FINRA Exam Tips and Career Advice 4 – Deep dive into finance roles: buy side vs. sell side

Tyler York
Achievable FINRA Exam Tips podcast

Want to work in finance but don’t know where to start?

We walk you through the two main ‘sides’ of finance, the buy side and the sell side, as well as which roles fall into each category and what kind of work they entail. Brandon Rith shares his knowledge of Investment Banking (IB), Private Equity (PE), asset management firms, and hedge funds.

If you’re looking for a comprehensive course to pass the FINRA SIE exam with a 98% first-time pass rate, check out Achievable’s FINRA SIE course.

FINRA Exam Tips and Career Advice 4 – Deep dive into finance roles: buy side vs. sell side

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Welcome to the achievable podcast where we help you start your Finance career by passing the finra SIE exam.

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Alright, hello, everyone kicking off another podcast here at the with Brandon Rith of Brandon, I guess. Yeah, my name is Tyler York under of achievable and we work together on our finra essay exam product. Brandon's expertise is put into our city our learning app. That is the most effective way to learn the SIE exam content from your computer or phone not more affected probably than hiring Granite at the Tudor, but for your phone and it is also free to try and we would encourage you to go to achievable. Me and give it a try if you want to take a look at it, see how it works and see if it's right for you.

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Today at 4 Hour podcast. Brandon jump in with the basic was in the what he's up to in a second case. You haven't heard before we're going to take a deep dive into an angel firms within finance that are all pretty distinct and pretty important articles are Investment Banking private Equity hedge funds and asset management Asset Management. Probably being the one that it is the most common wealth management, maybe but investment-banking obviously private equity and hedge funds all get a ton of eyeballs in Preston and things like that. So it should be pretty good overview of like the main pillars.

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Star Steel side Finance, right and

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And for the people facing side of finance and should be interesting. Yeah, absolutely. And I think we'll have an opportunity today to talk a little bit more about those careers, maybe some ways in and what to expect if you do go down that path by the way, my name is Brandon Routh. They and I am run basic wisdom, which is a tutoring service. I help people from all walks of life pass Ventura and nasaa exams. And if you need any help with that, you can certainly reach out to me, but of course I partnered with Tyler and achievable to help bring this s i e product that we have available to the market. Yeah. Yeah, Brandon Brandon Stevens, he's a world-class Sprinter a tutor on can help with a bunch of basic wisdom. Net really. I really just want to dive into your knowledge here Brandon of the industry, right? And I think that the

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Level where people usually delineate serve between the two sides. So to speak of Finance is the by side in the South Side. So she should be great for you to add a very high-level say like what is the buy-side vs. Sell-side and then sir dive into each of them for a few minutes and maybe call out a few firms that you feel like you're presenting pretty well and then from that we can kind of start to talk about those four major killer categories that we had brought up. Where did they fall on buy-side sell-side and then such a dive into those individual? Sure. So Finance is tough industry to the kind of get used to it first and it's in the lot of its dressed up in language lingo that the we use me industry if you understand what a vocabulary word means or what a term means is I think it becomes a lot easier.

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I guess the first recommendation I would give anyone is just it if if you have any questions over being what a certain term means something seems complicated because the term seems complicated just look it up and then try to figure out what were you where you go from there, but going to terms like buy-side and sell-side you might be might be thinking. What the heck are we talkin about there by side first?

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This this is definitely oversimplifying it but the buy side is exactly what it sounds like a company that's in the business of connecting their clients or themselves with the Investments that they're looking for is the buy-side now if we're talking about in organization that does this for their clients. This could be something like, oh I am the broker for a teacher's Union in Alabama. I help them buy and sell Securities to make sure that the teachers when they retire have some kind of income if they can receive in retirement. It could be that it could be you are an employee for Vanguard and you buy and sell Securities specifically for Vanguard mutual funds that could be an example of it. And there's a lot of different examples of organizations that buy investment specifically for their clients and that could be anything from a mutual fund to a hedge fund to an asset management type of a fund.

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You know a lot of times when we talk about companies in particular will hear about the black rocks. The Fidelity's the vanguards Charles Schwab Bridgewater to me. Those are all some pretty well-known companies that do that Focus primarily on by side, even though they might have parts of their operation that deal with the Southside.

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I also said that the buy-side also includes buying for themselves meaning if we have an organization and they are out there looking for Securities specifically for their own investment purpose like a Goldman Sachs and I'm going out there to buy thousands of shares of Tesla because we think Tesla is a good investment opportunity for us not for our clients. That would be an example of what we call proprietary trading prop trading as some people refer to it is a big part of the market. I think that's a that's one thing that a lot of people don't even realize a company like Goldman Sachs. One of their biggest forms of Revenue is making money on the Investments that they make for themselves not for the clients, but for themselves with their own money, but at the end of the day both are examples of by side, we have an organization of some form. Typically a corporation that is working to Connected clients or potentially itself with the investment that seeking

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Now that's the buy-side vs. Sell-side is the other part of the transaction that actually gets the trade or the a transaction done. So as an example if I'm working for a teacher's Union and I'm looking to buy a bunch of stock for the teachers union. I'm on the by-side. I am going to connect myself with an organization on the Southside to gather those investment for the teachers union. If you were looking for a real basic way of looking at it, the sell-side is in the business of creating promoting selling and just generally getting the investment that the salt that the buy side is looking for. That's what the sell-side essentially does and there a lot of different parts to the cell side A lot of times people will chop up the Southside into either the primary market for the secondary Market the primary Market being the initial public offering Market where something is being sold for the very first time so as an example if I'm Morgan Stanley working directly with Tesla.

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Well wants to sell some stock to the public. They hire Morgan Stanley to help them sell that stock to the public Morgan Stanley guides them through the process of of essentially getting their stock ready to be sold registering it with the SEC so forth and then Morgan Stanley went when the time is right. We'll Market those Securities and sell those Securities being Tesla stock to the public on behalf of Tesla. Tesla is in a is a company that's in the business of energy and your nice cars that that don't make any noise going down the road when it comes to finance a need to hire a company like Morgan Stanley to help them sell their Investments to the public.

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So that's the primary Market side. And then we also have the the secondary Market side where we have an investment that's been out there in the market for some time. It's already been sold. So as an example, like let's just think about it. Some old company maybe like Coca-Cola. I might be a market maker in the market in my job is to make sure that if people want to buy or sell Coca-Cola stock, then I'm out there willing to trade with I it's almost like he has a market maker hold a huge inventory of Coca-Cola stock. And if you want to come by it, I've got it you can come get it from me. I can sell it to you if you want me to.

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And like I said there many different forms of businesses on the Southside a lot of times with your terms like investment Banks or Underwriters, which we will talk a little bit more about it in a little bit. They're also commercial Banks broker-dealers. I already mention Mark and Maker's lot of different roles and responsibilities in this world and you can get lost and talking about all the different jobs and careers that you can chase down. But in case you were wondering most of the companies that you'll hear about on the South Side will be companies like UPS or JP Morgan Morgan Stanley Citigroup. I'm leaving out a bunch there, but I think you get the idea if you're a business and you're focusing on getting your clients the Securities, they're seeking out and you're specifically focusing on selling them those Securities but not not acquiring them that is more the sell side of Finance. Maybe it's just worth like before we go into like what job corresponds with bra cider self lied to just mention kind of

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Maybe just like it if you're just looking at this from like I'm a new person looking at Finance, right? Like I'm a college student that's trying to understand where I want to go by side or South side seems to be a pretty big fork in your decision. And as far as where you take your career and so it'd be interesting if you have any thoughts on essentially like what who excels where or maybe what the world looks like on each side at a very high level for us to go through those specifics because I'll talk very generally here key word generally the sell-side from my experiences for the more analytical type of person. So if you pull up Microsoft Excel and look at that as more of a hobby than a job than this might be the right path for you. I find that the sell-side is more and a liquid.

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Analytically driven more more math based and I'll give an example of why I have a colleague that works as a traitor of a bonds. He works specifically for a market-maker and in his job is to basically fill trades that customer's request as quickly and as efficiently and as cheaply as he possibly can so as an example might say that he gets a an order from a large institution to buy $1000000 of bonds. It is his job to get those million dollars a bond for that customer as cheaply as quickly and efficiently as possible a lot of times in the South Side. Your reputation is based not necessarily on your relationship with your clients and you might have a smoothie type of relationship with your clients. But ultimately the bottom line is is the money if you build a career based upon getting trades done quickly for customers in at the best possible price.

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Business will come back to you. So a lot of times are given a request to get something done and you have to be very quick. A lot of times you are judged on how efficient how quick your order can get through in in comparative Lee. You know, what you were you trading the security are the investment at versus what was the best of market trading at at Latta number said that kind of float around there. That's a generalization for the cell site on the by-side. I find that there is a little bit more focused on the relationship that you keep with your clients in terms of keeping them happy making sure they understand what's happening in their accounts. Make sure they understand what's happening in the markets etcetera. And of course, there are some analytics they're always going to be analytics and finance where you can be looking at numbers and have to understand what those numbers are telling you and you are but the buy-side you will possibly be need to make recommendations to customers based upon what they already have and what their goals are and their accounts But ultimately I find a lot of the times and the

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By side you're focused ultimately on that relationship that you have with a with a client at the end of the day. I don't think you're going to go wrong with either side. If you're trying to get into Finance meaning that you're knocking me stuck on the buy side of you starting the buy side or vice versa. A lot of times. I find out there's there is a significant amount of switching between the two industries and I kind of think of it like, you know, if you think about what our politicians do I make if I serve as a senator for 16 years A lot of times, he's X politicians will go work for lobbyists on the other side, on the other side of politics and it's because they understand the inner workings of our political system and they helped lobbyists get done whatever they're trying to get done or whatever. They're trying to Lobby. So I kind of think of it that way with buy-side vs. Sell-side. I don't think you're stuck on one side when you start on one side, but ultimately you can find a career on either side and can't be successful on either side depending on what your skillset is.

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Yeah, okay interesting. Well, I think that is going to probably give people a good overview. And now I think we can just like maybe at a high-level go through our vehicles that we have lined up here and then we can dive into the first one. We had in mind where Investment Banking private Equity hedge funds and asset management. And so I think you want to start Investment Banking. Yeah, let's do it. Best mint banking for lack of a better way of saying it is a company that helps another organization sell an investment to the public to raise money.

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Okay, that doesn't sound too complicated. Right? Let's go to an example recently earlier this year in 2019. Hoober went through its first initial public offering Uber wanted to sell a bunch of stock to the public so they could raise money to grow their business now Luber is in the business of getting people from point A to point B, we call that fried sharing that's their business. That's what they know. Well, they are not a finance company and don't specialize and selling stock to the public are dealing with the SEC or dealing with all the rules and regulations in the Market at cetera. So I'll company like uber when they want to sell an investment to the public to raise money. They hiring under right which is sometimes referred to as an investment banker Uber's example Morgan Stanley was one of the main Underwriters that they hired they hired Morgan Stanley in Morgan Stanley's jaw.

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Bob was the guide them through what we called in new issue or the IPO initial public offering process again, in order to sell something to the public there a lot of rules and regulations you have to worry about if you haven't been this far in your s i e materials or just don't know the background. Here's your 22nd. Just quick lesson on this. If you are a C corporation that is not exempt from rules and regulations in the market. You have to go through a process of registering your investment with the SEC prior to selling it. And essentially what you're doing is your disclosing a bunch of information on who you are as a company and all the backgrounds all the financials who's the CEO of officers and directors. What is the company's goal when it comes to raising this money and using that money it is the corporation is job to disclose all that to the SEC and then put into a nice tidy package. We call perspectus for their investors and there's a

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Lot that goes into that process is very time-intensive is very money intensive and companies like uber that are not in the business of Finance need to hire Underwriters to guide them through that process in ultimately be the marketer of those Investments. If you were to ask an investment Bank what their most important job was their most important job is to raise money for their clients. So when super hires Morgan Stanley Uber expects more than Morgan Stanley to be able to sell as much Uber stock as they possibly can and to raise enough money for Uber to be able to grow its business and grow its operations Force the sale of uber stock will benefit both companies where Uber will receive a bunch of money from that offering now that that is their stock they're selling but inevitably Morgan Stanley have to have some kind of incentive to do it so they get paid very well usually usually these Underwriters and investment banks are making the tens of millions of not hundreds of millions of dollars on these bigger.

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Initial public offerings at their helping other companies out with so if you were to work for an investment Bank, you would be part of that process in some form or fashion in sidered sort of at least for my college graduates. It's where a lot of Ivy League people go Aegis or cream of the crop, but I think it has to do with your opinion. I guess it was like what's interesting but it definitely making it has the reputation. You know, Wharton MBA kid NYU Stern people excetera generates the kind of demand from the highest quality students per se or is it like or what is it that sort of like connects the Two Worlds could question.

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Tina just to be blunt. I think one of the main driving factors there is that there's a lot of money and that or else there's only a limited amount of jobs in that world. So if you're thinking from the employer standpoint, who are you more apt to hire me on someone who has graduated with a with a 4.0 from from Princeton School of Business or someone like from high school Florida State by the way, no offense my Florida State Alumni, but you know, I mean it it really doesn't matter in the long term. I think everyone knows that but it is still have to use colleges of the yardstick. Absolutely. Yeah, I guess not go back on that point a little bit. But to me, there's two ways to get into the business of investment-banking one. You can have an impressive college background in and also I think another big reason why a lot of Ivy League schools end up filtering a lot of their students into these

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Is because they have legitimate good programs that teach a lot about real world and go in-depth in terms of what happens Within These Within These sectors, you know, I'll be honest. I didn't really know much about Finance even after getting a finance degree through through Florida State and yeah, that's no knock on their program. It's just I just don't think it was as detailed or is oriented enough on investment banking. So a lot of these bigger Ivy League schools just have more resources and have more and they have more I guess access to these Worlds 2 to give their students a better idea of what they need to be prepared for going into these types of careers, you use the magic word accent and I think that what does that really mean to me? I think it's connections. I think it's having like an established relationship with a lot of these ferns the school not the student directly, but I think that that

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Kind of access also matters a lot race. In fact, that was what I was just about to go to which was the I think there's two ways to get into this world, which is number one have an impressive college background, but I had to leave school great that'll open some doors. Absolutely. Secondly networking and sometimes I would even say networking might even get you get you further unless you have a full Row from an Ivy League school. That's that will be different but networking networking networking. If you ever heard the phrase it's not what you know, it's who you know, that's that there's no more. There's no place for that's true then finance a lot of times if you know the right person or if you networked enough in meet the right people, you can get your foot in the door at the very least into an entry level position may be that the tough part would be getting some one of these people who are it within the industry already to vouch for you and you might have to do something more than just the invite and some kind of analysts to a launcher go out to a couple of network.

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Advance you will probably need to prove to them in some form or fashion that you know what you're doing at the end that you're a hard worker. But ultimately in networking we should get your foot in the door in terms of at least getting an interview and and getting getting the people within the firm Billy's consider hiring you for that you can start to peel the layers away the more that you can start to understand the process that people go through it seems to have and I don't know if other verticals are similar in this way, but certainly investment-banking seems to have like a lot of its own rituals a lot of its own sort of processes and and quirks that are unique to an s in banking and being hired Investment Banking in one of the best websites for that which near full disclosure. They are a marketing partner of ours to

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Market on their website, but it's Wall Street Oasis, which has just a bevy of resources as well as a very active form with 30,000 poster something like that about investment-banking. How did Neil the interviews how to do the resume correctly just a ton of stuff these things also exist for the other verticals as well. But I think in investment-banking whether it's the money or the prestige that kind of gets associated with it or just the difficult. It seems to get a lot of support from websites like Off to the Races of the day and then there was a good post on on someone was asking how to get into investment banking with a 300 from a non Ivy League school or at least I think they had something below 300 and there a couple people there that while he said hey.

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Bubble 030 from a non Ivy League schools not going to it's not about that. Wow anyone but the same time every single response said network network network meet try to do whatever you can to meet someone within the company take me out to lunch. Do you have to pick the brain a little bit and if you can prove to someone within the company that again if you're a hard worker and that you can learn quickly, that's usually a good way to get your foot in the door. Yeah, and I also think that I think that's a college student to sometime in the most nebulas. So maybe we even have a whole separate podcast and how did that work out for sure. We should absolutely say I love you. I love you can finish your thought on that. I was just going to ask if you wanted to jump into the different jobs within investment banking.

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Yes. Yeah, that's perfect. I guess it go from here. We can talk about a few jobs with Investment Banking and because we're a entry-level or gorgeous to lower level in terms of the types of jobs that you would get with the licenses that we teach. I'm not going to talk about say like your CFO position or your even your CEO's are your officers record high positions. We're going to focus on what you could reasonably attain within say the first let's save the first three to five years of you graduating from college soap some jobs within investment-banking the lowest level job believe it or not is is what they referred to as an analyst and this is the this is one of the few jobs and Investment Banking that you could get hired right out of an undergrad just with a finance degree or something similar, especially if you have a good background with our good record when it came to your your your degree, this is one that you can get hired.

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Out of school in the Analyst job without going into too many details comes with two requirements. It just like it says in the title, you're analyzing different types of Investments. And when I say analyzing Investments, let's say that some company wants to hire your investment banking company to help them sell stock to the public. There's going to be a lot of analysis that goes into that like we all how should we sell this? What type of person should we Market this to? You know, what should be the price of this investment things like that? So a lot of analyzing Investments and then also making presentations on the on your analysis to certain people within the firm usually people that are higher up to then you and just presenting the information that you found. This is a very database job where you're taking a bunch of information and then trying to make a presentation out of it a level above that and then this is the only other job I'm going to mention with Investment Banking is the is the associate which is one level above an analyst.

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It associate is someone that does a lot of analytical a lot of the analytical part of the job is still exist. So there's still a lot of data analysis. There's a lot of presentations you might give but these associates typically oversee the analysts and have some kind of supervisory role with when it comes to them and that might be more guidance Pace than then say no hire and fire the type of the the analysts but their job is essentially to oversee and manage analyst work and sometimes add their input whenever an analyst might might get into my run into a dead end or something like that now to be an aunt and an associate, you typically need to have an MBA of some form or a higher level degree from there. You can also potentially apart of colleagues of mine. Tanning a CFA. Have you ever heard of a CFA which is a completely separate designation, but that's that one's going to take some time and some educational efforts even Beyond just the normal licensing.

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You would need to to even do the job. Right? It's a lot more work typically be at the very well. If your Reaper speeding through it, you can get done with it in two and a half years, but most people take three to four years at a minimum to make it through it covers a ton of information you basically at the end of it. You become the type of person that can look at a complicated financial statement utilize a spreadsheet and tell someone whether or not this is a good investment. I think that's for the most part it for not diving too deep into it. I think that's that's enough my banking from a 10,000 ft few.

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Great. Yeah, I think this is a good opportunity to move on to private Equity. So the second one you want to cover today. Let's do it. So private Equity sounds complicated or sophisticated on the service and it is but private Equity to make it as simple as possible is a organization that connects investors with Investments that are not publicly available a little bit earlier and talked about how Luber went through its initial public offering with Morgan Stanley hired Morgan Stanley went through a Wong registration process with the SEC and that was all in order for them to raise money by selling their stock to the general public. And anyone anyone can buy that stock.

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Before we were went public Uber did a lot of what we call Private placements where they were selling shares of a company to a private audience of people in the reason why companies do that is because they're able to avoid a lot of the rules and regulations that you have to face when you go public or when you sell your investment publicly. So one of the rules that comes with a bobby call Private placement again selling a investment to a small group of people is at the rules and regulations won't apply as long as the majority of your investors in that situation or what we call accredited investors and without going into the details. Basically the wealthier you are the more likely it is that you're considered accredited. So if you meet that definition of welfare / accredited investor than you're likely eligible for these types of Investments that are just not available to the general public a lot of people got access to Uber stock before Uber.

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Even went public and if you did you were probably getting access to that through we will be call a p e or a private Equity Firm. So your your jobs that you will find within within a PE firm in general. And again, we're talking about your job. So you can probably obtain a relatively short after college business development is a job that you can find their business development type of a job would be researching potential Investments. Meaning that if you're looking for your out there looking for the types of companies that a PE firm would be potentially investing in you might even start conversations with the company itself. Meaning you might start conversations with the CEO or with some upper management to say Hey, you know, where interest in your company. Are you looking for any kind of infusion of capital which is fine it speak of hey, do you want any cash from us for in return for an investment in your company?

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And in all so there might be some Financial Financial modeling would just another way of just saying that you're trying to seek the the potential profitability of this investment. And you're you're basically the front line for the company. You're you're almost the filter for the people that will eventually decided. This is a good investment for the private Equity firms out there searching for a lot of opportunities seeking those opportunities out. Now what you find an opportunity that you feel is somewhat decent or least would least worth it to pursue or look into a little bit more you'll usually hand over a bunch of financial statement that you obtained from the company to an investment analyst and that investment analyst has been going to look at the numbers and is going to try to back up what you think if you think an investment in this specific company is a good idea the investment Analyst job within the private Equity Firm is going to back that up by looking at data and basically analyzing it and making sure that the nun.

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Make sense. I would think of your investment analyst is kind of like if you've ever watched Shark Tank and then then seeing them kind of crunched the numbers and think it'll hey you you're your company. You're just a new company is worth $1000000. But you have no Half Moon dollars in debt. That's the type of stuff your investment analyst is generally speaking go look at so those are your two kind of I'm seeking out Investments for the private Equity Firm and try to see if there a good opportunity for the firm itself. Those your two jobs that are kind of with in that bucket, but they're also some customer-facing jobs within the firm. You can strictly be a salesperson will you're trying to obtain business for the private Equity Firm meaning you're trying to bring in cash so they can didn't take that cash and invested into these opportunities. You can also be an investor relations type of a in a Brooklyn investor relations type of a job through which would usually be talkin to your current customers making sure they're satisfied with what's going on. They might call you up with some questions about what shows up on their state.

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What are the types of Investments said that the private Equity Firm is seeking out and and that's your job is essentially keep him happy. So in general, these are four categories within a private Equity Firm that that you could attain course. There's other jobs within the company that they're out there. But in general those are your lower level does a entry-level ish type of jobs and now we can probably move onto hedge funds. We got two more left for the viewers here listening to through God hedge funds and asset management remaining and so are thinking you have CAT5 10 minutes reach. So a hedge fund is probably something that some if not most of our end of our listeners have heard about even if you don't know what it is, you know, the word hedge and finances is a word that usually relates to protection that there's a phrase hedge your bets. Now the problem is if you're thinking about hedge funds being safe or

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Texting you, that's not what they do hedge funds started out as funds were people were putting their money into them and they were getting AAA managers of their money. That would have been taking money put in the market into a fairly safe Investments, but they evolved over time and they're no longer that way anymore when people think about hedge funds today, you want to think about a hedge fund as a high-risk high-reward type of a place where you can put your money, right? They're incredibly large sums of money to do things that I like a normal investor couldn't do. Yes they do and they do a lot of you may hear the term exotic with headphones. They do a lot of exotic investment investing which is fancy Finance speak for that. They do things that that you don't really hear or see about so you might see a hedgehog

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Sensei buying or investing into things that you would never think or an investment. The bottom line with a hedge fund is at this is a place that typically very wealthy people put their money into the role of the hedge fund is to make the fastest in the quickest return for their investors a lot of times if they're not really focused on the long-term gain, even though your headphones are trying to make money year after year after year. They're mostly interested in getting short-term gains for their investors. This is again a high-risk high-reward type of a type of a fund where there's a there's a lot of interesting things that they invest in whether it's going short Securities that they think are going to drop in value. For instance. If you've ever heard of Bill Ackman, he was pretty famous for his 1 billion dollar short on Herbalife. Herbalife was a was a Ponzi scheme and whether you think of the Ponzi scheme or not, he took out out of 1 billion dollar short position on Herbalife and actually ended up biting a pretty hard. They survived his his his onslaught of

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Shorting the company which just means he's betting against the company of any that they're going to fail. So that's what hedge funds do they take they take walk the money from wealthy investors and then try to make them the quickest in the fastest money possible now and in terms of your jobs within hedge funds there's a couple different jobs that I think that people could relatively attain it at a any entry level position and get in there freely within reason. In terms of their graduation from college. You can get it at an analyst type of a role in analyst just like it sounds like an just like we've been talking about the analysts are out there seeking potential investment opportunities for the hedge fund trying to find the the right things that will they think will make them the most money the fastest also come along the maybe the analytical side or the more number-crunching side is that you could be a traitor within a hedge fund meaning that you're do once the decision has been made to make an investment the traitors within the hedge fund go out there and try to

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The purchase or try to make that investment the fastest in the quickest in the most efficient way that they could possibly do it. But in addition to just the analytical side, there's also an investor relation roles within hedge funds which could include sales in fundraising basically are going out there and trying to find the Millionaires and billionaires and institutions that give you money to then take the money invest that money or it could be just keeping your investors. Happy being on the other side of the phone when I'm when one of your masters that has a big position or big investment in your hedge fund and making sure that they understand what's going on if they have questions, so this isn't some jobs within had fun that you can attain and and I haven't mentioned this message has been on my mind for a few the past that we've gone through in terms of careers and one way that you can get your foot in the door if you don't have a lot of experience or maybe you don't have a stellar background in terms of your education internships Within These companies, you might not be paid for your efforts. And yeah, there's probably could be some competition for an internship for the more well-known companies, but that's the way that you can get in there.

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That you're willing to work hard and showing that you're willing to to learn quickly and a lot of those internship jobs. If you prove yourself will end up in a minute and into a potential full-time position with the company. He's not going and I think that hedge funds are an interesting bit cuz you mentioned also like the Herbalife guy hedge fund owners have the pension for using the Press particular sort of the the like salacious Finance portion of the finance, press to try and influence things on their own behalf. Right? Like this guy took out a big short against Herbalife and then he immediately started bashing Herbalife.

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As an example of that, right and it is interesting it is that illegal like you certainly don't see Goldman Sachs or Fidelity doing that, right? So is that illegal for other groups and it's legal for hedge funds or is it more just like a project like a sort of an honor. That's a great question what one of the things you learn about when you start studying the material that that's that we put out there is that market manipulation is a big No-No you don't you shouldn't be doing anything that would be potentially artificially moving the price upward and downward what else a is it there's no favorable rules for certain types of companies vsec and The Regulators out there don't really have much of a preference over we're going to allow a hedge fund to do this, but we're not going to lie late yesterday in Investment Banking Company to do this, but I will say this hedge funds come with a lot of a lack of Regulation.

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Say that one of the ways a hedge funds get around being regulated say like a mutual fund is is by limiting their investment to only very wealthy investors. So as an example most hedge funds will not even pick up the phone unless you have a million dollars to invest with them. Some of them have exactly minimum 20 million minute minimum 15. I've even heard of 50 million minimums, you know, if you don't get some of the smaller headphones don't pick up the phone if you have a million to invest but this goes back to the rule if you ever read about regulation D. And that is in the achievable material regulation D is a is a rule that allows certain types of Investments to be sold without much oversight or too much supervision from Regulators like the SEC but only if they're sold two small groups of millionaires billionaires and institutions it is saying things are just being silly.

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Dishes with your interviews in the medium hedge fund managers straddle. A lot of gray area vsec is very much of an institution. That is always trying to catch up with the end of stream meanings. They're all the rules and regulations are there not really for thinking it's me. It's mainly because they don't have a ton of resources are a ton of money to think forward and just fine if changes every day gets more complicated every single day a lot of the rules and lot of rules are written kind of in a past tense and covering things in terms of how they used to be and you'll find very quickly if you research a lot about things that happened in finance is that Finance professionals bend that they bend the rules until they break. So I guess there's like a decent thing to mention when you're doing all the finra essay you studying and just other finra studying in general you might ask yourself.

2521.5s
Like what's the point of all this stuff? Right? Cuz there's a lot of what seemed to be almost like no kind of like obvious like no duh kind of rules, right things like it. Yeah, you can accept super large gift some people excetera. And so it's it's because just because of the fact that money is involved in everything that you do you really got to have really tight rules around how it all supposed to work.

2554.2s
Or people will break them and make money for themselves and their clients doing so and you know start how the 2008 financial crisis came about and the reason why the rules exist because someone messed up in the past simply stated. So there's a lot of there's a lot of history there and finance. So The Regulators are paying attention to what hedge fund managers are saying but the same time unless they have a real case against them unless they blame Libre cruel what you'll find is a lot of times he's hedge fund managers. I mean, we're talking about hedge fund managers that make hundreds of millions if not billions of dollars at you sometimes even on a yearly basis you better believe they're going to have access to the best attorneys in the best legal resources as possible. So the SEC is a lot of times it's going to be kind of shy away from going after these these these but fund managers, even if they say silly things they shouldn't be saying unless they have a solid case and they do they can prove that they broke. They actually broke a roll.

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Review hedge funds and I think now let's move on to asset management is our final topic for the day and some of the final vertical that we're going to cover great asset management is a fairly general term. If you just think about the two terms together, they're there and asset is beyond anything. You can put your money into that can make you a return and then management is just managing managing people's money. Essentially if you were to look up the definition of an asset management firm, it's it sounds something like they're in the way of a firm that invests their their customers money into various different things based upon stated objectives similar to your hedge fund but a big difference between a hedge fund and an asset management fun is that an asset management fun? It is more long-term focus and also it's it's more focused on third individual clients once needs an objective.

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Fall a lot of small fish go but also in a lot of a lot of the bigger desert could also put the money in Asset Management firms, but basically these are companies that take take a fee for taking your money and investing it in a different place and ultimately give you diversification liquidity, which is a way of saying that you can get your money out of these things pretty quickly and Professional Management Services that maybe you was an investor couldn't do on your own as an example. I mean we mention some of the asset management firms made the firm that I came from Fidelity Investments is considered an asset management firm where you can take your money to them can work with an advisor there and they will talk to you about what your background is what your financial status is what your goals what your objectives are and then help you construct a portfolio put your money into the right things that will suit those goals and objectives that you I would assume that most the people get painting your SSI in the series 7 are probably going to go into Asset Management out of all the four that we talked about today. This is probably the most General and the one where

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Is a lot of opportunities for say your everyday entry-level type of a person there are some jobs in four different types of jobs with an asset management that people usually obtain first sales sales would include going through what I would have just talked about their talking to a client of understanding what their objectives are understand what their situation is in the making recommendations to them that based on the products at your firm offers and that might even including constructing an entire portfolio for them and making sure that their money is invested in the way that they can reach their goals. And by the way, if you're getting into sales, that's the type of job that requires or series 63 or 65 series 66. So there's there's multiple licenses that come into play there, especially given the fact that with these Asset Management firms, you're more so acting and working with the general public vs. Like a hedge fund. You might be able to avoid some some of those licenses just because you're dealing with more affluent May hire and Commonwealth

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Doctors generally speaking them the more sophisticated the type of investor you deal with the less licensing the less regulation that there is there is a couple other jobs in there with an asset management, which you could be a research analyst with him and asset management fields and just like we talked about before it's just pretty similar to the other to the other functions. We've discussed you taken data on investments you research find the data out there on these Investments. You might be putting your customers money into and try to figure out hey is this is this a good choice? ER? What are the merits to this investment? You can also be a traitor. That was actually my first job at Fidelity was what I was on their trading desk. I was trained to take phone calls from customers and a customer would call up with the request of hey, I want to buy shares in this or I want to invest in this Bond or buy this mutual fund a my job would be to make sure that I get them into that investment in the fastest in the most efficient way with the least amount of fees if you could be a traitor and a lot of times that job

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Songs with other requirement to get the SIUE in the series 7 cool. It's just mentioning. I think the asset management is Austin and incorrectly from wrong, but I think it's really kind of like the broadest and most common path into getting into Finance sales. Absolutely. Yeah me there if you all the big companies you probably think about when you think Finance like those Schwab's the vanguards a TD ameritrade's those are all considered Forest is probably the most of that there's so many different opportunities and in empaths you can go down with MS. And yeah, it's it's very general asset manager is not really saying much it's not really saying anything specific other than cure taking clients money in your investing at on their behalf.

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I'm now a client could be a retail client. It could be an Institutional client. It could also be your client could be up a fund. It could be a lot of different things. But ultimately you're working with a client of some form and then getting their money into the best possible Investments based upon their situation.

2925.6s
And then the last one compliance we haven't talked a lot about compliance it actually at all so far but compliance is a big part of Finance, which if you've been reading through the regulations part of your materials, you've know that there's a lot of rules and and there's not in the rules. There's a lot of laws out there in terms of what we in finance can we can't do and these walls aren't just created in and there's not just assume that these companies are just doing the right thing and also The Regulators with an Finance don't have all the ability in the world to meet to babysit in the supervised every single thing you do. So almost every single firm out there has their own compliance staff and their job is just to make sure that you're following the rules and you're not breaking any of the rules are doing anything that might get you into trouble or refine a suspension or revocation of a license.

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I'm so compliance. People are very much. You want to think of them as almost the referees in a football field? They're the ones who are going to make sure that everything is working the way it should and if there's if a flag needs to be thrown or throw RFI someone needs to stop doing something that's breaking the law or just breaking a rule then they're there to make sure that that doesn't happen a really big Bank. Like let's say fatality. We're just finish up far enough. Thank you, you know, it's in not just your interest right but in the interest of all of your shareholders who technically accountable to that you follow the rules absolutely it and also these rules are very complicated, you know, you might be thinking that the SIU materials really tough and really Dance by but you have no idea the rules and regulations are very complicated and very hard to understand at times. So you literally need to hire someone or

3045.9s
A lot of times for the larger firms were talking departments hundreds of people just to make sure that your employees are following the rules. It's a huge part of finance and just what the amount of rules and regulations that are in place. You got to make sure that they're people in place they're making bitter ensuring that you're compliant with everything. So that's a that's a big opportunity, especially with them within an asset management fine. And I didn't mention compliance in the other for the other business businesses that we discussed but there are compliance rules in every single one of them. So another opportunity out there that you might be able to seek blasting I'll stay here about compliance know is it's probably not your entry level type of a job that it's very rare that a company's going to hire someone who has to do is no Finance experience or just as graduating with a finance degree into that type of position. Cuz a lot of times you need to understand what school did the real world before you get into a job. That's that's a supervising the real world. So that's probably a job date that you could reasonably attain that lower-level entry-level comply.

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Stop after maybe one or two years of solid experience, especially for the type of people who are good at memorizing rules good at following rules rules and and and and ultimately aren't being Cowboys out there and finances that makes sense rain and it's probably good anyways to understand the context right? Like most of the people who are referees to use your earlier example played the sport that the referee I'm just cuz you need to let me know what's going on. I think that is a really good overview of the different roles and finance and deep diving into Investment Banking private Equity hedge funds and asset management Brandon. I'd love to just give you kind of 30 seconds to wrap up here and then we can do our little absolutely so hopefully this gives everyone an idea of the road in general the different types of careers that are out there again, you know, we didn't go

3165.8s
The Depths into into any specific category of and there's lots of different opportunities out there for everyone so bottom line do your research do your networking make sure that you're meeting the right people in finance in an ultimately you'll you'll find a way into the career that you will you eventually want to get into if you if you just keep being curious and you keep free keep focusing on bettering your position, right? You can even combine you to sort of desires to both learn about the different roles in finance and network buy it if it's doing little meet and greet copy interviews with people in various roles has something that you're able to pull or have access to absolutely and one thing that definitely would at least interests employer in terms of hire. You would be if you had the siac already completed and done. So I guess that brings us back to achievable little bit and I'll let you take it from here Tyler.

3225.8s
Yeah, we're wrapping up this episode the achievable podcast. Thank you very much for listening achievable is a test prep company that is meant to combine your modern and beautiful software that works on your phone or desktop app that uses data analytics and learning science to give you the best study program possible. I wish the best experts that we can find that a really forging new ground as far as how they teach the material that they're looking to teach doing an approach that you know less sort of from the Ivory Tower and more really just kind of getting real with you about what you need to learn and how it all works which is why were super grateful to have Brandon as her partner and his company basic wisdom.

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Yeah, and I should mention if you yeah, if you're interested in achievable a tour in it Brandon and achievable is combined finra SIE. You course I please visit https://achievable.me/ and you can sign up for a free account there to try it out. And then additionally if you are actually pretty serious about Finance at the SIE or other series exams be on the essay that she would will does not have a course for I cannot recommend anyone more highly as a tutor for your finger in the exam Brandon on his website is https://basicwisdom.net

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And thank you very much. Thank you.
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