Morning Coffee: Elite MBA Grads Saying No to I-Banking

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MBA grads, who once fought tooth-and-nail for junior level positions at investment banks, have turned their focus toward other areas of financial services that are less volatile, even if they don’t provide the same eye-raising level of compensation.

The Wharton school at the University of Pennsylvania, viewed by some as a farm system for investment banks, has seen its number of fresh graduates entering the i-banking sector drop by nearly half over the last three years, according to a Financial Times report. The trend appears to be industry-wide.

The world's largest investment banks shed nearly 6% of their staff over the past year, cutting headcount by roughly 10,000. While many of these cuts affected senior-level execs, providing opportunities for younger and cheaper employees to fill their seats, MBA grads appear fearful of the volatile nature of i-banking, and have begun eyeing private equity firms and hedge funds as a result.

Other graduates of elite MBA programs are going into management consulting, experts told eFinancialCareers, and some are shying away from financial services sector altogether.

Another issue for i-banks is bonuses, known as the big selling point for most firms. Several investment banks have signaled that they will dial back bonuses this year to prevent more job losses.

At the end of the day, investment banking just isn’t as sexy as it was only a short time ago.

New Competition (Bloomberg)

Alasdair Haynes, who left alternative trading firm Chi-X Europe in 2011, is launching a rival firm, Aquis Exchange. Set to open its doors in mid-2013. Aquis has already hired four former Chi-X technologists.

Insider Trading Bust (The Guardian)

The U.K.’s Financial Services Authority has charged four men, including Martyn Dodgson, a Deutsche Bank corporate adviser, with conspiracy to commit insider trading.

Great Expectations (Forbes)

Employers expect to hire 13% more entry-level college grads in 2013 than they will this year.

Talent Poaching (Financial News)

Marathon Asset Management has successfully poached its third top exec from a rival asset management firm just this month. Michael Godfrey, a fund manager at M&G Investments, will join Marathon in December.

London Falling (Financial News)

The number of open financial services jobs in London has shrunk by 43% over the last year.

Playing it Safe (WSJ)

A group of financial experts assembled by the European Union are set to recommend implementing a system that would separate U.K. banks’ investment and retail units with the hope of better mitigating risk.

Another One Bites the Dust (WSJ)

J.P. Morgan’s $5.8 billion trading loss has apparently claimed another victim. Irene Tse, head of J.P. Morgan's chief investment office for North America, is leaving the firm to explore “external entrepreneurial ventures.”

Buzz Around the Office

Email Your Psychiatrist (RT)

If you’re like me, and spend most of your day staring at a computer screen, you may need to head to the doctor. And not an eye specialist; ‘Internet-use disorder’ has just been categorized as a mental illness.

List of the Day: Surviving a Layoff

Getting laid off is a helpless feeling that can affect your psyche as much as your banking account. Here are a few ways to stay positive.

  1. Don’t blame yourself. Many talented people are currently unemployed.
  2. Don’t sit around all day. Get up early and be active.
  3. Talk to professional confidants about your situation, leaving family and friends for the fun parts of life.

(Source: The Daily Muse)

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