Only the best need apply

The future looks bright for investment banks, who continue to attract the brightest, most ambitious graduates

Traditionally known for exclusively attracting the crème de la crème, investment banking has never been an easy area for graduates to break into. But the recent decline in graduate recruitment, caused by the downturn in the financial market, has made it even tougher. The good news is that this year employers report an upturn. Better still, they are confident about the future.

"The last couple of years have been down from the previous two years in terms of graduate recruitment, but things are starting to pick up and I'd say we are seeing guarded optimism," says Calum Forrest, head of recruiting for Goldman Sachs Europe.

For highly ambitious graduates with excellent academic ability, a fast mind and a passion for financial markets, the opportunities are there, agrees Tara Ricks, managing director of the recruitment agency Joslin Rowe. "But graduates still need to go that extra mile to stand out," she adds.

Mark Blythe, joint managing director of the undergraduate careers publishers GTI, explains: "The market may be picking up, but applicants increasingly have to compete with top graduates across Europe who tend to be more mature and focused and have completed more internships than their British counterparts."

Work experience is therefore beneficial, although not essential. "The important thing is for graduates to have taken up any opportunities that have come their way and, if possible, to have been proactive in finding opportunities," says Forrest.

What is crucial, he says, is showing commitment. Whether it's being chairman of your university economics society or operating your own modest portfolio of stocks and shares, employers want evidence of a real passion for finance that will help you cope with the pace and intensity of the business. "On a typical day, I arrive at my desk at around 7am and at 8am the market opens and the rest of the day is spent on the phone dealing with fund managers and financial institutions - it's a non-stop job," says Rory Codd, a 23-year-old research assistant at Investec.

Knowledge of the financial market, as well as the company to which you're applying, is key, adds Forrest. "Identify deals or transactions that the firm you are applying to has been involved in. At the end of the day, many people are capable of being an investment banker or trader and so establishing that you can do the job is only part of it. It is your passion and drive that may prove to be the differentiator."

While a background in numeracy, economics or accountancy isn't vital, it can be an advantage, and whatever your subject, academic ability is crucial - you'll need at least a 2.1. Evidence of a life outside academia is as important, adds Helen Bostock, head of graduate marketing at JP Morgan Chase. "We want to see involvement in extra-curricular activities like sport or societies," she says. "We want to see that you've had roles of responsibility and leadership, that you have good interpersonal skills, and that you have an all-round ability."

And because a career in corporate or commercial banking is more analytical and strategic than working on a busy trading floor, you'll need proof of skills in these areas - as well as being extremely streetwise and confident so that you're able to meet with and offer advice to clients at the very highest corporate levels.

JP Morgan Chase claims to take a very long-term view of recruiting. "Even though it hasn't been a good market, we've maintained our average annual intake of graduates of between 200 and 250," says Bostock. "That's because we feel the pipeline of talent is critical to our business and we would have gaps further on through the cycle otherwise. We've even seen a slight increase in numbers this year."

Foreign languages, while not a prerequisite, are worth pointing out to potential employers, particularly in today's increasingly global market, says Derek Walker, head of campus recruiting for Barclays Capital.

And preparation for the increasingly tough application processes - which usually begin online and finish in psychometric testing and face-to-face interviews - is also worth investing some time in. It's worth remembering, for example, that university careers services often enable you to test out online applications systems to improve your chances when it comes time to apply for the real thing.

"Often, we find that students are short on detail in our online application forms," says Bostock. "Graduates need to give two or three examples of things and be able to really sell themselves because their European counterparts are very confident."

An accountable alternative

Accountancy is the new investment banking. Charles McCloud, head of recruitment at PricewaterhouseCoopers, explains: "There is a significant cohort of top graduates who in the past would have looked to go into investment banking and are now looking to go into accountancy."

The obvious reason is that there are fewer jobs in investment banking and more in accountancy ­ indeed, the sector offers the bulk of today's graduate jobs ­ 23 per cent of the total, according to the latest study by the Association of Graduate Recruiters.

But it's not the only reason. "The work we do has changed to become much more exciting and varied," says McCloud. Indeed, accountancy is now a multifaceted profession, with company accountants for example being expected to take an interest in all aspects of a business, not just the purely financial, and the best of them have the ability to understand and influence the overall strategic direction a firm is taking. In fact, a large proportion of the CEOs in the FTSE 100 companies have come up through the finance director route and boast good accounting qualifications.

Better money, attractive inducements and more flexible working practices have enticed the best graduates. Flexible working conditions are simply not an option for investment bankers but they are important to many university leavers.

"Accountancy is having a field day when it comes to quality graduate applications and these graduates are reaping the rewards of a fast-changing and fast-growing area of business that is often really pleasant to work in," says Mark Blythe, joint managing director of the undergraduate careers publishers GTI.

And as Tara Ricks, managing director of the financial recruitment consultancy Joslin Rowe, points out, accountancy is an excellent training ground for any financial career ­ so you could move into investment banking at a later date. "The attraction of accountancy qualifications in the City has grown considerably during the past four to five years. After all, they are qualifications that indicate a high level of academic ability, as well as skills in analysis, maths and IT."

Ruth Stokes, marketing manager for recruitment and resourcing for KPMG, reports a significant increase in the number of graduate applicants opting for investment banking. "The professional qualifications that we offer are a safeguard for the future of graduates, whatever direction they decide to take," she says.