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Financial Internships

The Inside Track to Better Careers

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Financial Internships Overview: Many of the leading firms in the financial services industry offer excellent internship programs. The best financial internships have these main attractions for students:

  • A no-risk introduction to a company and/or field
  • A chance to get the inside track on full-time positions
  • Development of skills transferable to other fields
  • Resume-building through experience with a respected employer and program

The "inside track" point is especially salient these days, when the financial services industry is in recession, with hiring freezes and layoffs. Specifically, successful interns (as well as other summer hires who impress their managers) often are extended full-time job offers upon graduation, even in the face of a hiring freeze. In a Wall Street Journal survey of 479 recruiters at large companies (see the "WSJ College Survey" in the 9/13/2010 issue), 25% indicated that over 50% of the new graduates hired by their firms were former interns of theirs. In 14% of these 479 companies, former interns represented 75% or more of the new graduates hired. Other sources cited in the same WSJ report suggest that internships are becoming an increasingly important gateway to the most desirable entry-level jobs.

Thus, it is especially important in periods of industry force reductions to choose among potential internships with care. Where possible, focus on the employers that most interest you for full-time work after graduation. Do the homework and legwork. Of course, your experiences during the internship itself may change your mind about employers, industries and fields, but you should make as informed a choice as possible.

Also note that, in addition to financial services companies, internships also are offered by industry associations, the securities exchanges and the governmental agencies that regulate the financial services industry. These organizations offer interesting long-term career possibilities themselves, and internships that present valuable perspectives on the industry.

Transferable Skills and Internships: Finance is a highly rigorous business discipline, and generally recognized as such. Studying finance and working in the field develops facility with quantitative methods and problem-solving techniques, core skills that are vital in other fields. For example, within the financial services industry itself, the staff of controller organizations often are assigned duties that range far beyond their formal job descriptions. They prove to be especially adaptable as a result of the analytical skills that their positions require.

Benefits to Employers of Internships: Employers that run internship programs see two principal benefits:

  • Internships are the best way to screen students for full-time positions.
  • Internships promote the company on campus.

Far-sighted companies with the best internship programs keep them intact even in periods of retrenchment, hiring freezes and layoffs. In essence, they subscribe to the marketing theory that advertising and promotions should be maintained, or even increased, in recessionary periods.

Thus, when the financial services industry enjoys its next boom, having kept the firm's name high in student consciousness during the lean times will promise a continued supply of quality recruits when hiring picks up again. By contrast, eliminating internships, especially when done late in the academic year, damages the firm’s reputation for years to come. Finally, in the great scheme of financial services industry budgets, the salary expenditure on internship programs normally is quite modest.

Good Internship Programs: Good internship programs have a variety of features. These include:

  • A coordinator for the program
  • A plan and goals for each participant, in writing
  • Tasks that are educational and fulfilling, not menial or rote
  • Regularly scheduled meetings, lectures, lunches and/or dinners with:
    1. Other interns, so that you can compare experiences
    2. Employees, managers and executives in various areas of the firm
  • Rotation among managers, departments or functions (not vital if the other criteria are met)

Ideally, ask to see details on previous years' internship programs, what the participants actually did and their schedules of activities, such as those outlined above. Beware that some employers may give the loftier moniker of "internship" to mundane or unfocused summer jobs that leave you with little to take away except the pay. In particular, you want to be sure that every manager you have during the internship is advised well in advance of your coming, and is required to scope out a meaningful set of tasks for you, also in advance, and that your progress will be monitored by the internship program coordinator. Otherwise, if the program is run haphazardly, the odds are high that your experience will be unsatisfactory.

Note that, in large firms with multiple lines of business, each may run its own internship program, rather than there being one centrally-administered one. In this case, the quality of internships may vary widely across the firm, and generalizations cannot be drawn from one to the rest.

Competition for Internships: The competition for a spot in many financial internship programs often is quite intense. The principal reasons are:

  • Highly-quality pools of applicants
  • High ratios of applicants to available positions
  • Significant numbers of applicants who are children, other relatives or friends of these people connected to the hiring firm:
    1. Executives
    2. Other employees
    3. Important individual clients
    4. Executives of major corporate clients

International Internships: Those interested in internships abroad should look into an organization called AIESEC.

Virtual Internships: This is a new and growing category of internships, in which the work is done remotely and online. Follow the link for details.

Financial Development Programs: While these programs include paid full-time employees rather than unpaid or marginally paid students, they have several common threads with the best internships, including increasing the marketability of their alumni. Follow the link for details.

Returnships: This is a variation on the theme of internship, but this time for the benefit of people who are returning to the workforce and/or their old careers after a long hiatus. Again, follow the link for details.

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