Sales & Trading (ST) and Investment Banking (IB) are two important divisions in Investment Bank besides Asset Management and Equity Research. They provide different types of service to clients spanning real estate, healthcare, financial institutions, natural resources, technology, industrials, etc.
Both divisions are dream lands of many finance students who want to achieve a high-paying job. Breaking into IB and ST is highly competitive as recruiters usually prefer top-school students or professionals from prestigious firms with strong quantitative skills. Whether to choose IB or ST depends on the career path as well as capacity of each person. This article helps you understand the difference between the two lucrative careers and make the most outstanding resume.
1. Investment Banking or Sales & Trading: Which one suits you?
Sales and Trading serves as intermediary between companies and institutional investors such as Hedge Fund or Mutual Fund & ETF for trading stocks, bonds or derivatives. Sales people and traders make money from commissions and bid-ask-spread which is the difference between the prices quoted for an immediate sale and an immediate purchase.
People in sales and trading division are always passionate about market dynamics. Sales group is for anyone who is interested in constantly building relationships while traders are required to have quick reactions, quantitative skills, market understanding, more popularly, computer science background since the trading system is mostly automated these days.
– Excellent analytical and relationship management skills.
– 1+ relevant experience in banking/financial service industry
– Ability to work under pressure and multi-tasking
– Pass the appropriate licensing examinations including the Series 7 and 63
– 2+ years of trading experience
– Strong understanding in firm-related assets and industry
– Bachelor degree in quantitative-related field (engineering, math, computer science, etc)
– Ability to work under pressure, multi-tasking skills and quick thinking
– Pass the appropriate licensing examinations including the Series 7 and 63
Generally, there are not many changes in the work of sales and trading when you move to a higher position. You could start from the role of Intern, Analyst, Associate, Vice President and Managing Director. In every position, the responsibility is always related to trading as people at ST division make money when a deal is traded. If sales and trading is your career path, keep in mind that there is a strong development in the first four years, then things are going to flatten.
Unlike sales and trading, investment banking people are involved in large and long-term deals in which they advise companies, corporations, institutional investors or government in financings (capital raising – underwriting), mergers and acquisitions (M&A) and restructuring.
This division is suitable for top-school graduates who can work for long hours and are capable of financial modeling, valuation methods, and creating pitchbook. Instead of following the day-to-day activities on the market, investment bankers are engrossed in deal execution which improves the companies’ financial situation by raising capital, merging or restructuring.
In order to get a full-time position in investment banking, potential candidates are people who:
– Attend target schools or intern at prestigious investment firm
– Have excellent analytical, quantitative and interpretative skills
– Are able to thrive in a dynamic, collaborative work environment
– Are adaptable, flexible and resilient
– Have coursework in finance/accounting/economics
The work in IB significantly changes when moving up to a higher position. For more details of what investment bankers actually do, visit What do investment bankers do?
When it comes to working hours, Sales and Trading division seems to be less nerve-racking than investment banking. Around 60-80 hours per week is very normal for any traders and salespeople. They have to come early before the market opens and work a bit more to build relationships with clients after the market closes, so the possibility of overtime is high but weekend work is rare. In the meanwhile, investment bankers have to be in the office 80-100 hours even at weekends to ensure robust client relationships and be prepared for unpredictable pitches. For more details of what investment bankers do, visit our article: What do investment bankers do?
Sales & Trading pays salary as competitively as Investment Banking. However, the salary for ST often fluctuates more than that of IB. Investment bankers often work as a team on a large-scale project such as helping Facebook buy Instagram and Whatsapp, so it is difficult to know exactly who contributes the most and the least. In contrast, compensation for sales and trading is totally performance-based. How many stocks or bonds traded will decide the amount of commission they earn.
Here is the average salary for Sales and Trading vs Investment Banking per year in the U.S large banks:
|Sales and Trading||Investment Banking|
|Title||Base Salary (USD)||Total compensation (USD)|
|Total compensation (USD)|
|Analyst||90K||100K – 150K||80K – 90K||150K – 200K|
|Associate||130K||150K – 240K||150K – 180K||250K – 400K|
|Vice President||150K||170K – 350K||200K – 300K||500K – 700K|
|Director/ Senior Vice President||160K – 230K||350K+||250K – 350K||500K – 1,000K|
|Managing Director||170K – 500K||1,000K+||450K – 600K||1,000K+|
Investment banking division offers more diverse exit opportunities than Sales and Trading division.
The common track – exit career options for investment bankers can be categorized into 2 main groups: Buy-side jobs and corporate jobs.
|Buy side: Private Equity (PE), Hedge Fund (HF), Asset Management (AM)||Corporate Jobs: Corporate Finance, Corporate Development|
The Buy-side firms not only offer better working hours but also the jobs are more interesting than those in IB.
The work in PE requires ability to execute and manage large transactions. This lucrative destination is for anyone who has deal experience and is interested in accounting, valuation, financial modeling and fundraising.
People in HF/AM are involved in financial modeling but less granular than in PE. They mostly do research and analysis about the market (stock, bond or derivatives) to come up with new investment ideas and present them to seniors. There is also quant fund (quantitative HF) which is suitable for a mathematical acumen and computer science background.
If you want to work in corporations, you can work in Corporate Finance and Corporate Development. Knowledge and skills gained from investment banks can be totally applied in these fields.
In addition, the jobs also offer better working hours than that in investment banking.
In contrast, exit opportunities for sales and trading are relatively niche.
In sales group, the more senior you are, the larger clients you are assigned. Some successful salespeople often become stockbrokers or Hedge Fund managers who are involved in sales, research and trading.
Traders’ exit opportunities seem to be less transferable than sales people’s. Before entering this career, make sure that trading is your long term goal. Some excellent traders move to Hedge fund to become billionaire titans in Hedge fund or Wealth Management but it is quite difficult and competitive. Otherwise, traders can do their own trade after earning some amount of money and a network they already built during the time in investment banks. NETWORKING a lot with people who work in your target firm is the key to opening up your career path. Our networking guide will definitely help you network in the most effective way.
2. How to get into Investment Bank (both Investment Banking division and Sales and Trading division)
2.1 Common pathways to get into Investment Banking
Investment Banking Short Definition with brief intro IBD as Tier 1, ST ER as Tier 2
The path to get into Investment Banking can be summarized with 4 steps as follows:
- Resume / Cover letter
- Internship / Relevant Banking Experience
To increase the chance of breaking into IB and ST, you need to have at least 1-2 finance-related internships in boutique banks, private equity firms, wealth management or corporate finance.
Getting a Sales and Trading internship could be an alternative for competitive ones at investment banking division and private equity firms. If you do not have an internship from a bank or a financial services firm, activities such as student-run investment funds in college can be used to support your profile.
When it comes to networking with people in sales and trading, you are recommended not to bother them during market hours. The ideal time for networking is 1-2 hours after the market closes.
Recruiting process for the two divisions will vary in each firm: Online application, a video-based Hirevue mostly covering fit questions, a short phone/in-person interview and Super Day (an assessment center in which recruiters evaluate your performance through different interviews and challenges)
In Sales and Trading Superday, candidates are interviewed by people from different trading desks. 1-2 trading ideas and knowledge about different trading desks should be prepared in advance because interviewers will evaluate applicants’ ability to pitch investment ideas with grounded evidence. Sales and Trading overview will provide more details about how to get into ST division.
Superday of Investment Banking division is mostly about recent deals and deal experience asked by a specific group you are applying to. There are also some technical questions spanning M&A models, accounting, DCF analysis and LBO models. For more details of breaking into investment banking, visit Investment Banking Hierarchy: Overview, Career and Application Guide.
3. Resume – The Similarities and Differences in Investment Banking and Sales & Trading
Generally, recruiters look for two key differentiators on your resume:
- History of your excellence (i.e. GPA / test scores, awards & honors, brand name work experiences, competition wins, leadership)
- Quick fact: Goldman Sachs recommends applicants to submit their SAT scores to increase the chance to pass the application round.
- Interest for finance, specifically investment banking (i.e. school major, past internships, clubs, relevant working experience, related coursework )
- Investment banking internships (i.e. IBD internship) work best.
Mistakes: Candidates often just list their activities rather than putting their accomplishments.
Investment Bank Resume Toolkit helps you make your resume outstanding and finance-oriented even for non-target backgrounds.
3.1 Investment Banking Division (IBD) – What Investment Banks Look for in Resume
If your first preference is Investment Banking Division:
Quantitative and Analytical ability
Teamwork and Leadership skills
Interest in Finance and Business
Investment bankers perform a lot of financial modeling and valuations. This requires a high-level of solving any number related to the company’s operations and estimating its valuations.
Investment banking firms want to seek high-achieving people who have the initiative, motivation, and energy to deliver strong results.
Investment bankers always work in teams. A resume should show the ability to work with multiple stakeholders.
Investment bankers work closely with business deals and transactions. An interest in Finance and Business could be demonstrated by a passion for M&A, industry and deal knowledge.
Most of the time, bankers keep their eyes glued to screens on financial modelling and valuations. These works necessitate superior quantitative and analytical abilities.
Senior bankers will assess the deals, and communicate with clients based on your performance analysis. If your analysis performance proves useful and insightful, you are highly recommended and appreciated in your performance reviews. So the results with initiatives are important.
A team often includes several analysts, several associates, a vice president. To work best in investment banking, individuals have to learn how to collaborate well with others, and how to promote collaboration in their teams.
Your team in investment banking has extensive knowledge in all sectors of business and economy. You just have a chance to hold a conversation with senior levels if you keep abreast of business and finance events happening in the world.
What to put in resume
Your quantitative and analytical abilities can be demonstrated in resume through the following bullet points:
– Quantitative coursework that requires an analytical mindset.
– Your high score in GPA, SAT math scores.
– Previous investment banking division internship (IDB internship), figures-related work experience.
– Write down any analysis in your past successful deals, past jobs in which your contribution plays a key role.
– Mention how you come up with a quality hypothesis in investment, analysis, how you use evidence to support the hypothesis.
– Mention how you identify problems and take a proactive approach to solve the case.
– How you handle and synthesize an abundance of information and how you streamline it.
Employers can gauge your initiative by accomplishments and specific situations mentioned in your resume:
– Write down your finance-related achievements in your past internships, job.
– Mention how you take an innovative and efficient approach to solve a problem.
– Mention how you flexibly move among different tasks and sort out the priorities to work on first.
– Write how you increase revenues for your company in a certain period of time.
This aptitude can be exemplified by these following key points:
– Be a member of a sports team in your school.
– Work in a working environment that promotes teamwork.
– Be a team leader in the past successful projects, studying groups.
– Work smoothly with other teammates who have different work styles.
You can increase your chance to pass the resume screening if the resume can demonstrate your interests:
– Be a member of an investment or finance-related club.
– Relevant finance courses.
– Take part in case competitions.
– Your achievement in your investment portfolio.
– Your awards in finance competitions.
3.2 Sales and Trading Division – What Investment Banks look for in resume
If your first preference is Sales and Trading division:
Passion for Financial Market
Since salespeople and traders work closely with equity and fixed incomes, it requires good quantitative skills and ability to have a better sense of how .
Analytical skills can be considered as a combination of quantitative skills and qualitative skills. Since salespeople and traders also perform quite a lot of analysis, employers use analytical skills in your resume as an assessment criteria.
Salespeople and traders have to keep up with current financial events to speak with clients. Aspirations and commitment to the financial market will be key differentiators in your resume among dozens of outstanding candidates.
Working on trading desks requires ST people to understand how the systems operate. For traders, they are expected to know programming languages such as C+, C++ or Python.
Salespeople and traders quote a case with stock price and fixed income price, they calculate necessary numbers in the blink of an eye to support the case. If anything wrong happens, the deal can end up zero dollar.
Besides staying abreast of current events in the financial world, you should add your analysis in your speaking to further entice investors to use the firm’s service.
Keeping track of breaking news in deals, transactions in the financial world is the best way for you to showcase your extensive knowledge and business when speaking with clients.
What to put in resume
In resume, relevant coursework demonstrating your quant abilities should be emphasized/amplified:
– Quantitative coursework
– High SAT scores in Math
– Math – focused/related competitions
– Previous sales and trading internships.
– Anything related to quantitative jobs: crunching data, working on multiple spreadsheets.
What you did in your internship, work experiences have to demonstrate your analytical skills:
– Put down past relevant analysis experience in your resume such as investment analysis you used to perform, strategy analysis in business competition.
– Mention investment analysis such as stock analysis, fixed income analysis, derivative analysis you performed to make investment decisions for your own portfolio.
– Write how you are involved in an investment strategy and your contributions to turn the strategy into success.
You should choose key points to manifest your passion for financial market:
– Majoring in finance will be a plus point.
– Anything related to selling and trading such as your previous work experience, past successful deals.
– You can present finance society, clubs you join where you give presentations, and discuss with fellows about investments.
In your resume, technological understanding can be shown through your background (computer science), tech-related coursework or a willing-to-learn mindset when it comes to programming languages.
It is preferable to have finance-related internships, work experience
Albeit mentioning “analyze”, you shouldn’t overuse that keyphrase to avoid the boredom in your “pitching” paper.
Internship in investment banking sales and trading works best.
The most important point here is you have to get some finance-related experience as soon as possible if you still want to pursue a banking career regardless of any division you apply for. You have to equip yourself with finance-related experience by joining a student-run fund, applying for a relevant finance internship or banking internship (Bulge Bracket internships for early starters, Middle Market or Boutique internships for late starters or career changers). Relevant finance working experience will be the first key point to assess candidates so make sure that you have one prior to apply for a banking position (Investment Banking division and Sales and Trading division).
Since they belong to the Sales and Trading division in Investment Bank, there is very little difference between a Sales resume and Trading one. Whether you rank your preference for Sales or Trading, you still need to mention superior quantitative skills, analytical skills and interests for the financial market (detailed Information in the table above).
While an MBA is a good stepping stone to kick off your banking career in an Investment Banking division, Sales and Trading rarely hire from the MBA pool. On top of it, full-time experienced professionals also have a low chance of landing in the Sales and Trading division.
Investment Banking sounds more technical and is recognized as Tier-1 in Wall Street, so they prefer top-notch recent graduates, MBA graduates, and even finance experienced professionals. However, Sales and Trading looks for fresh graduates with great passion in finance, sales, and communicating. If you insist on a Sales and Trading division, sales roles can be more realistic destinations for experienced professionals, where their previous sales skills are considered more transferable.
5. In conclusion
Investment Banks receive thousands of resumes in each program. Without the right resume, no matter how smart you are, how hard you work, the chance of landing a place in Investment Banks can be limited. Whichever position you apply for, make sure to tailor your resume accordingly. Now you are ready to make up your mind to work in either investment banking division or sales and trading.