Whether you're a budding analyst for a huge accounting firm or dipping your toes into the investment banking world with a Wall Street firm, a college internship (preferably a paid one) can be a wide-open gateway into your dream financial services industry post - if you handle it right.
According to a recent study from the National Association of Colleges and Employers, about 63% of 2013 college graduates and 60% of students in 2012 who participated in paid internships, received at least one job offer after their stint ended. The study notes 37% of unpaid interns earned job offers.
Salary-wise, paid interns fared significantly better that other entry-level job applicants. According to the National Association of Colleges and Employers (NACE), the median starting salary for new grads with paid internship experience is $51,930. That's way beyond what collegians who had unpaid internships earned – about $35,000. "These results are consistent with what we saw with the Class of 2011," says Marilyn Mackes, NACE executive director. "Students with a paid internship have a decided advantage in the job market over those who did an unpaid internship or didn't do an internship at all."
NACE says that paid internships usually have college students and graduates working in environments where their skills are put to beneficial use by firms that really need the help. There's no fetching coffee for optimal internships – it's real work companies want done. "Paid interns spend much of their time engaged in 'real' work; employers prize that kind of hands-on experience. Conversely, unpaid interns spend more time on clerical tasks and less on the type of duties that employers value," adds Mackes.
What makes a successful internship for a college finance major? Let's take a look:
Doing the Work You Were Trained to Do
A great internship depends on what field you enter, such as investment banking versus accounting. But by and large, being busy using skills you've learned and developed in the classroom define the best internship experiences. The NACE study reports that paid interns spend 42% of their workplace hours on professional duties (analysis and project management) and only 25% on non-essential work like filing data or ordering lunch for full-time staffers. So if you're spending almost half your time doing challenging, rewarding work, your finance internship is on the right track.
How Many Hours?
College interns working in banks, brokerages and other financial services firms should aim for between 200 and 400 hours during their internship. Why? Because that's what hiring firms look for in terms of on-the-job interning experience.
What Pay Can You Expect?
On average, a paid internship means being compensated for about half the salary (and no benefits) of an entry-level salary for a similar job. In addition, factor in what you're doing and where you're doing it. According to Indeed.com, a job placement site, the average salary for a New York City internship at a investment bank is $41,000. While you shouldn't necessarily judge an internship on the size of the paycheck, if you're earning $25,000 or $30,000 (or more) for the entire internship, once again, you're on the right path.
What banks and investment firms pay the most for internships? According to Glassdoor.com, your best bet for a well-compensated internship comes from these financial services firms:
|Firm||Monthly Salary (Avg.) 2011-2013|
|Bank of America||$4,605|
|Ernst & Young||$4,214|
Signs of a Good Internship Program.
College grads and students wondering what other elements comprise a rewarding internship experience should look for the following elements:
- A direct internship coordinator, whose full-time job is managing interns
- A written blueprint from the company explaining its policy toward interns and its goals in its internship program - you shouldn't have to ask, the firm should give you one
- An emphasis on challenging - and not menial - work.
- Opportunities to mingle with, and learn from, staffers and management at meetings, seminars, company dinners and training sessions on a regular basis
- An opportunity to speak with former interns at the financial services company, to get their perspective on the internship experience
What steps should you take to secure a good financial internship? Getting a decent internship at a bank, insurance company, or other financial services firm is all about preparation. In that regard, cross these items off your checklist first:
Check Your Online Status
The unemployment line is littered with the resumes of college graduates who didn't take care of business in vetting their online reputations. Money management firms are, above all, extremely cautious about who they bring aboard to help manage client's money. In fact, most big banks and Wall Street investment firms insist on a background check, and most likely a drug test, to see that you're fit to represent the firm to the public.
That's why it's a good idea to scrub your online persona swiftly and thoroughly. Watch out for risky pictures on Facebook or inappropriate Twitter comments. Financial services companies will be on the lookout for what they deem to be risky behavior; avoid it and remove any examples of such behavior online before you interview with a money management outfit.
Use Technology to Your Advantage
Write a blog on finance and investment issues, host a podcast on stock market risk, or the state of the U.S. mortgage market or start an investment club (or at least join one). Financial firms love intern candidates who delve deep into the money management industry in ways that go way beyond pure academics. Those are the overachievers who land good internships and good job offers.
Start Your Networking File
Once you gain an internship, begin filing away the names and contact data for the professionals you meet along the way in your internship. It could be the contact who helped you win the internship, the broker or analyst who you've been assigned to help or the specific internship coordinator at your company. All can come in handy when push comes to shove and you're looking for a job offer.
Above all, make sure to write personalized thank you notes to all the professionals who've helped you along the way. Civility and good manners count for a lot on Wall Street and in the finance industry and may even mean the difference between leveraging an internship for professional gain or not.
The Bottom Line
While most paid internships are generally more rewarding in terms of experience, and can get you further in your career than unpaid internships, in the end you're better off if you can get any internship at all. The value of networking and experience goes far, whether you're earning a paycheck or not.