Graduate Training Schemes

The structure of banks’ training programmes may vary due to the differing educational systems across Europe, but one element remains consistent: whether you’re joining Goldman Sachs, Deutsche Bank or Société
Générale, you’ll have to learn fast.

Training in London
Most banks in the City hire graduates onto fixed training programmes that start each summer. This is as much the case at European banks in the City as at American institutions. For example, Swiss-based UBS hires students from across Europe onto its London-based ‘explore’ programme which is entirely separate from the programme it runs in Zurich. US banks such as Goldman Sachs, Morgan Stanley, J.P. Morgan and Bank of America Merrill Lynch train most of the European graduate hires in their London offices. So, what should you expect if you start your banking career in the City of London?

Classroom training
This usually lasts a few weeks and will teach you how to price a bond, build a financial model or understand a stock option. At US banks like Goldman Sachs and Morgan Stanley (and sometimes at European banks like
Deutsche), the classroom training stage typically kicks off with an all expenses paid trip to
New York. The head of early career development at one European bank says this initial period of training is about “building the business and technical skills you need to know from day one”. Put less opaquely, classroom training is all about teaching you a) what the bank as a whole does, b) what the division you’re joining does, and c) how to do it yourself. The first few weeks of training are also about meeting people. “Banks will ensure that you are given valuable exposure to senior leaders within the business,” says Sarah Crawford, head of graduate recruitment at Goldman Sachs. If you’re learning, say, how to value equity
derivatives, don’t be surprised to find a senior equity derivatives trader standing in front of you and presenting some of the models.

Exams
Since 2007, when the UK’s Financial Services Authority ruled that passing exams was no longer necessary for bankers dealing only with wholesale clients, exam passes haven’t been strictly necessary. This doesn’t mean, however, that banks don’t go in for them. Every year, thousands of people are put forward for exams
run by the UK’s Securities and Investment Institute (SII), now known as the Chartered Institute for Securities and Investments (CISI). Which exams will you take? If you’re working in a markets area of a bank based in the UK, you can expect to come across exams run by the CISI. If you’re working in corporate finance, you
may be put forward for the CISI Certificate in Corporate Finance. And if you’re working in asset management, prepare yourself for the Certificate in Investment Management, or the Chartered Financial Analyst (CFA) accreditation.

Rotations and on-the-job training
Once you’ve finished the induction, you’ll be assigned to a team and put to work. In some cases, you may be moved to another team a few months later – part of a system known as ‘rotations’. A bank that offers rotations is probably a good idea if you’re not entirely sure which area you want to work in. However, rotations also have a downside. Because you’re moving between different desks and not entering a specific job, you may find yourself slightly exposed if the bank you join is cutting staff. Equally, a rotation programme may also make it difficult to form strong relationships with future managers and leave you struggling to secure a role in the area you’re really interested in. Some banks offer more rotations than others. Morgan Stanley, for example, says graduates in its global capital markets and investment banking divisions get the chance to rotate across country, product and industry group. It also offers a cross-divisional analyst programme in which students who want to experience a broad range of roles in the bank before settling into a job rotate across both investment banking (M&A), and sales and trading. By contrast, Goldman Sachs’ graduates often
join one team and so do not do any rotations. On the whole, rotations are rare in corporate finance but more common in sales and trading positions.

Training in Continental Europe
If this is what you can expect in London, what happens if you join a bank in Frankfurt, Madrid or Paris? Most banks in Continental Europe hire graduates throughout the year. Such ‘rolling’ application deadlines in Europe mean students typically start in batches. There is less emphasis on an initial ‘global orientation’ period, and more on classroom training in small groups, followed by on-the-job work experience. If you join a bank in Continental Europe, however, there may be more opportunities to work overseas. At SocGen, trainees on its twoyear Paris-based Graduate International Programme (GIP) usually undertake three rotations of eight months each: one in Paris, one in London or Paris and a third in either Milan, Frankfurt or Madrid, plus a fortnight’s training at French business school INSEAD.

Professional Development
Whether you join a bank in London or in Continental Europe, you can also expect to be put through continuous training as your career progresses. BNP Paribas, for example, runs a special academy for its investment banking professionals. Goldman Sachs operates ‘Pine Street’, an academy designed to prepare promising staff its more senior management roles. If you’re working in asset management or research in Europe, you may be expected to study and pass Chartered Financial Analyst (CFA) accreditation, of US origin, which comes in three parts and is recognised globally. The CFA is becoming increasingly popular – in June 2009 more than 128,000 people globally took the exams. In Europe, the numbers were up 17% on the previous year. The European Federation of Financial Analysts runs a competing qualification, the Certified International Investment Analyst (CIIA), which is supported by the likes of the Société Française des Analystes Financiers and Deutsche Vereinigung für Finanzanalyse und Anlagenberatung (DVFA). In the US, it has also been common practice for junior bankers to leave the industry after two years to study for a Master’s in Business Administration (MBA) and to come back into the industry once the course is over. This happens less frequently in Europe but some bankers still choose to study for an MBA. If you
do choose this route, you will need to study at a top business school. In Europe banks typically prefer to recruit from the likes of the London Business School and INSEAD in Paris.