Monthly Archives: December 2012

More thoughts on GI Bill for Graduate School

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One semester down and I’ve been already received $47,387.35 in benefits. The GI Bill rocks. So for all of you academy grads out there who are deciding whether or not to stay in for an extra few months to get 35%, DO it.

When you see the 36 months advertised by the GI Bill it is actually more like 4 years because you are not in school during the whole calendar year. This means that for those of you who are interested in doing a 3-4 year joint-degree, you can max out the GI Bill. Although I don’t advise going down that route (basically the JD-MBA).

Generally speaking, most of you are looking at the traditional 2-year full-time MBA program and I’m a huge advocate of the traditional 2-year full-time MBA program. You will exhaust roughly half of your GI Bill on this and I think you should put the remaining 18 months to good use.

Since you have so much time to use the GI Bill, I personally would consider going for a one-year mid-career policy degree (MPA/MPP) after a few years of working experience, if my career permits a one-year break. That would still leave a good 10 months of GI Bill left, assuming 8 months in an academic year.

What to do with the remaining 8 months? Don’t forget about the certification, licensing, and national exams! The Chartered Financial Analyst program is the most expensive to attempt (and possibly the hardest to pass) so I think it is great that the GI Bill gives you some cushion to try.

I read all over the place about the supposed “$1,460 = 1 month” equation in terms of how much benefit the tests will reduce, i.e. if your test costs exactly $1,460, it will remove 1 month of benefits from your 36 total. However, I haven’t actually found anything official from the VA that states that yet, so I’m going to submit a reimbursement in the next few weeks for the CFA and the GMAT and see how much benefits it reduces.

Bulge Bracket Banks Analysis for MBA Veterans

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If you decide to recruit for banking next year, you will have to decide on which type of banks to apply too. By the way, I really advise that you do RECRUIT for banking, do a SUMMER INTERNSHIP with banking, but DON’T ACCEPT AN OFFER from a bank (topic of another post coming soon). I focused on bulge bracket banks (but you may want to add boutique, middle-market- you can find better definitions elsewhere on the internet) and there are many ways to categorize them, but I prefer to do it this way to start it off, ranking within groups is just what I perceive is the MBA/market/my personal sentiment:
American Banks with Retail/Commercial Deposits (Large Balance Sheets):
1. J.P. Morgan
2. Bank of America Merrill Lynch
3. Citigroup

Large balance sheets make investment banking somewhat easier because you can provide multiple services for your clients, i.e. line of credit, in addition to mergers and acquisition advisory services. Problem is that banks don’t make much off of lines of credit and other commercial banking activity so it is a double-edged sword.

Broker-Dealers, Traditional Investment Banks (Small Balance Sheets)
1. Goldman Sachs
2. Morgan Stanley
3. Credit Suisse

Before the financial crisis forced some of them (maybe all?) to be bank holding companies, these guys were mainly focused on proprietary trading. CS has probably the best private bank, GS has probably the best sales and trading, and MS and GS always vie for the top in investment banking and I think historically and even today, GS is still dominating. MS dominates technology without a doubt. CS had a really crappy year for banking, down there with UBS.

Foreign Banks with Deposits in Home Country
1. Deutsche Bank
2. Barclays
3. UBS

I never thought about it this way until a veteran banker told me but he said to never work for a foreign bank unless you don’t have a choice. Do you think the Germans are going to be the first to get cut at DB or the Swiss being the first to be cut at CS, or the Americans? Yeah. And frankly if you are going to give your soul up to banking….might as well help America.

 

Veteran Networks

Another thing that you should really think about being a veteran and all is how strong the veteran networks are. There are actually a decent amount of Managing Directors at most banks who are veterans in banking and sales and trading so there is a certain level of support and mentorship that you can expect. However, being a veteran is far from being a “ticket” into banking – there are a shitload of ex-O3s running all over the place. Especially Navy Sub guys (JP Morgan Co-Heads of Recruiting for Columbia are both Navy Sub guys)…..but I digress.

Overall Rank Bank Veterans Network Rank Comments
1 GS  4 Didn’t get an interview from GS, but let’s face it, it’s still “King of the Street” and everybody knows it, everybody wants to be there. Culture is pretty stiff but you want GS on your resume. Total love/hate/envy relationship here.
2 JPM  3 Very active group, everyone seems more polished than the other banks. Look at JPM as a corporation that happens to be in the banking industry rather than being a bank. Just a great corporation to work for.
3 MS  2 This bank has a very old-school “American” feel to it. They’ve got tons of veterans and they will treat you right.
4 CS  1 Bet you didn’t think a Swiss bank would be #1 but they had the first veterans group and they are a bunch of party animals and fun to be with.
5 BAC  6 There are veterans, but the organization of the veterans group could be better. Being a large organization makes it hard to be cohesive. But then again….JPM does it well and they are larger.
6 DB  8 If you find a US military veteran at DB…..let me know…
7 BCS  5 If you are surprised that a British bank would rank higher than some American banks, I was too at first. Then I realized that they purchased Lehman’s investment bank and it started to make sense to me.
8 C  7 Same thing with BAC, there are veterans, but the organization could be stronger if it had a strong sponsor.
9 UBS  9 Who cares? UBS is imploding.

Wrapping up the first semester, Banking in US/EMEA/APAC

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The first semester is crazy. People warned me it was crazy, but I didn’t believe them. How bad could it really be? Pretty bad if you are recruiting for everything. Part of me wants to just chill out for the rest of this year, but I’ve actually met people in real life who finds this blog useful so to pay it forward for other vets, I’m going to keep on going.

 

From a logistics point of view, all of my posts now are probably only useful for those MBAs entering the class of 2015 because most of the things I’ve learned this fall isn’t relevant to the spring at all (because traditional recruiting happens in the fall).

 

One quick note I wanted to jot down was the difference between banking in the US, EMEA (Europe, Middle East, and Africa, but basically London), vs. APAC (Asia Pacific, but basically Hong Kong). In the US, you are a new associate without any experience in banking among 80 other dudes who came from other industries. There is a super tight military network at MOST banks and your MBA alumni network should be strong.

 

In London, there’s a lot of analysts being promoted to associates and they have 1 year MBA. What does all of that mean for you? Instead of 80 new guys, you are one of 10 new guys vs. the 70 guys who have been there for 3-4 years. How do you think you’ll rank among them during annual reviews for the first two years? Bottom third. There is a London Banking Summit every Thanksgiving so I would take a look for yourself and enjoy London as well.

 

The main barrier in working in Asia, regardless of banking, consulting, or any industry, is the language requirements. There will be reading, writing, speaking, and even translation tests at most firms. I don’t know a lot of veterans who even meet this pre-requisite so this is already out.

 

The whole point of looking beyond the US is that you can potentially increase your chances of getting more interviews. If you know you are cut from Barclays in New York, that does not mean you are cut from Barclays London. So you apply to London. Hit up all the bulge bracket firms during your networking and the ones you get cut from, apply to their London/HK office.

 

That’s it for now….more to come:

  • Recruiting tips, networking etiquette
  • Why you should recruit for everything
  • Why banking in London sucks
  • Detailed notes on every company that I’ve researched