Figuring out what you want to do can be difficult. Business has seemingly infinite options, and it can seem that finance has too many fields to keep track of.
On this page, we try to provide you with a way of thinking of some of those careers, and ideas on what you should be doing outside of the classroom to explore those options.
More pages are provided below with insight into each area. Feel free to click around and explore!
The Finance Industry Layout
“I started as a sell-side analyst, where I spent a couple years learning about different industries before I decided to move.”
Often you’ll hear the terms “Buy Side” and “Sell Side” in finance. One can think of the Financial Services industry as being divided into roughly three main areas.
These are Buy Side, Sell Side, and Consulting & Advisory. Here’s a breakout of these groups before we explain in further detail below. Every bullet below is discussed in the following pages, with the links below.
What does “Buy Side” and “Sell Side” mean?
When someone needs to invest money and create a return, they do so by buying a financial asset. Individuals may buy stocks, which have value that grows over time or which pays dividends. A pension might buy ownership of a private equity fund (investing in that fund), with expectations of being paid back plus some return over a specified time period.
The buy-side refers to companies whose business models depend on them investing (e.g. pension managers are paid a fee for making these investments on behalf of their clients).
The sell side refers primarily to the banks which are able to create financial assets (also called securities) such as stocks, bonds, and more complex securities you may have heard of (derivatives, mortgage-backed securities).
They are called “sell-side” because rather than their business model being dependent on investing in companies, they create products which did not exist before and sell them to buy-side investors. For example, an initial public offering (IPO) is when a company which did not have public stock anyone could invest in before is listed on a major public exchange, allowing virtually any investors to buy their stock.
These terms can be bit confusing, as some buy-side firms certainly create financial assets which can be invested in (e.g. a private equity or venture capital fund). However, these terms are used frequently, so just understand that sell-side primarily refers to the investment banks which create these securities, and buy-side refers to the variety of firms which invest their clients’ money.
Click the following links to read more about each area of finance.