Despite just a 4.4% unemployment rate, finance jobs remain some of the toughest to obtain. The chance to earn outsized compensation draws the best and brightest from not only the top U.S. schools, but also around the world. Consequently, you may need to begin your financial career at the bottom-with a finance internship.
Interns are basically probationary employees, typically working during the summers as they finish up their schooling, be that college or graduate school. They are usually paid, but sometimes perform their tasks without pay. The hope is that they gain valuable experience that puts them in a better position for a full-time job down the road.
While landing an internship has always been an ambitious move for young professionals trying to get a foot in the door, it’s becoming more of a requirement today. According to Bloomberg Businessweek, 76% of employers require candidates to have had internship experience.1 Consequently, the competition for internships is as fierce as ever.
What do Finance Interns Do?
Situations vary, but many finance interns are typically tasked with so-called grunt work since they often assist the full-time analysts.2 This often involves a significant amount of work on Microsoft Excel working on whatever the financial institution specializes in.
For example, some programs will involve extensive financial modeling to compare projects (corporate finance) or investments (private equity). You should become familiar with capital budgeting techniques such as Net Present Value, Payback Period and Internal Rate of Return. More importantly, you’ll learn how to accomplish these calculations on Microsoft Excel.
For investment banking, you’ll likely work on Excel-based valuation models for potential M&A deals. You’ll also be preparing pitches for potential clients, selling the virtue of what your company can do for them.3
Internships for MBAs
Internships aren’t just for undergrads-graduate students also pursue internship opportunities. The hope is the experience allows them to eventually enter a full-time position at a higher level.
While the highest paying internships for MBA students are traditionally in management consulting, the financial employment site Poets and Quants reports that investment banking summer analysts (a more professional way to say intern) are finally making a comeback from the financial crisis.4 Typically centered around New York City and San Francisco, opportunities for I-banking interns are reportedly expanding to places like Houston and Charlotte.5
Overall, there isn’t a huge difference in responsibilities between undergraduate and graduate interns- the big difference is the pay.
The highest paying MBA interns reportedly are coming from the University of Chicago’s Booth Business School, who pull in $8,200 per month, nearly $3,000 per month more than the best-paid undergrad finance internships.6 Other Top 25 business schools also pay well including NYU, Emory and Georgetown, which pays MBA interns just over $6,000 per month on average.7
This highlights some reasons to go back for a graduate degree like an MBA. For the many professionals that are dissatisfied with their current path and looking to get into finance, an MBA means a smoother transition and much greater earning potential. Utilizing the school’s resources can be invaluable in landing an internship.
Some High Profile Finance Internships
The world’s largest asset management company is also reportedly the highest paying finance company for undergrad interns. According to CNBC article, BlackRock, with its $5.4 trillion in assets under management, pays its summer interns a hefty $5,400 per month.8 Annualized, this is more than the average American makes-not bad for a college kid.
The New York City-based firm tops a list of the highest paying financial institutions that also includes Bank of America, Capital One and Deutsche Bank.9 BlackRock careers are some of the most coveted, so it’s no surprise the competition for such spots is intense.
A New York-based intern in BlackRock’s Risk Management and Quantitative Analysis Group, reported their tenure as a ‘fast-paced’ and ‘great learning experience’ on employment site Glassdoor.10 The intern also beamed about the positive aspects of having ‘BlackRock’ on their resume.
Kleiner Perkins Caufield & Byers
Considering the buzz around venture capital and (the rise of the unicorns, etc.) it’s no surprise that Kleiner Perkins Caufield & Byers or KPCB, is one of the most sought after internships. These paid internships are designed to introduce participants to the VC industry as well as a chance to assist on projects. KPCB offers internships for college students, recent graduates and graduate students.
Their KPCB Fellows program allows interns to help solve product, design and technology problems at their portfolio companies.11 These are companies to whom KPCB has made early stage, equity investments. Currently, their portfolio includes stakes in popular names like SnapChat, Airbnb and SoundCloud.12
While the average KPCB internship lasts 3-6 months, ‘Product Fellows’ have the chance to work a full year assisting on product development at a San Francisco-based company such as Shazam, IndieGogo or Twitter.13
Maybe the biggest benefit of all is the networking opportunities. Interns attend private events put on by KPCB and portfolio companies, where they get the chance to mingle with other students as well as ‘luminaries’ in the industry.14 All near the beautiful city of San Francisco and legendary Silicon Valley.
Former interns report social events including kayaking, paintball and sailing.15 But an internship this attractive is predictably extremely competitive-interns report just a 2% acceptance rate following a tough interview.16
Tips for Landing an Internship
There’s no two ways about it-landing an internship requires a significant effort. If you want to secure a summer internship while enrolled in a school (either as an undergraduate or graduate) here are a few things to remember from Poets and Quants.
Hit up your career services center and get to know the staff says Erik Bykowsky, a recent graduate of Carnegie Melon’s Tepper School of Business.17 He knows a few things about landing an internship- he was accepted as an intern at management consulting firm McKinsey & Company, arguably the most prestigious along with BCG and Deloitte. He reveals that getting to know the staff well can give you a major leg up when opportunities become available.18
Tap Your Schools Faculty
An underutilized resource for students is the school’s faculty. Especially in graduate programs, faculty have done consulting work or even serve on boards of directors for area companies.19 Many would be more than happy to put in a good word for exceptional students looking for internships.
Move up the Ladder
Finally, take advantage of any internship that you’re offered early on, because that will afford you the chance to get better and better internships as the school years go on.20 Of course, you should also have a full, professional LinkedIn profile, full of applicable designations, awards and a strong portfolio of whatever you have available-be it work related or school work.