Is an accounting qualification genuinely still a route into front office investment banking?

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Back in the day, if you failed to get into a front office investment banking job (in this case corporate finance or equity research) as a fresh graduate, you still had options. The best one was to join a Big Four Accounting firm and to gain an ACA qualification. Thereafter, as long as you had first time passes and had achieved a good degree from a good university, you had a chance of achieving a job in M&A or equity research.

So now what? Now that banks have been dumping equity researchers and M&A isn’t happening, can you really use a Big Four accounting job as a conduit into a front office financial services position?

That depends upon whom you ask.

Marcus Butler, principal at recruitment firm The Cornell Partnership, says it’s hard: “It’s become an incredibly difficult move for candidates to make,” says Butler, “There are so few jobs out there and so many experienced people willing to take entry-level roles in equity research or M&A that banks are unwilling to train ACAs up.

“ACAs are quite expensive hires, even though they have no experience,” adds Butler.

Conversely, James Heath of search firm Greenwich Partners, says ACAs do still have a chance of moving into the front office of investment banks and that private equity funds and corporate finance boutiques have actually increased their appetite for ACAs recently.

However, even Heath concedes that the days of widespread ACA transplantation into front office investment banking roles are over. Banks are very fussy about the ACAs they hire today, he says, claiming:  “There are quite a few jobs at the moment, but banks are being very specific about what they’re looking for. Increasingly, they will specify very precise amounts of experience in particular sectors like oil and gas.”

What it takes for an ACA to make the break into the front office

If you are thinking of taking, are currently taking, or have recently taken, an ACA, what makes it more likely that you’ll be able to make it into the front office?

Butler specifies several criteria, as follows:

1.  You need to move within two years of qualifying as an ACA. “Beyond that, you will become too specialised and far too expensive for an organisation to hire you,” says Butler.

2.   Don’t even try getting into trading. Most ACAs who move into front office investment banking roles go into corporate finance and M&A, equity research, or at a push – private equity.

3.   Avoid due diligence teams at the Big Four. This is critical, says Butler. Most transaction services teams at Big Four accounting firms have two elements and two teams: valuation modelling and due diligence. If you go into valuation modelling, you will gain the kind of experience that will enable you to move into a front office role at an investment bank. If you go into due diligence, you won’t. Avoid.

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