Banking and finance
Investment Banking has become very much the umbrella term to cover a multitude of distinct yet interdependent activities. Rather than detailing all the different roles that exist, it is much easier to give an overview of the institutions, financial products and functions that combine to make the City what it is.
The main Institutions that make up the City include Investment Banks, Fund or Asset Management Firms, Securities Trading Firms, Money and Commodity Brokerages and Re-Insurance Companies.
Insight from Morgan Stanley
Morgan Stanley’s worldwide reputation rests on the talents and passion of its people, who share a common set of values and bring excellence and integrity to everything they do. The firm seeks to grow long-term client relationships by virtue of consistently rigorous thinking and the unsurpassed access to financial markets that Morgan Stanley can offer. There is a focus on creating custom-tailored solutions that cut across functions to help clients realise new opportunities and solve complex problems. Morgan Stanley's aim is to be the first choice of everyone who deals in financial markets, whether as prospective clients, employees or investors.
To achieve this, Morgan Stanley offers Graduate Programmes in Investment Banking, Sales & Trading, Equity Research, Investment Management, Credit Risk Management, Private Wealth Management, Technology and Finance & Operations. Opportunities in other divisions can arise, so if you are serious about joining Morgan Stanley, you are strongly advised to start by visiting their website on a regular basis and to keep visiting it on a regular basis as updates occur.
Morgan Stanley also offers both 10 week summer as well as 6-12 month long internship opportunities designed to attract, develop and assess the kind of people it feels are likely to succeed at their firm. These well-structured programmes include training, seminars, social events and some even rotations, designed to give you a thorough insight into Morgan Stanley and provide a unique and intellectually rewarding experience working in the financial services industry.
Fund (also Investment or Asset) Management: manages large funds – pension funds, unit trusts and insurance funds – for other companies and private clients. The aim is to use the money (“capital”) of their clients (banks, businesses, high-net individuals), by investing it in the markets, to increase their fund of money and make a profit for investors. In order to provide accurate investment advice to both clients and colleagues, Investment Analysts need to analyse every available source of information on a particular company or market and make recommendations on whether to buy, hold or sell shares, to their colleagues in sales and trading.
In Corporate Finance individuals are expected to advise clients on how to manage their finances and raise capital (share/bond & securities issues) through the most cost-effective and efficient methods. The work includes a lot of quantitative research and analysis and preparation of accurate and detailed documents for clients. Excellent communication and interpersonal skills are essential for client presentations. This is very high-pressure work requiring lots of stamina to cope with long and often antisocial working hours.
Traders buy and sell products as directed by the sales department, trying to anticipate the direction the market will go and make a profit by buying low and selling high. They need to be able to make split-second decisions and handle pressure for long periods of time. As Investment Banks generally operate as meritocracies, promotion is performance-based and a trader’s profit-making performance is under constant scrutiny. Stamina, lots of energy and nerves of steel are just as important as a good memory and strong numeracy.
Stockbroking is similar to trading but with slightly less pressure and risk involved. Brokers invest money and other financial products on a commission basis on behalf of private and commercial clients. They have to monitor UK and foreign stock market performance, execute any deals recommended to them by the Fund Management department, and give investment advice to clients.
Private Banking is concerned with managing the assets of high-net individuals and families. Specialists offer their clients, not only investment advice and trading capabilities, but also a range of additional financial services, including property acquisition.
The Operations/BackOffice: Although often bracketed with IT, operations is in fact, qualitatively a distinctly different function. Less dynamic and glamorous than other areas such as the trading floor (or “front office”), operations staff play a vital role performing the production function of Investment Banking, overseeing the transfer of funds and the execution of trades as well as holding responsibility for compliance issues. It ensures that all transactions have been settled and that the dealers and analysts are receiving accurate information from the IT systems.
Information Technology: A matter of a few seconds can be the difference between a bank making or losing millions of pounds. Consequently, banks invest massively to ensure that their IT systems are able to process a certain amount of information, or perform a particular calculation as quickly and smoothly as possible. Positions can roughly be divided into the areas of support and development.
Insurance: Insurance offers a great range of job roles, which could see you dealing with, pitching to and taking care of clients, calculating complex risk premia for policies, or processing claims among many other functions. As well as the below there are a number of other niche roles you might be able to go into, such as loss adjusting, reinsurance, and more.
Actuarial: The job role of an actuary varies depending on the particular industry in which he or she operates. The different work areas include life and general insurance, pensions and investment management. Actuaries might work within a firm in one of these areas, as an expert advisor, or they might work for an actuarial consultancy, which provides services on a third-party basis.
In all areas, actuaries bring statistical analysis and modelling skills to assessing financial situations - in relation to past or projected future performance, risk, or other factors. In life and general insurance, actuaries are involved in a range of activities, such as developing and pricing products, assessing and rating risks, and ensuring claims reserves are adequate.
In pensions, actuaries help to design pension schemes; on an ongoing basis, they assess the solvency of the pension fund, ensuring it is adequately funded to meet its present and future (projected) financial commitments to the policyholders - its ‘pension promise’.
In financial management and investment strategy, actuaries assess investment performance and make investment decisions, to generate the best returns within funds’ risk profiles.
Actuaries also operate in areas such as corporate finance and recovery.