounting plus financial [knowledge in] evaluation is the key -- and being well-rounded will help a lot," says David Smith, an associate professor at the McIntire School of Commerce at the University of Virginia who specializes in corporate finance and banking. Strong social skills and the ability to think creatively are important to round out more technical and quantitative talents.
Smith, who helps prepare students for finance job interviews, advises the students who want to head to Wall Street to eschew finance fads like the current demand in restructuring or credit derivatives which were hot two years ago and focus on becoming fluent in accounting and financial evaluation fundamentals that are applicable to any specialty. As the economy recovers more traditional financial services functions, such as mergers and acquisitions advisory will make a comeback, according to Smith.
Hard skills such as "budgeting, forecasting, financial models and, for example, transaction-oriented proficiencies" that point to a "strong business acumen" will be weighed in the recruitment process said Terri L. Gregos, director of college relations at Bank of New York Mellon, a global financial services firm.
Other factors that make up the traditional formula include a high grade point average, sound quantitative skills -- a desirable trait among engineering and mathematics majors -- internship experience at a finance firm, and the ability to communicate effectively.
What may be the biggest change on the hiring landscape is the cast of recruiters. Smaller boutique and advisory firms are likely to continue their growth spurt over the next few years to fill the space left behind by the contracting firms like Bank of America and Citigroup. The middle market investment bank Jefferies & Co., for example, is expanding at a rapid clip and Smith predicts it could become a big player in a few years. The bank has added almost 250 workers since the end of 2008, according to the firm's third-quarter earnings report.
Since most of the small firms lack the infrastructure to train new hires as intensely as their larger rivals, finance or business majors could be more attractive than an English or history concentration, says Barbara Hewitt, senior associate director of the career services center of the Wharton School at the University of Pennsylvania
Students at liberal arts schools that don't offer intensive finance and accounting classes can develop a solid entry-level finance resume by enrolling in basic accounting and macro and micro economic courses. They can also bulk up on the more technical areas of finance by enrolling in summer classes at other institutions.
Meanwhile, fields like risk management may be gaining traction on Wall Street today in the wake of the financial crisis. Hewitt says employers have also been posting more positions in risk management this year than before. And more than 23,000 of finance professionals have registered to take the financial risk management certification exam this year, a 70% increase compared to 2008, according to the Global Association of Risk Professionals, the organization that administers the exam.
And while 2009 was a down year for wealth managers, many firms are now in growth mode in an attempt to regain assets that were lost during the recession. JPMorgan Chase & Co. plans to hire about 600 brokers for its retail brokerage unit Bear Stearns Private Client Services and will open three offices next year, according to statements by executives at the firm. Credit Suisse Group also announced plans to add approximately 200 wealth managers each year, boosting its number of relationship managers to 4,000 by the end of 2012 from the present 3,400.
-- Write to Yoree Koh