Merrill Lynch & Co., 2005 Edition: WetFeet Insider Guide

Merrill Lynch is a global powerhouse that combines immense

distribution capability with a breadth of product offerings for all kinds of clients—from its faithful Main Street customers to foreign governments and huge institutions. But a behemoth only remains one if it can respond to a changing marketplace. With an aggressive leader at its helm, today’s Merrill Lynch seems determined to do just that. Merrill’s strong position on Wall Street has made it a coveted

Merrill Lynch & Co.

Careers/Job Search

employer, and competition for jobs there is heated.

Merrill Lynch & Co.

Turn to this WetFeet Insider Guide to learn • How Merrill has been affected by and responded to current market conditions. • How the firm differs from the “white shoe” crowd. • What employees love most and like least about working at Merrill Lynch. • Where the firm is headed. • What exciting new developments job seekers should know about. • About the recruiting process. • Merrill insiders’ tips for acing your interview.

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2005 Edition

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Insider Guide

Merrill Lynch & Co. 2005 Edition

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Table of Contents Merrill Lynch at a Glance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 The Bottom Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Competitive Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Industry Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Research Rankings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 A Quick History Lesson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Organization of the Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 What’s Hot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

On the Job . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Investment Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Global Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Global Private Client . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Merrill Lynch Investment Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Corporate Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

The Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Lifestyle and Hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Workplace Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Compensation, Vacation, and Perks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Civic Involvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Career Path. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Insider Scoop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Getting Hired. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 The Recruiting Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 On-the-Record Recruiter Interview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Interviewing Tips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Grilling Your Interviewer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

For Your Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Recommended Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 For Further Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Key Numbers and People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

At a Glance

Merrill Lynch at a Glance Headquarters 4 World Financial Center 250 Vesey Street New York, NY 10080 Phone: 212-449-1000 Fax: 212-449-7357 www.ml.com

Primary Competitors • Investment banking: Goldman Sachs, Citigroup’s Corporate and Investment Bank, Morgan Stanley • Retail brokerage: Citigroup, J.P. Morgan Chase, Bank One, and Charles Schwab • Asset management: Credit Suisse Asset Management, FMR (Fidelity), and Goldman Sachs Asset Management

Key Differentiating Factors • Size and global reach: one of the largest U.S. securities firms with a significant global footprint • Breadth of products and services • Unparalleled distribution capabilities • A significant player in the institutional and retail sectors; vigorous banking initiatives

In the Recruiter’s Words “We want your passion for the markets to come through in an interview.” “You can’t be an average performer. You need to show how you’re the best at something. I don’t care if it’s knitting or physics. Show us how you can raise the bar.”

1

At a Glance

“We want people who are logical thinkers, but who are not rote thinkers.” “There are certainly students at the best-ranked schools who may not be as gifted as those who have cut their own paths. We dig underneath in our recruiting and interviewing to award appropriate credit for evidence of true achievement.”

In the Interview • Know your resume. Spin every job or activity listed as a skill-building exercise that prepared you for Wall Street. • Focus on teamwork. Demonstrate how you can coach the team, cheerlead, and pinch hit—all with a smile. • Do your research. Know where you’d fit in the organization, and know the Merrill principles—they’ll be listening for it. • Let your personality and enthusiasm shine through.

What Insiders Say “If you go to Wall Street, you’ve got to go to Merrill. [It has] really, really, good people. They’re smart and driven, but they’re willing to put stuff down on a Friday afternoon and go talk over a brew.” “It’s a very entrepreneurial place. You can make an opportunity happen for yourself—you’re not earmarked when you walk in the door. But if you prefer a structured environment, this isn’t the place for you.” “Merrill Lynch is all about teamwork. If the feedback on your interview is that you’re independent, that means you won’t fit in.”

The Career Ladder • Undergraduates are hired as analysts in the three core business units—GMI, MLIM, and Private Client—and in the growing area of corporate staff functions such as technology, operations, accounting and finance, and human resources. • MBAs come in as associates in investment banking, debt and equity markets, research, and the global private client business. • The summer training programs are the primary entry points for full-time analyst and associate positions.

2

At a Glance

• With offices in 35 countries, Merrill’s international reach is one of its biggest strengths. It is Merrill’s practice to hire local nationals where possible, but if you’re interested in working internationally—particularly if you have language skills—you should make that known. The focus of this guide is employment opportunities in the United States.



Anticipated U.S. Hires, 2004–05

Full-Time Analyst Hires Base salary Signing bonus Year-end bonus

250 $50,000–55,000 $8,000–10,000 discretionary

Relocation allowance

n/a

Full-Time Associate Hires

90

Base salary

$80,000–85,000

Signing bonus

$20,000–25,000

Year-end bonus

discretionary

Relocation allowance

$7,500

Summer Analyst Hires

250–300

Summer Associate Hires

100–120

Source: WetFeet research and estimates. Merrill Lynch does not release this information.

3

The Firm

The Firm • Overview • The Bottom Line • Competitive Strategy • Industry Position • Research Rankings • A Quick History Lesson • Organization of the Firm • What’s Hot

5

Overview The Firm

Merrill is a huge and well-diversified financial services institution that prides itself on having a strong cash position. But a behemoth only remains one if it can respond to a changing marketplace. Merrill has been criticized in the past for being less than lightning quick about change, but with Stan O’Neal at the helm, this simply is no longer the case. O’Neal, who became president in July 2001, CEO in December 2002, and chairman in April 2003, doesn’t appear to be one who wastes anything, much less time. Ranked 58th on the Fortune 500 (down from 36 in 2002), O’Neal’s Merrill Lynch is a lean, mean, profit machine. His campaign to rid the company of fat was no-nonsense. He cut some 20,000 jobs (reports vary from 18,100 to 23,000) including a fair portion of the top executive staff—firing two of his once-closest aids, reportedly for politicking behind his back. Industry experts credit O’Neal with saving Merrill—they claim that without his aggressive and early action, the firm would not have survived as one of the few remaining independents of Wall Street. Not only did Merrill survive, it produced a record $4 billion profit in 2003, and its stock has outperformed most of Wall Street’s other giants. Deal flow is up, the firm is hiring, and the board rewarded O’Neal with compensation of $28 million for 2003 ($14 million in cash and $14 million in long-term incentives). “It’s 180 degrees different here than it was 12 months ago,” says an insider. “Almost every day there’s an announcement about a new hire at the senior level. They’re bringing in rainmakers.”

6

But insiders tell us the success came at a cost. “Morale is finally starting to pick up,” says one insider, “but many people are burned out. The market is booming, but it was so taxing when we were understaffed.” rock bottom, and people took on more responsibility to cover positions that had been cut. Now that things are turning around, some are moving on—taking the opportunity to try something new. “At the associate level, people are hopping around. The banks cut so deeply, the opportunities are out there. Everyone is

It’s 180 degrees different here than it was 12 months ago. Almost every day there’s an announcement about a new hire at the senior level. They’re bringing in rainmakers.

The Firm

Salaries were frozen for 3 years, bonuses dropped to

“”

hiring so much that if you’re looking for a change in scenery, you can do it without a lot of work.” As if internal matters weren’t challenging enough, the firm’s public image has been tarnished with legal and regulatory challenges the past 2 years. It paid $200 million as a result of the industry-wide investigation of research practices and $80 million for its role in a trade involving Enron. A suit over its dealings with Tyco has been dismissed; two former staffers were key to the verdict in the Martha Stewart case; and in 2004, arbitrators awarded a large settlement for discriminatory practices toward female stockbrokers in the 1990s. Nevertheless, insiders insist that Merrill is one of the most ethical firms on Wall Street and that it doesn’t deserve the bad rap. Meanwhile hiring is up industry-wide, and Merrill recruiters are preparing for one of the most competitive recruiting seasons they’ve encountered in a while. But don’t expect a seller’s market to compromise Merrill’s ability to hire the best

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and brightest. And if you’re interested in working here, be sure to know the five core Merrill principles by heart: 1. Client focus

The Firm

2. Respect for the individual 3. Teamwork 4. Responsible citizenship 5. Integrity Merrill prides itself on long-term client relationships that go well beyond the individual transaction or product of the hour.

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The Bottom Line The Firm

Merrill Lynch is a global powerhouse combining immense distribution capability with a breadth of product offerings for all kinds of clients—from its faithful Main Street customers to foreign governments and huge institutions. The firm is once again positioned for growth and is in hiring mode. Of course, whether it was growing or cutting, Merrill has consistently invested in its future by filling its analyst and associate training programs. Job opportunities in the analyst training program are particularly strong for undergraduates in 2004–05. In addition to the traditional investment banking positions of corporate finance, mergers and acquisitions, and sales and trading, analysts can work in investment management, financial advisory, and a variety of corporate support functions. More than half of the new analyst recruits will be placed in accounting and finance, human resources, technology, and transactions and custody. To be successful you need both an entrepreneurial attitude and a team focus. You’ll be an entrepreneur in positioning yourself well in the firm and managing your career. And while Merrill rewards its stars, it’s very much a team environment in which groups that are less successful share bonus compensation with those who had a good year.

9

Competitive Strategy The Firm

Merrill’s size and diversity are strong assets that serve the firm in times of both boom and bust. Not only is Merrill an investment bank, it also has a healthy retail brokerage business and a thriving asset management operation. With 48,100 employees, the firm may be smaller than it was a few years ago (when it was 70,000 strong), but it’s still among the world’s largest financial management and advisory companies. In a key strategy to diversify product offerings, Merrill has added a portfolio of banking products, competing in this realm with Citibank, Morgan Stanley, and Bank of America. Its financial advisors are just as likely to sell insurance and mortgages as they are to broker a stock trade, and the company now aggressively targets the high-net-worth set. As stated in its 2002 annual report, “We believe it is no longer necessary for our clients to maintain a relationship with any other financial institution.” And at a time when industry experts say we haven’t seen the last of consolidation in the banking industry, Merrill remains independent, something in which insiders take great pride. To the suggestion that Merrill’s restructuring is a preparation for acquisition, Fortune magazine quotes Stan O’Neal as saying, “Bullshit.”

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Industry Position The Firm

Third-ranked Merrill was once the undisputed industry leader in underwriting. After 11 years, Merrill surrendered its top rung 2 years ago to Citigroup. With a 7.1 percent market share of the deals done in 2003, Merrill has now fallen to third, just behind Morgan Stanley’s 7.4 percent share. At the top, Citigroup garnered 10.2 percent. But what may look like a fall from grace is actually the result of a stated business strategy. At O’Neal’s Merrill, a deal is no longer a deal; it must be a worthy deal. It must meet profit targets or it’s a no-go, regardless of how that will look on the volume-weighted league tables—the industry’s generally accepted measure of success. The 2003 tables, where Merrill either held its own or lost footing, are evidence that the firm continues its emphasis on profitability over volume. Keep in mind as well that Merrill’s investment banking unit received the brunt of O’Neal’s staff cuts. Working with roughly half the staff it once had is certain to have affected the volume of business conducted. Regardless of its leaguetable report card, Merrill scored record profits in 2003, something the league tables don’t measure. As an indication of Merrill’s competitive strength, the firm won a coveted appointment in early 2004 as the only advisor on the sale of AT&T Wireless Group, a deal valued at roughly $30 billion. Goldman Sachs (ranked number one in M&A volume compared to Merrill at seventh place), which along with Merrill and Citigroup advised AT&T on its IPO in 2001, is conspicuous in its absence from this critical deal.

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2003 Industry Rankings Rank 2003 2003 2002 Amount ($B) Share (%) Deals

The Firm

Category Global debt & equity

3

2

380.3

7.1

1,914

Global equity & -related issues

5

3

31.1

8.0

157

Goldman Sachs

Global equity

4

4

16.1

7.2

94

Goldman Sachs

Global debt

3

2

349.3

7.1

1,757

Global short-term debt

1

1

111.6

24.1

937

Merrill Lynch

M&A, global announced

4

6

211.4

n/a

n/a

Goldman Sachs

U.S. debt & equity

3

2

304.0

9.0

1,633

U.S. equity & -related issues

5

3

19.0

10.2

118

Goldman Sachs

U.S. common stock

4

5

8.7

9.6

70

Goldman Sachs

U.S. debt

3

2

285.0

8.9

1,515

U.S. IPOs

5

5

1.5

9.2

12

Goldman Sachs

M&A, U.S. announced

7

8

86.9

n/a

80

Goldman Sachs

Source: Investment Dealers’ Digest, 1/05/04 and 1/12/04.

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Top Firm Citigroup

Citigroup

Citigroup

Citigroup

Research Rankings The Firm

Institutional Investor Ranks the Wall Street Firms The following rankings are pulled from Institutional Investor’s annual analysis of research departments on the Street. Research has been intensely scrutinized since Eliot Spitzer blew the whistle on industry-wide practices that give the appearance of conflicts of interest. Merrill and other firms—while admitting no wrongdoing—paid stiff fines and scrutinized their practices to more fully separate research activities from deal-making. Meanwhile the research analysts continue to do the jobs they’ve always done: researching companies and analyzing trends. Here’s how the highly regarded Institutional Investor survey rated the results.

2003 All-America Research Team: Merrill Ranks #3 Merrill maintained its third-place position for the third year after 6 years at the top. The real upset on this team: Lehman leaped from an almost threeway tie with Merrill and Citigroup to a clear lead with 50 positions, followed by Morgan Stanley and Merrill neck and neck at 36 and 35 team positions, respectively.

2003 Global Research Team: Merrill Ranks #2 Merrill nudged in front of 2003 front-runner Morgan Stanley to place second for overall global equity research with 22 team positions—first-ranked UBS had 23 team positions.

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2003 Emerging-EMEA Research Team: Merrill Ranks #3 In a new ranking of research performance in the emerging markets of Europe, the Middle East, and Africa, Merrill placed third with six team positions, behind UBS with ten positions and ING Financial Markets with seven positions. Previously

The Firm

this research was included in the All-Europe Research Team survey, where Merrill also placed third in 2004. A separate survey was done because of increased money flow from Eastern Europe, Israel, and South Africa.

Other Teams Merrill also placed third on the 2004 All-Europe Research Team, fourth on the 2004 Latin American Research Team, eighth on the 2004 All-Japan Research Team, ninth on the 2004 All-Asia Research Team, and tenth on the 2003 AllAmerica Fixed-Income Research Team.

Best on the Street 2004 Analysts Survey Merrill recaptured its number one position on the Wall Street Journal’s “Best on the Street” review of analysts’ accuracy in stock performance. Before 2001, Merrill had placed first for 4 years in a row. Pharma analyst Gregory Gilbert received a first-place citing out of 4,000 analysts from 230 firms. Eleven additional research analysts at Merrill also placed in the survey. Source: Wall Street Journal, 5/17/04.

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A Quick History Lesson The Firm

Known as the man who brought Wall Street to Main Street, Charles Merrill started his first brokerage firm in 1914. Later that year bond salesman Edmund Lynch joined him, and the two built a thriving business during the robust economy of the next 15 years. But the Great Depression was just around the corner, and to avoid the worst Merrill and Lynch sold their business to E.A. Pierce, Wall Street’s largest brokerage firm at the time, and remained only limited partners. In the 1930s, Merrill took a sabbatical from the financial world and tried his hand at the retail business, developing a grocery store called Safeway. A decade later, Pierce called Merrill back to manage the Wall Street firm. By 1941, he had merged the company with Fenner and Beane to form Merrill Lynch, Pierce, Fenner & Beane. In the 1940s, Merrill decided to adopt an innovative business model that used a trained sales force to solicit the general consumers’ retail brokerage business. These knowledgeable brokers, armed with research on the best stocks to buy and a storefront on every corner, were a hit with this as-yet-untapped customer base. By the end of the decade, Merrill Lynch was the largest brokerage firm on Wall Street. Merrill Lynch continued its run through the next 20 years, becoming one of the first member firms of the New York Stock Exchange to incorporate (1959) and go public (1971). In the 1960s, the firm ventured into asset management through its subsidiary, Merrill Lynch Asset Management. In the 1970s, under the direction of Donald Regan (later treasury secretary and chief of staff for President Reagan), Merrill introduced its cash management account, which combined brokering and credit in a bank account—a move that took the firm’s less enterprising commercial banking competitors by surprise.

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• The global energy and power group works with companies involved inoil and gas exploration and production; electricity and natural gas generation, transmission, and distribution; and advanced energy technologies. The energy group is headquartered in Houston, Texas, and the power group is headquartered in New York. Group members also work out of offices in London, Hong Kong, and Singapore.

The Firm

• The global industries and communications group covers six industry sectors from offices in New York, Chicago, Los Angeles, Palo Alto, London, and Toronto: - Consumer: Clients include the Benetton Group, Home Depot, Nestle, Procter & Gamble, and PepsiCo. - Health care: Clients include Eli Lilly, Roche Holding, IDEC Pharmaceuticals, MedImmune, and Schering-Plough. - Industrials: Clients include Alcoa, Boeing, General Electric, General Motors, Siemens, DuPont, FMC, and Dow Chemical. - Media: Clients include Clear Channel Communications, Cablevision, PRIMEDIA, Viacom, and WPP Group. - Technology: Clients include Hewlett-Packard, Ericsson, Taiwan Semiconductor, Novellus Systems, and Siebel Systems. - Telecom: Clients include AT&T, Verizon, Qwest, Alltel, and BellSouth. • The real estate and hospitality group is organized in relationship management teams focused on specific sectors: real estate operating companies; hotels, restaurants, and leisure companies; opportunity funds; and financial institutions involved in real estate. Group members work out of New York, Los Angeles, London, and Tokyo. Product groups work with clients spanning all industry sectors on specific projects that involve debt, equity, and investment banking products: • The corporate finance group involves capital structuring and financing, monetization alternatives, subsidiary redeployment, and structured M&Arelated transactions. Group members work out of New York, Los Angeles, London, and Tokyo. • The financial sponsors and leveraged finance group consists of four teams working out of New York, Los Angeles, Palo Alto, London, and Tokyo:

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- Financial sponsors recently handled Madison Dearborn’s acquisition of Jefferson Smurfit, the largest-ever European LBO, and Blackstone’s acquisition of TRW Automotive.

The Firm

- Global leveraged finance underwrites high-yield bonds, syndicated loans, and mezzanine securities and arranges syndicated financings for LBOs, recapitalizations, leveraged acquisitions, and growth capital. - Private equity placements–direct raises private equity on behalf of private, pre-IPO, and public companies for growth expansion, acquisitions, or other specific projects. - Private equity placements–funds raises institutional capital for top-tier third-party alternative investment managers. • The mergers and acquisitions group has full-time professionals in all major financial centers throughout the world and industry-specific knowledge in media, telecom, technology, retail, utilities, real estate, energy, and global manufacturing and services. Group members work out of New York, Palo Alto, Los Angeles, Toronto, London, Frankfurt, Paris, Tokyo, and Hong Kong. Equity markets. Equity markets centers on the sales, trading, structuring, and

origination of equity and equity-linked offerings. It is organized around three desks: cash, capital markets, and equity-linked products. Offices are located in New York, Chicago, Boston, San Francisco, Toronto, London, Hong Kong, Singapore, and Seoul. Debt markets. Debt markets is organized into six desks that trade, structure,

and originate fixed-income offerings: credit, foreign exchange, rates, principal investments, investor, and issuer. Offices are located in New York, Dallas, Chicago, Boston, San Francisco, Toronto, London, Hong Kong, Singapore, and Seoul.

Global Private Client Financial advisors offer clients advice, guidance, and services ranging from financial planning and account management to mortgages and insurance. Financial advisors in branch offices around the world work with individual

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clients. Those with assets exceeding $10 million are served through private wealth management teams in major money centers such as Atlanta, Austin, Chicago, Dallas, Los Angeles, San Francisco, and New York. A business financial services group in Chicago specializes in the small- and midsize-

The Firm

business market. Six core functions support the financial advisors from Princeton and Hopewell, New Jersey: private banking and investment (high-net-worth individuals), investments and wealth management (product development and distribution), banking, retirement, marketing, and direct services.

Merrill Lynch Investment Managers MLIM manufactures mutual funds, markets them, and deploys a sales force to put them in the hands of the public. Merrill funds are ranked in the upper quartile by Lipper and Morningstar and are available through financial consultants (including those of Merrill’s Global Private Client group) in the same manner as Putnam, Oppenheim, or Fidelity mutual funds. Headquartered in Princeton, New Jersey, MLIM is organized into three business units: 1. Investments: equities, risk, fixed income, and private consulting for investors with $700,000 or more to invest, and institutional, which manages the assets of corporations, pension funds, endowments, and insurance companies 2. Marketing 3. Distribution, with three main channels: proprietary, nonproprietary, and institutional

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View from the Bottom Recruiting is competitive. If the first round of interviews is your first introduction to Merrill, you’re likely to find yourself in the back of the pack. Insiders

The Firm

repeatedly tell us to make every effort to get into the offices and talk with people long before the interview process begins. Not only should you be very certain that the financial services industry is the right career choice for you before you ever shake hands with a recruiter, you’ll also need to know which of the three business units you’d like to join, or whether your interest is in the growing ranks of the corporate resources groups. Also consider which function would be a successful match for your interests and skills. Both the content and style of your work with Merrill will depend on your entry point. While teamwork is one of the five Merrill commandments, it’s clearly more important to an I-banker putting together a presentation with a group of associates than to a trader responsible for trading his or her own position. That said, sales teams here are more teamwork-oriented than at most other Wall Street banks. “This place puts a huge emphasis on teamwork,” says an insider. “It’s a major category in the 6-month review. I had a client remark on this yesterday. Even though we’re doing sales, the emphasis is on giving the best coverage for the client. And we always share information: If there’s a news item, we yell it out across the desk. I didn’t see that to be the case at the other firms where I interviewed.” Clout varies by division, too, and there are differences in personality, culture, and traditions from group to group and office to office, most notably between the fast-talking, swaggering traders and salespeople and the somewhat more polished I-bankers. However, insiders tell us that some constants exist. Because of Merrill’s size and its origins as a retail firm, it tends to exude less attitude

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than other firms on the Street do. According to some, Merrill employees don’t take themselves quite as seriously as their counterparts at more traditional white-shoe investment banking firms. There are plenty of Ivy alumni, but backgrounds are generally more diverse than you’d find at other top banks.

The Firm

What’s Hot Looking to the Long-Term With interest rates on their way up and a backlog of companies waiting to go public, equities are back in the spotlight for 2004. Insiders tell us that health care and real estate are the industry groups with the best deal flow right now. It’s tempting to want to work where the action is, but insiders recommend taking a more long-term view. Banking is a cyclical business. “Our goal is to perform well across market cycles,” according to Stan O’Neal’s message to shareholders in the firm’s 2003 annual report. “I think that candidates too often look for the area that’s hot, rather than where they’d be the happiest,” says an insider. “That’s not a long-term way to look at your career, particularly considering the investment you’ve made in business school. You need to figure out what you think you’d like. Come in and sit with people and see what they do. You’ve got to spend a lot of hours here. If you don’t like what you do, you’ll regret your decision. The ultimate goal is finding a good job. Don’t always go for what’s hot. Go for what will make you happy.”

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Total Merrill Merrill is growing its Private Client group with a portfolio of banking products for individuals and small businesses that include mortgages, insurance contracts,

The Firm

and stocks and bonds. Total Merrill product offerings include a federally insured cash-management service called Beyond Banking that goes head to head in competition with commercial banks. The idea is to eliminate the need for multiple accounts and advisors. By offering clients the efficiency of one financial advisor who can manage the full spectrum of one’s finances, Merrill is able to diversify the firm’s revenue and reduce its vulnerability to market volatility.

Taking the Conflict Out of Interest Under terms of a settlement with the Securities and Exchange Commission, the North American Securities Administrators’ Association, the New York Stock Exchange, the NASD, and New York Attorney General Eliot Spitzer (who started it all), nine Wall Street banking firms, including Merrill, paid fines and set up checks and balances to separate research from banking. Many argue that little of what is wrong with the system is due to intentional wrongdoing (as in the case of analysts who own shares in the companies they cover as has been alleged at Citigroup’s Corporate and Investment Bank) or the few bad apples like Merrill’s Henry Blodgett (who was personally fined $4 million and barred for life from the securities business). Rather, it is due more simply to the inherent pressures of competing interests (you try telling the investment banker handling the merger of ABC and XYZ telecom that you’re downgrading your recommendation on her client). Nevertheless, the banks have agreed to change the way they compensate analysts (not from investment banking business) and to prevent research analysts from accompanying bankers on pitch meetings or road shows. Merrill prohibits its

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research analysts from owning stock in the companies they cover, and the function reports directly to the CEO, not to the investment banking group. Meanwhile, insiders say the fundamental question remains one of revenue— that the issue will not be satisfactorily resolved until research departments can

The Firm

stand on their own as profitable units of business. “The firm and Wall Street will struggle as to what’s the right size for the research department. We provide the product that sales sells and traders trade on, but we don’t make money on it,” says one insider. “We get funded by other departments.”

The Rich Get Richer Merrill is strengthening its resources to serve the growing millionaire market. Private Client insiders say service to high-net-worth individuals is definitely a hot place to be. “Merrill has not typically been a major player in the top end,” says one insider. “It’s owned the low end. It worked to build the wealth of a corporate executive, but would often then refer him to Goldman Sachs because Merrill felt it didn’t have the tools to serve him.” Not so anymore. Private Client wealth management teams actively court individuals of net worth in excess of $10 million and provide advice on not only investing, but also on estate planning, charitable trusts, endowments, and other tax trappings of the rich. Along the same line, one of the more profitable areas of MLIM is called “private investors/consults.” Under this program, MLIM manages the funds of individuals with $700,000 or more to invest, giving them access to the best fund managers as if they were an institutional investor like a pension fund.

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On the Job • Investment Banking • Global Markets On the Job

• Global Private Client • Merrill Lynch Investment Managers • Research • Corporate Resources

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Investment Banking As part of investment banking, you’ll be helping corporations and other institutions define and execute their financial and strategic goals. Depending on which area you join, you could be executing debt or equity offerings, advising clients on mergers and acquisitions, or restructuring companies whose financial needs have changed. The kind of work you’ll be doing reflects the cyclical nature of the markets. And certainly when the market is up you’ll need to be prepared to

On the Job

handle multiple projects, often with very high stakes. During a bear market, you may spend more of your time helping generate new business than working on live deals; however, Merrill’s industry position pretty much guarantees things will be hopping regardless of whether you’re pitching deals or structuring them. Your workload will also depend on the group you’re assigned to. The work in investment banking is very team-oriented, and you’ll work closely with your group as well as with clients, lawyers, and people in other divisions of the firm. Whichever investment banking area you choose, you’ll rarely see the light of day except through your office window—if you’re lucky enough to get one. Insiders tell us that the unpredictability of the work flow can be daunting. At the height of the bull market, an analyst reports that it wasn’t unusual to work on three M&A transactions at the same time. Is that a lot? “This week it isn’t,” one insider says. “But ask me next week, and we might be here 24/7.” “It’s not just the hours. I can deal with 60-hour weeks,” says another insider. “But I have a vacation planned in a few weeks, and I might not be able to take it. That’s difficult, especially with a wife and son.” MBAs are recruited as investment banking associates and, after a customized training program, are assigned to an industry or product group. Undergraduates

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are recruited for a 2-year analyst training program. After 2 years, analysts generally return to school to

“”

pursue an MBA or move on to other jobs outside the industry. In some cases, exceptional analysts are promoted to a third-year analyst position.

Day-to-Day Tasks • Build spreadsheet models to analyze financing alternatives • Perform valuation analyses • Analyze financial statements and review business plans

On the Job

• Travel to company sites and meet with clients

No matter whether it’s a bull market or a bear market, it’s a good time to join Merrill. This business is cyclical and over the course of your career, you’ll get both the up and the down. Eventually you’re going to get the full experience.

• Work with bankers to structure and close deals • Work with sales and trading forces on market issues • Work with lawyers to develop offering prospectuses

A Day in the Life of an Investment Banking Associate 6:30

Alarm goes off. Dawn of another 80-hour week—with any luck.

7:30

Dash off a quick e-mail or two via Blackberry on the way to work. Grab a cup of coffee and listen to voice mails. Left the office at midnight yesterday and there are already three messages. Somebody didn’t sleep.

8:00

Review to-do lists, tackle the e-mails that require lengthier responses, and check news sources—the Wall Street Journal, market summaries, etc.

9:00

Conference call with VP to interview a pharma company’s CFO and CEO as part of due diligence on a bond offering.

10:30 Call underwriter’s counsel regarding outstanding issues in debt exchange offer. Managing director is pushing to have the memorandum completed by end of day.

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11:00 Help junior analyst prepare presentation for new medical equipment company in Canada—revise some of the positioning bullet points and recommend running an additional set of numbers and graphs. 12:00 Listen to voice mails back at desk while eating a sandwich. Pound out replies to the new, urgent e-mails at the same time. Who said multitasking was hard?

On the Job

12:30 Sandwich done. Call the lawyer again to find out estimated time of arrival for that memorandum. 1:00

Find fellow associate and brainstorm about good gifts for a client’s convertible deal closing dinner. The company’s stock is trading well, so the client is going to be ready to celebrate. Perhaps some fencing gear for doing battle with their competitors.

2:00

Make remaining due diligence calls on the pharma company, and write a memo summarizing findings for the client.

3:30

Review analyst’s work on Canadian medical equipment company presentation and make additional edits.

4:00

Refine model projecting financial performance on the pharma bond deal. Need to incorporate new economic assumptions released by research this morning.

6:00

The desk is a disaster area—too much paper for too many different projects. Time to get organized.

6:45

Check out favorite menus and order some Italian for tonight.

8:00

Work with analyst to get the medical equipment presentation in final form.

10:10 Leave copy of presentation on VP’s desk for his review first thing tomorrow. 10:30 Go through deals in head and make tomorrow’s to-do lists for each. Return yet more e-mail. 12:00 Ride the elevator with a few other yawning specimens. Journey home.

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Global Markets “In Global Markets, people go for equity or for fixed income. In my class there were very few who wanted to do equity,” says a first-year associate. “You have to be willing to deal with uncertainty. In our business, your salary is minimal compared to your total pay package. I could end up this year with a bonus of $40,000 or $120,000. There’s a lot of moving parts.” Global Markets includes the following teams:

On the Job

1. The debt markets division serves two kinds of clients: those issuing debt and those investing in it. The products consist of a full menu of short-, medium-, and long-term debt instruments. 2. The equity markets group is responsible for the origination, sales, and trading of all equity and equity-linked products, including traditional listed and over-the-counter U.S. and ADR securities, convertibles, and derivatives. You can enter Global Markets as an undergraduate or an MBA. Customized analyst training programs exist in debt, equity, and relationship management and include a formal mentor program. MBAs are recruited as debt markets or equity markets associates. Customized associate training simulates the actual work environment while preparing participants for the required Series 7 and 63 licensing exams.

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Who Does Well Recruiters tell us that in sales and trading they look for passionate go-getters who are aggressive and smart and have strong analytical capabilities, good judgment, and demonstrated team and communication skills. In sales, you need a refined aggressiveness and personal presence, attention to detail, and followthrough. Origination requires all of these things, plus creativity and strong verbal ability. If you’re interested in structuring, you’d better register on the extreme high-end of quantitative abilities. You have to comprehend derivative theory and have an

On the Job

interest in solving complex problems. A background in math, engineering, statistics, or programming is helpful. But that alone isn’t enough. “We love quant jocks,” says a recruiter. “But you have to be able to sell the products as well as structure them. You have to transfer your quantitative and analytical skills to the trading floor.” New recruits on a trading desk must have patience. As one insider puts it, “You need to be able to handle getting coffee for the desk on a regular basis and working with spreadsheets and trades with equal enthusiasm.” An ability to work in a fast-paced, high-pressure environment is a definite prerequisite for joining this area. Says one insider, “It’s not just that you’re a trader looking at the same screen day after day. There’s a multifaceted aspect to each group, so the variety of work and skill sets you develop are huge. It’s a good place to be.” “In business school the most applicable class is strategy, not finance, accounting, or economics,” says an equity trader. “Strategy is about how a

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management runs its business. This job is good for someone interested in consulting but who doesn’t want to be a consultant.” But Merrill recruiters warn against selling the number skills short. “Accounting, economics, and finance are critical to the trading process,” says one. “Trading is not for private people. Because everything (on the trading floor) is so visible, people know a lot about your life,” says one trader. “We don’t go to lunch. But if you do go to lunch with

It’s not just the hours. I can deal with 60-hour weeks. But I have a vacation planned in a few weeks, and I might not be able to take it. That’s difficult, especially with a wife and son. On the Job

someone, everyone knows that you have something

“”

in particular to talk about. If I stretch my arms out, I’ll have my hands on my boss and a senior colleague. That’s how close it is. This desk is 5 feet long, and the next starts right after it. Your life is exposed to people all day long.” “It may sound corny, but I like seeing the names of issuers I trade on the side of a truck when I’m driving down the highway or when I open a can of soda,” says a corporate bond trader. “I like to see how what I do impacts everyday life for people in this country.”

Day-to-Day Tasks Work in this area falls into four main functions: sales, trading, structuring, and origination. Generally you will build the firm’s knowledge of client investment needs, assess market trends and economic themes, work with teams to make client presentations, develop and market new products, and manage risk and provide liquidity for both Merrill and its clients.

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Debt Markets has six desks: 1. Credit 2. Foreign exchange 3. Global principal investments and secured finance 4. Investor 5. Issuer 6. Rates

On the Job

Equity has three desks: 1. Cash 2. Capital markets 3. Equity-linked products

A Day in the Life of a Trading Associate

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6:15

It’s still dark out, but head out the door anyway. First stop is the gym, conveniently located in Merrill’s building.

7:30

Endorphins flowing, arrive at desk and bring computers to life. While spreadsheet prices update, scan Bloomberg and Reuters for market news. Glance at the Wall Street Journal and the Financial Times as well, mainly just to confirm wire stories.

8:00

Run downstairs to grab breakfast. Run back up.

8:15

Analyze risk profile. This daily chore doesn’t take much time once the models are running smoothly. Enter a couple of swaps into the books to reduce interest rate exposure.

9:00

Begin revising term sheet for a trade that a Brazilian client brought off the shelf last night. Call sales to go over specifics again and then start running numbers at new prices.

11:00 The floor is humming now. Turn away from spreadsheets to execute a few flow trades while the market is strong. 12:00 Lunch. Hurry to beat crowds since there’s no time to stand in line. Goal is to be back at the desk in less than 10 minutes. 12:15 The desk’s lawyer has questions about new term sheet. Together, go find sales guy and figure out how to restructure the trade. Summer intern on desk is having trouble writing some code for a new derivative pricing model. Offer a few tips, but plan to go over in more detail after the market closes.

3:00

Sales confirms that restructured trade is now a full goer (i.e., ready to trade) and wants to know if it will execute today. The bonds seem to be trading a little rich (expensive), so suggest holding until tomorrow.

4:00

Market closes up for third day in a row. Speculate with the desk whether the treasury release tomorrow will throw it a curveball.

4:15

Hunker down with the intern for a little Visual Basic primer. Who would have known that traders could double as programmers?

5:00

Check to make sure the synthetic trades for the risk model went through. Then close out spreadsheets for the day.

6:00

Wander over to sales to see if anyone is still around. Bounce a new idea for a basket trade off the few diehards still at their desks. It might be perfect for two big hedge-fund clients in Hong Kong.

6:45

Meant to leave 15 minutes ago to make that 7 p.m. reservation. While waiting for elevator, call restaurant from cell phone and plead for them to hold the table.

On the Job

2:00

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Global Private Client These are the folks who advise clients (individuals rather than institutions) on investing. They’ve passed the necessary General Securities Exams (Series 7 and Series 66) and/or the Certified Financial Manager Exam. Career changers are recruited as financial advisors in the field directly by the respective branch offices. “The hours are long but they’re not [investment] banking hours,” according to an insider. “The money’s comparable to banking if you’re good at it, and you

On the Job

don’t have to kill yourself to get there. It’s tough to get there, the hurdle’s high, and most people probably don’t make it. But that’s true in banking, too.” Opportunities for undergraduates and MBAs exist in the six functional areas that support the financial advisors. There is a 2-year training program for analysts that includes a 4-week assignment in a branch office. There is also a credit analyst program in the business financial services unit in Chicago. MBAs are recruited for a 2-year private client associate program in one of the six functional areas, or a 30-month private wealth associate program working with a private wealth management team for high-net-worth clients. 1. Private banking and investment provides financial planning for high-networth clients with $10 million or more in total investable assets. 2. Banking develops and markets credit, mortgage, banking, cash management, and business financing services to both individuals and businesses through several groups: financial services, securities-based lending, and the Merrill Lynch Bank.

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3. Investments and wealth management focuses on product development and distribution across all product platforms, including equity, debt, and structured products. 4. Retirement provides employer-sponsored programs, defined contributions, defined benefits, stock options, nonqualified plans, and IRAs and 529 products for individuals. 5. Marketing develops, tests, implements, and

“”

We love quant jocks. But you have to be able to sell the products as well as structure them. You have to transfer your quantitative and analytical skills to the trading floor.

coordinates marketing strategies, advertising,

On the Job

and market research. 6. Direct services provides the Financial Advisory Center, a team-based service for clients, and the firm’s Internet brokerage platform, Merrill Lynch Direct.

Day-to-Day Tasks Business Management: • Develop strategic business plans • Conduct competitive research • Market investment vehicles • Assess and track performance of products and services • Evaluate a product or market segment • Plan and design ad campaigns Credit Specialist: • Make credit risk decisions about commercial lending • Analyze corporate and personal financial statements • Help manage loan portfolios and process loan renewals

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On the Job

A Day in the Life of a Private Wealth Associate 7:30

Hop on the subway. When I arrive at the office, I never know exactly what to expect. My work is dependent on the mood of the managing director. I like the entrepreneurial nature of the job, but sometimes I find myself wanting a long-term goal to aspire to.

8:00

I need to go through slides for a presentation at 10 a.m. The managing director has made countless changes.

8:45

I have a JD and an MBA. The other associate who shares my cubicle says, “Yeah, instead of a career in law, you opted to pursue a career in PowerPoint.” Funny.

9:55

We’re still making changes in the slides, and the presentation is in 5 minutes.

10:00 Ready. We go to the meeting. Part of our mentorship is that we attend meetings with those two levels up from us. This group of 15 senior Merrill executives is definitely that. If I do well, I get noticed by the top. If I don’t, that also gets noticed. 10:30 My boss makes the presentation. People are shooting out questions. There are two associates here—we ran all the numbers. We chime in when we’re given the nod. 10:40 Things are getting hot. There’s yelling and some swearing. It’s something they encourage—not a bad thing. They want strong people. It’s not about your position. It’s about what you’re saying and your passion about what you believe in. 12:30 The meeting’s over. Based on comments made, I know what I have to do. 12:45 Grab a quick lunch in the cafeteria downstairs and bring it back to my desk.

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1:15

I need to run the numbers a different way. I call and talk to this guy who can give me what I need.

2:00

The guy gives me a huge data sheet. I begin to pull out the numbers I need for my analysis. I have a few days, and it will take me that long. The thing is huge.

3:00

Need a cup of coffee. The numbers are starting to blur.

I run into another associate from the training program and talk for a minute at the elevator. You don’t want to be seen wandering around and talking too much, but you do a little of it. You have to be mindful of your career and what you want to do. They don’t encourage rotation in this training program, so if you want to do something else, it becomes a political thing. You have to tell your manager you want to do something else, and it doesn’t always go over so well.

3:15

Nose to the grindstone.

4:00

More phone calls to get the data I need. It’s good to make a lot of contacts. At the end of training (2 years), I need to have found a job for myself here. It’s not a structured program. It’s up to you to define your job. You’re getting paid by Merrill, not the unit. At the end of the training, you’d have better proved your worth. Another crop of trainees will be coming in that the unit gets for free.

8:00

We can order dinner on the company if we work after 9 p.m. That’s not the case tonight. I can head down to the gym to work out.

On the Job

3:05

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Merrill Lynch Investment Managers MLIM serves a globally diverse client base of mutual fund investors, high-networth individuals, pension funds, corporations, governments, and other institutions. Offerings exist across asset classes, geography, style, and channel. While maintaining strong investment performance, MLIM continues focusing

On the Job

on sales and profitability. MLIM recruits a small group of undergraduates for its developmental program. MLIM has two regional headquarters: Princeton, New Jersey, and London, England.

Day-to-Day Analyst Tasks • Provide research to portfolio managers • Work with portfolio teams to design investment strategies • Prepare competitive analysis and pricing comparisons • Prepare proposals and presentations for clients • Act as a resource for fund information • Maintain knowledge of current market conditions

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Research Although Merrill has an associate program in research, there aren’t as many opportunities here for trainees. A more common entry path is through experience in an industry that Merrill covers. It also helps to have a finance background. “You have to know your industry in the context of a financial market—making money in stocks.” “It’s always the unique person that goes into research,” says an insider. “It’s not

On the Job

as sexy as M&A. You have to be comfortable shutting your door and poring over documents. You’re a detective, a reporter, a journalist, and an analyst all at the same time.” This same insider suggests that research is a great place to start in investment banking, even though it’s not a common entry point. “You learn how to pick apart a company; how to identify bullshit from what’s real. Companies can package anything to look good. You have to read between the lines and digest information on a critical level. I don’t think you get the same level of analytical rigor if you start on the trading desk (for instance).”

Day-to-Day Tasks • Update financial models and pricing sheets • Conduct financial analysis and valuation on companies • Attend conference calls and contact companies directly for operational and financial information • Assist in developing and writing research reports

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Corporate Resources When considering a career in investment banking, these jobs are not to be overlooked—particularly if your personal life means as much to you as your career. While all Merrill people work hard, your chances of seeing daylight outside of work are better if you work in a Corporate Resources group than in the notoriously grueling GMI. Merrill recruits for training programs in technology, services and operations, accounting and finance, and human resources—all of

On the Job

which exist to support the activities of GMI, GPC, and MLIM. Insiders tell us these positions are unique in that they offer a bird’s-eye view of the entire firm—a valuable perspective you don’t get if you sign on directly with one of the three core business units.

Global Technology and Services Group Undergraduates are recruited to work with technology teams assigned to the firm’s three core business units, the corporate technology group, or infrastructure data services. Qualifications include a major in management information systems, computer science, or engineering—plus a technology-related or financial services internship or hands-on technical experience in Web programming, databases, or networking. “Even though I’m a software developer, I wanted to work in a financial company because I’m interested in learning more about the industry,” says an insider. “I’m a programmer, but I also have to deal with the business side. Our project manager isn’t always available. You have to have good communication skills.”

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Day-to-Day Tasks • Implement technology strategy in partnership with a business/division • Develop and support software applications • Create websites • Evaluate use and services of external vendors

Services and Operations Undergraduates are recruited to work in transaction processing and custody, which serves the firm’s institutional clients’ functions out of Jersey City, New Jersey, and provides support for the financial advisors of private client services.

On the Job

Once a trade has been executed, the transaction must be cleared and settled. Funds are processed, and dividends and interest are posted. Custody provides safekeeping for the assets of Merrill and its clients by recording security positions and ensuring that regulatory requirements are met. Custody also handles the transfer, re-registration, and delivery of physical security certificates.

Day-to-Day Tasks • Process, clear, and settle institutional trades and transactions • Service client assets and portfolios • Implement technology strategies • Improve processes

Accounting and Finance Undergraduates are recruited for work in the finance, corporate audit, risk management, and treasury departments of Merrill’s chief financial office, which manages the firm’s financial position. In this program, analysts are exposed to each of Merrill’s core business units.

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Of special note is a new business-finance associate program. It’s a small group with only three or four positions filled each year—but it’s a critical role. These are the folks who make acquisitions (and sell off what’s no longer needed) for Merrill’s core business units and who generally look for ways to build Merrill’s shareholder value. “They’re internal investment bankers. The client is Merrill Lynch rather than someone on the outside,” says an insider.

Day-to-Day Tasks • Prepare and analyze profit and loss statements • Construct pricing models • Prepare balance sheet reports

On the Job

• Price securities • Prepare monthly and quarterly reports • Conduct market share, trend, credit, and statistical analysis • Reconcile accounts

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The Workplace • Lifestyle and Hours • Culture • Workplace Diversity • Travel • Compensation, Vacation, and Perks The Workplace

• Civic Involvement • Training • Career Path • Insider Scoop

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Lifestyle and Hours The reward for working the insane hours of investment banking used to be the fast-lane lifestyle it afforded. However, in post–Henry Blodgett times, the image of high-flying bankers and research analysts tends to rub Merrill’s people the wrong way. The perks you can count on at Merrill might best be described as practical rather than plum: Merrill will buy you dinner if you’re at the office after 7 p.m., and for those late nights you put in, you’ll get a free ride home. “My average day is 9 a.m. to 9:30 or 10 p.m. and sometimes midnight, plus 1 full day on the weekend. I was here until 2 a.m. 1 day this week,” says an insider. Expect to put the interests of your clients before your own, regardless of the department you join. In investment banking, that means spending your vacations listening to voice mail and hardly ever planning a weekend in advance.

The Workplace

If you have a sales or trading position, the market will rule your schedule. You’ll arrive and leave earlier than your I-banking counterparts, logging roughly 60hour weeks. You’ll also have very little weekend work. As one trader says, “It’s more or less a 5-day-a-week job. The fact that I don’t work weekends is one of the reasons I chose this division, although I wouldn’t have said that in an interview. It will take a while for the enlightened view of work/life balance to permeate some of the hard-nosed recruiters.” Insiders in Private Client, MLIM, and Corporate Services often work a more traditional workweek of 45 to 55 hours. “I wouldn’t call it a 9-to-5 job, but it’s manageable,” says one insider. Regardless of which business unit you join, insiders say that your hours are really determined by the culture of your specific group. While we hear that face time is rarely required, if your boss

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arrives early, stays late, and works weekends— chances are you will, too. Going out to lunch? What’s that? Most insiders say they eat at their desks. After work, it’s a different story. While those with spouses and families tend to go home after hours, there’s usually a group of younger singles willing to go

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If you’ve come just for the money, you’re making a mistake. You have to want to do this type of work.

out for a bite and a brew. One insider reports that it was her coworkers who made her feel at home when she was first assigned to an office in a city where she didn’t know anyone. In terms of organized extracurriculars, Merrill has its share of basketball and softball teams. Apparel at Merrill depends largely on office location, but the general rule is suits for client contact and business casual for inside the office. “We have casual Fridays, which means a blue shirt rather than white. You don’t see denim anywhere,” says an insider in Houston.

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Culture Team-oriented, collegial, ethical. We hear these terms repeatedly when talking with insiders. “The people here tend to be down-to-earth and well-rounded,” says one insider. Indeed, Merrill is staffed with a lot of hard-working, wellmeaning, smart people who seem to believe they can make Wall Street a better place through their hard work. “There’s a huge emphasis on integrity and ideals: Work hard and do everything aboveboard. Put the client first. If you embrace those ideals, you’ll get along pretty well,” says an insider. “I love to work hard and push myself, but if the person next to me is surfing the Internet all day, it puts me in a bad mood. There’s no one in my group that does that.” However, the restructuring process of the last 2 years has taken a toll on morale.

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“In the last 6 months [first half of 2004] there’s been a huge number of people leaving,” says another insider. “Just this week two very senior people have announced they’re retiring. They’re 50 and could probably retire on what they’ve earned. But so many seem to wind up somewhere else 6 months down the line. There is turnover at every level. It seems that a lot of other firms are hiring away, and Merrill is not hiring as many in.” But many analysts and associates are quick to point out that Merrill’s leaner structure provides an opportunity to do more and to learn faster. “I wanted to work in a fast-paced environment, and Merrill Lynch provided it,” says an insider. Some analysts expressed surprise at the importance of the assignments they were entrusted with. “Nobody seemed to realize that I was just out of school. It was 10 weeks of training and then right into the fire,” says one.

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“Associates and analysts are getting more challenging assignments,” confirms a Merrill recruiter. “Because of thinner management, the opportunities are very different from those of the past.” The same is true of summer internships. It’s unlikely that you’ll be a coffee kid at Merrill. “With the new leaner business, summer analysts do important work and are essential to the managers,” says a recruiter. “They are the future of Merrill.”

Workplace Diversity At Merrill, teamwork is required on a global scale. New York may be headquarters, but a lot of the action happens in London, Hong Kong, and Singapore. “In training, you may think that they stress the importance of teams more than

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necessary; but once you’re on the job, you really do have to work with a wide variety of people in a wide variety of countries.” Merrill’s size makes it more representative of the U.S. population than many of its smaller competitors. The firm has a formal affirmative action plan and a stated commitment to increase diversity in the workplace, as well as a Black Employee Network and a Hispanic Employee Network to help minority employees share success strategies and develop mutually supportive work relationships. And, of course, don’t forget that President and CEO Stan O’Neal is an African-American and was recently named the “Most Powerful Black Executive” by Fortune.

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Opportunities for Women According to the Securities Industry Association that surveyed Merrill along with 43 other firms, the percentage of women on Wall Street is declining. Women hold only 15 percent of the industry’s top jobs, and women make up 37 percent of the overall workforce. On the positive side, women now hold 17 percent of the managing director positions, up from 13 percent in 2001. Inside Merrill, we hear that the number of women has increased recently. “I have to tip my hat to Merrill Lynch—when I started 2 years ago, there was a definite shortage,” says a female insider. “In the past 18 months somebody must have said something. It’s remarkable what’s been done. For the first time ever, they had a dinner with every female working in investment banking. You didn’t know how many there were until you saw all of us together.” Also this year, Merrill sponsored a key road show to recruit women from Columbia, Wharton, and the University of Chicago. The number of women is largest at the analyst and associate levels. To increase

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promotion opportunities for this group, Merrill sponsors the Women’s Network, a group of female professionals who organize panel discussions and advocate networking. The group also hosts various receptions throughout the year and seeks to provide junior professionals with female role models. While the rigors of investment banking render family life next to impossible, insiders at Merrill tell us working moms can find opportunities within the firm that are more hospitable than others to their parenting roles. They point to benefits available such as paid childcare leave, adoption assistance, and childcare assistance, including reimbursement for expenses incurred because of business travel. Meanwhile, Merrill is dealing with some baggage from its past. In April 2004, a panel of arbitrators awarded $2.2 million to a female stockbroker who claims

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her supervisor in San Antonio harassed her in the 1990s. There are about 40 additional stockbrokers standing in line with discrimination claims as well. Merrill’s position is that the firm is a much different place today—harassment is not tolerated.

Travel The amount you travel depends on your position. I-bankers tend to travel more than their counterparts in other groups. “I travel maybe 8 to 10 days a month. Some weeks I’m gone all week and sometimes it spills over into the weekends,” says an investment banking associate. “It depends on the group and the work ethic of your client. One client wanted the

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group onsite for 3 weeks straight (without a return on the weekends), but otherwise it’s rare that I stay over a full weekend. I may have to travel on a weekend day.” Travel increases with longevity and promotion to banking officer. “This job shifts pretty dramatically from associate to vice president,” says an I-banking insider. “As vice president, you become responsible for developing client relationships. You have to delegate more of the analytics to associates while you get more involved in the client relationships. That means more travel.”

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Compensation, Vacation, and Perks After a dark couple of years, there is light at the end of the tunnel. Industrywide compensation is expected to increase 15 to 20 percent in 2004. At this rate it will take a while before salaries return to the high-flying days of 2000 when the average pay range for MBAs was $130,000 to $210,000. (By 2002 this range had shrunk to $100,000 to $150,000.) But as we go to press, Merrill insiders are looking forward to a strong bonus season based on the firm’s 2003 results—particularly from its success in fixed-income trading. For 2004, starting salaries for analysts will be either $50,000 or $55,000 (depending on the particular training program entered), with a signing bonus of $8,000 to $10,000. MBAs and other holders of advanced degrees start at $80,000 or $85,000,

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with a signing bonus of $20,000 to $25,000, and may qualify for a relocation allowance. Bonuses are an incentive payment and can vary greatly based on performance—the firm’s, your department’s, and your own. The firm may pay stub-year bonuses, but the amount is discretionary rather than stated at hire. Analysts and associates receive 3 weeks of paid vacation. It’s often difficult to schedule back-to-back weeks, and many people find that demanding workloads make it hard to take their full allotment. When you do go on vacation, you’re expected to check your voice mail on a regular basis and return the really urgent calls. On the other hand, insiders report that Merrill pays for your cell phone and provides a subsidized gym membership, and when clients aren’t using the firm’s boxes at Madison Square Garden and Yankee Stadium, the analysts get the tickets. Merrill provides a top-flight benefits program, and in particular, the health-care program is excellent.

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Civic Involvement Merrill Lynch gives generously to charitable causes. Through the Merrill Lynch & Co. Foundation, the firm offers sizable grants in support of education (which receives the largest share), the arts, the environment, human services, healthcare organizations, hospitals, and civic groups. Merrill will match your charitable contributions up to $1,500 a year, and Merrill encourages employees to volunteer for programs such as the United Way, City Meals on Wheels, and the Have a Heart campaign. In New York, Merrill participates in “Principal for a Day,” a program that places senior executives in New York schools to talk with students and teachers. Most of the associate and analyst training programs schedule 1 day for a community involvement project, such as a playground cleanup or a school painting. Every Christmas season, Merrill opens its offices and phone lines for senior

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citizens to make free long-distance calls to loved ones. Even in 2001, when the company was rebounding from 9/11 displacement, it held the Christmas Calls program in 75 offices for 21,000 senior citizens.

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Training When you first join Merrill, you’ll most likely attend a 2-day firm-wide orientation in New York to acquaint you with the firm and its key strategies and products and to cover legal and ethical issues in the financial services industry. After the orientation you will participate in a 1-day community service project. Next is core institutional training (3 weeks for analysts; 7 days for associates) that includes an overview of the financial markets and training in Merrill business processes and technology. “They stretch you and it’s fast-paced, but it’s not a crash course,” says an analyst. This insider contrasted the experience with that of friends at other banks, where training was shorter and more stressful. “At Merrill you have time to absorb things. We had weekends off. I had time to fix up my apartment and to get to

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know my neighborhood.” Subsequent training depends on what business unit you’re hired into (there are nine programs for analysts and seven for associates). For analysts in corporate resources, group assignments are made at what Merrill calls Recruiter Days. “It’s like 8-minute dating,” says an insider. “You meet briefly with each group and afterward put in a bid for your top three choices. The groups do the same and hopefully there will be at least one mutual match between a group and a trainee.” In accounting and finance, where the training is rotational, the process is repeated for each rotation. In areas where securities licensing is required, such as the trading desks and I-banking, training includes a simulation of the working environment and preparation for the Series 7 and 63 exams. In Private Client, you’ll prepare for

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your Series 66 and the Certified Financial Manager Exam, if needed for your assigned role. Thereafter the training is structured around your day-to-day tasks. Each of the core businesses now has 2-year development programs that help extend the collegial climate of training into full-time assignment. Through cocktail receptions and forums for speakers, you can continue to network with members of your training class. “A lot of money is going into this,” reports a recruiter. “It’s hard to find exceptional talent. When we recruit them we want to keep them.” Through Merrill Lynch University, all staff members have access to online training—including courses designed for the business to which they’re assigned, as well as to the firm’s other businesses. The firm also pays for an online training course to prepare for the GMAT and pays for the books.

Training Opportunities for Undergraduates Merrill Lynch recruits for nine analyst training programs:

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1. Debt, equity, and global relationship management 2. Investment banking 3. Private client 4. Credit 5. Investment management 6. Technology 7. Services and operations 8. Acccounting and finance 9. Human resources

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Summer Program for Analysts Analysts are recruited for a 10- to 12-week summer program within one of the eight training programs between their junior and senior years. This program is a get-to-know-you period for both the student and Merrill, and it is the primary recruiting source for the full-time class of analysts after graduation.

Training Opportunities for MBAs Merrill Lynch recruits for seven associate training programs: 1. Debt markets 2. Equity markets 3. Investment banking 4. Private client

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5. Private wealth 6. Research 7. Business finance

Summer Program for Associates Summer associates are hired for 10 or 12 weeks (the length is at the associate’s choice) during the summer between the first and second year of business school. Depending on the program, your assignment may or may not be rotational. In debt and equity markets for instance, you might do two to four rotations of 2 to 4 weeks each. In I-banking, you are placed in one particular industry or product group. Merrill plans carefully for its summer program to assure it can offer each summer associate a full-time position if he or she has performed well. The summer program is an important entry point to a career in financial services.

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Career Path At Merrill, you’re responsible for your own career progression. The firm makes an extensive investment in training and wants to retain its best and brightest. It strives to place people in positions and business units where they will be most successful, and it also provides plenty of networking and opportunities to understand what life is like in other areas of the business. To ease entry into the huge organization, new analysts and associates are paired with mentors, both peer and those a couple steps higher up the rung. These mentors are key contacts for discussing career strategies. We hear that Merrill managers are an open and approachable lot, and quite proactive about career progression and advancement. “I’ve had my boss say to me, ‘You’re at the time of your career where you should make a decision. I want you here for the rest of your career, but what do you want?’” says one

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insider. “I’d feel very comfortable going to my director to say, ‘I’m sick of my job.’ I don’t think every firm is like that. As soon as you give them the hint you’re unhappy, [other firms] stop looking out for you. Here, if you want to experience something new, the firm will support you if they like your work.” Merrill posts all its job openings; however, insiders report that it can be tough to move around. When the market was at its worst, an insider reported, “People are hanging onto their jobs and not ruffling any feathers in these really hard economic times.” And now that more opportunities exist, it’s not always easy to approach a busy manager about making a move. “He’s invested in your training and doesn’t want to have to start over with someone else.” “Adding value to the business means not only doing what is expected, but doing more,” says an insider. “That’s how you get noticed.”

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Opportunities for Undergraduates Like most investment banks, Merrill’s analyst program for investment banking is structured as a 2-year program, with the possibility of a third year at the firm’s request. Analysts who perform at an outstanding level may be offered the position of associate after their third year without having attended graduate school. More frequently, after 2 years analysts head to grad school, usually business school, and then back to Merrill—or some other investment bank. After 2 years spent working long hours, others decide that investment banking isn’t for them and wind up working for former clients or abandoning finance altogether. Analysts in other groups (Global Markets, Private Client, MLIM, technology, services and operations, accounting and finance) have a more open-ended career path. Undergraduates join in a position in one of these areas without the need to attend graduate school (at least not for a few years—and then generally because you choose to, not because you must in order to advance).

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“It’s a meritocracy. Every time I do a good job, my manager makes sure to tell me it was a great job. When improvement is needed it also happens,” says an insider.

Summer Analyst Program For undergraduates looking for 2 months of banking experience and an instantly recognizable name to put on their resume, Merrill hires 250 to 300 university juniors to intern. Recruiting takes place on campus beginning in January with offers made by the end of February. Summer is the primary route to a full-time position for undergrads. Offers for full-time training positions are made to successful summer interns by March of their senior year, and the program begins in June.

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Opportunities for MBAs Merrill Lynch hires MBAs in debt, equity, investment banking, private client, research, and accounting and finance (chief financial office). Merrill recently introduced a new associate opportunity in business finance described by insiders as an internal investment banker with Merrill as the client.

Summer Associate Program There are 10- to 12-week summer associate programs for business school students who have finished their first year. Merrill hires 100 to 120 summer associates in the United States. Recruiting takes place on campus beginning in January with offers made by the end of February. As with most summer internships, this is your chance to prove what a splendid addition you’d be and to nail down an offer before the second-year recruiting craziness begins. Major tip: The summer intern program is Merrill’s primary source for its fulltime associate program.

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International Opportunities With offices in 35 countries outside the United States, Merrill has one of the biggest global footprints in the industry. Merrill’s strategy is to make local hires when possible. Recruiters say they’re excited about a new associate training program in China. Though small (ten participants), the idea is to build a cadre of individuals who can work in all three of Merrill’s core business units in China. If you seek employment with Merrill outside the United States consider London—insiders say its associate training program is particularly robust. Networking is important at a firm the size of Merrill Lynch. There’s nothing wrong with earning your stripes in the Seoul office, but if your long-term goal is to settle in New York, it’s wise to start building relationships early on with the key people at headquarters. One insider says, “To be successful in the bank, you

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have to develop a reputation as the go-to guy. This requires that you develop a network within the company, and if you’re based in Europe or Asia, you have to realize that your network needs to extend overseas—and especially to New York.”

Insider Scoop What Employees Really Like Love Fest Insiders tell us repeatedly that Merrill people are the best. “I’d always heard you had to like the people you work with, and I didn’t really take it to heart until I

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came here,” says an analyst. “The people that I work with are receptive and open about answering questions.” Another insider adds, “People who work here love the firm and want to make it a better place. That’s very apparent on a day-to-day basis.” That sentiment seems to flow both ways. Merrill cares about its people and treats them with respect. One insider says one reason she accepted Merrill’s offer was because she was impressed that a managing director and vice president took the time to conduct her interview: “I’d interviewed with other banks, and it was sometimes with a second-year analyst.”

Live and Let Live According to insiders, Merrill Lynch is less conformist than other investment banks. Image and behavior are not as prescribed as they are in some more traditional firms on the Street. “Individuality is tolerated at Merrill. It doesn’t

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look like a Grateful Dead concert, but there are people from different backgrounds,” says one associate, who adds that Merrill gives him more stretching room than he’d expect at another firm. Another insider says, “Merrill is more accepting of different skills and attributes. The firm is happy to let you rotate for a while and, to some extent, give you a second chance if a particular group doesn’t fit. At other firms on the Street, it’s sink or swim from day one.”

Straight Arrow The word “integrity” could easily be spelled “Merrill.” Merrill’s good name may have been tarnished by the likes of former employees Henry Blodgett and Phua Young, but insiders are adamant that Merrill does not deserve a bad rap from the media. “I talked to other banks before and after I came here, and Merrill continues to impress me the most,” says one insider. “Merrill is one of the most ethical firms on Wall Street.”

Around the World in 80 Days Though there’s been some retrenchment of former Chairman Dave Komansky’s

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global expansion as Merrill tightens its belt, it’s still a significant global operation with offices in 35 countries. Employees, whether they’re based in New York, London, Hong Kong, or Singapore, can definitely feel the long arms of Merrill Lynch stretched out around the globe. “The trends are very real,” says one insider. “It’s really a global business,” says another, adding, “The ties among offices are becoming stronger and stronger.” Some insiders are excited by the interaction of cultures and style in the pursuit of common goals. Says one overseas insider, “You get the strong points of the U.S. office—the dynamism, work ethic, and technical competency—with the cool cultural aspect of Europe. It’s a good mix.”

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Watch Out! Who’s on First? Even though Merrill’s streamlining efforts have removed a layer of management and consolidated groups and processes, there are still a lot of people involved in decisions. “There is so much reorganization going on that it creates inefficiencies within the system,” says one insider. “Being new, it’s somewhat amusing, but if you’re here a long time it gets frustrating.” But as one insider puts it, “The change is part of the learning experience. You learn to manage change.”

The Cutting Edge Merrill has undergone massive change during the last 3 years. Consolidation, cost cutting, focus on profitability . . . call it what you like. The bottom line is that people at Merrill are now expected to do more with less. “With the way our business has changed, people have to be more creative in how we bring value to our clients. The traditional way of doing business has changed,” says an insider. “You also have to be a lot more efficient. You have to be agile.

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Everyone is pressed. There are not as many people to help you do your job.” Insiders report there is both an up and downside to being on an accelerated learning track. “You’re given the opportunity to step up to a larger role,” says another insider who reports that associates can find themselves performing the role of vice president (and analysts doing the work of associates), without the official title to back it up. “If you’re calling a managing director on a deal, you don’t get as much traction with your associate title.”

Big Pond, Little Fish Because Merrill is such a big place, it isn’t always easy to make sure staff is properly utilized. “There are so many opportunities for transferring to a different department or job,” says an insider. “It’s harder than it should be. It’s

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tough for departments to talk to people and find the best place for someone to work. There are some very talented people who should be doing something else.” It helps to remember that it’s expected that you’ll be proactive about your career at Merrill. If you need help making a transfer, it’s up to you to ask your mentor or your manager.

Well-Defined Career Path Merrill Lynch has a clear career path, which is a good thing for some, but may frustrate others. “You may perform at a certain level, but you still have to work as an associate for 3 years before you get promoted to VP. They don’t bend on that one,” says an insider. “It’s good because it gives you a couple of years to develop. If you start off slower than others do, you can catch up. On the other hand, if you’re working at a pretty high level, you don’t get recognized for it.”

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Getting Hired • The Recruiting Process • On-the-Record Recruiter Interview • Interviewing Tips • Grilling Your Interviewer

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The Recruiting Process Merrill Lynch has an extensive on-campus recruiting program; your first step should be to attend its presentation. If your school isn’t on the list, get the contact information for your school’s alumni who work at Merrill Lynch. Start calling them in August or September to arrange an initial meeting. With any luck, they’ll refer you to the recruiting department, and you’ll be in the running for an interview. On campus, recruiting for both undergraduates and MBAs is similar: a round (two rounds for associate positions) of on-campus screening interviews, usually in October, followed by one or two additional rounds in New York. During your final round, be prepared for Preference Day, a grueling trial at the company where you “chat” with six to ten people over the course of a day. Most offers go out in the fall.

Undergraduates Merrill continues to rely on a healthy influx of new analysts every year—the number varies based on departmental requirements. In 2004–05, Merrill expects to hire about 250 undergraduates for positions in investment banking, debt and equity markets, Private Client, MLIM, technology, and corporate administration.

Getting Hired

Merrill encourages undergraduates with a range of degrees to apply, not just those with finance or accounting backgrounds.

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MBAs In 2004–05, the firm expects to hire about 90 people for full-time associate positions in debt and equity markets, investment banking, Private Client, and corporate administration. Merrill looks for both previous financial experience and a good personality fit. Interviews are usually held in October and normally include both financial questions and general discussion about you and your background. Recruiters tell us that an MBA’s GMAT score is also important.

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The most important quality is the ability to work in teams. We need to have people who can perform at all levels of a team organization.

Advanced-Degree Candidates While Merrill has hired MBAs from outside traditional MBA programs in the past, it has increasingly begun to look for advanced-degree hires at the associate level. JD candidates, PhDs in engineering with skill sets and traits suited for the equity and debt desks, and other PhDs with an interest in finance and skills that would complement Merrill’s business are encouraged to apply.

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On-the-Record Recruiter Interview We designed the on-the-record recruiter interview to get you inside the recruiter’s head and answer the questions you need answered to ace your interviews.

What do you look for in candidates’ resumes? While a resume is important, what we are really looking at is the whole person. Your potential to perform in an extraordinary fashion matters to us, and that may not be evident on your resume. We want to understand both what you are capable of and what your past performance has been. That is why we spend time getting to know you through the recruiting process. We are looking to build relationships, as well as create a thorough and engaging interview process. We are not seeking a single type of candidate. We are focused on hiring people who have a proven track record of extraordinary performance. We look for people who are committed to making a difference with clients and colleagues from the first days of their careers. Our people come from a great variety of backgrounds, from a host of schools, from around the globe. We find that if we are too specific about resume attributes or professional experiences, it can

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shut the door on talented individuals. We believe it is the diversity of perspectives and backgrounds that makes Merrill Lynch a compelling place to work and makes our teams effective with clients. A rigorous academic background is important—often showing depth in areas like finance, economics, and analytical thinking. But there are gifted people who

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are psychology or history majors with highly analytical minds, who can be both detail-oriented and strategic in their approach to problem solving. You do not have to have an applied mathematics degree from Harvard to succeed as a banker, but a gift for learning and a great capacity for doing are critical. The resume can be valuable in conveying a preliminary fact pattern, so things like competitive schools, challenging academic course work, and demanding prior jobs are meaningful. But we recruit at a broad spectrum of schools around the world, and in our search for bright minds and extraordinary potential we look for representation from every quarter. There are certainly students at the best-ranked schools who may not be as gifted as those who have cut their own paths. We dig underneath in our recruiting and interviewing to award appropriate credit for evidence of true achievement. Whether you make your own way or have the privilege of a well-known school, we expect you to demonstrate that you are willing to work hard and deliver results consistently. We are looking only for those with a great sense of discipline and drive. We want people who enjoy working hard in a spirit of partnership with others.

What are immediate turn-offs on a resume? An inconsistent career record. If you have jumped around in a bunch of jobs that do not seem to have a through line, and you cannot establish that you have been building up a series of related blocks in a career path, that would raise questions. On the other hand, it is good if you can show us how a seemingly

Getting Hired

unrelated series of experiences was enriching. We welcome a candidate who has developed expanded horizons, as long as there is sense to it. It is important to present a clear logic in your career choices. You must show an ongoing record of superior performance both academically and professionally.

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Naturally it is helpful to evidence a clear love of finance and markets. If you do not have a strong interest in finance you will have a hard time explaining why you should work at Merrill Lynch.

How do you decide whether a candidate advances in the interviewing process? Our process is not rigid. While it is a disciplined approach, we do not have 12 questions that we ask every candidate. We make decisions by probing someone’s ability to solve problems and by asking her to demonstrate through her record that she can perform under pressure with calm, creativity, and focus. We look for results. We believe in letting people be open in the interview process to reveal how they work and how they think. We like people to tell us about the experiences they think are most relevant to demonstrate their capacity for hard work.

What’s the biggest mistake a candidate can make in an interview? Believing that there is one kind of person we look for or one kind of answer that will get you the job. We want you to be open and direct about your experience. Candor, confidence, and focus are hallmarks of our people. We look for that in recruits. This is not about judging who you are as a person. It is about understanding what you care about, what you’re accomplished at, and what you have the potential to be good at.

Getting Hired

What’s the best way to break into the interview cycle if you’re not on campus? You can submit a resume online, or establish connections with people in the business. Alumni networking is often effective if you are at a school where we do not actively recruit on campus.

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What’s the most effective way for a candidate to follow up after an interview? E-mail is the most efficient, and it is pretty uniformly acceptable. A personal thank-you note is nice, but there is a speed and ease of reply with e-mail. Do keep in mind, however, that people get a lot of emails. Keep it short and thoughtful. A message that reads, “I’d really like to book an hour to learn your views on the state of the markets and your industry,” probably isn’t an effective way to manage your career process. Be focused in your communication with people on Wall Street.

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We want people who are logical thinkers, but not rote thinkers. We want people who can look at disparate data or unclear information and come up with cogent, creative, relevant solutions for clients.

There is a theme worth exploring a little more here. For candidates looking to advance long-term, it is important to develop a relationship of trust and respect with future colleagues. We try, given the demands on our people, to develop relationships with candidates. This is a business built on relationships. It is a pattern to establish in the recruiting process. Use people’s time wisely. Share insights as you seek counsel. Engage people with ideas as well as sheer enthusiasm.

What are the qualities necessary for success in your firm? Drive, self-discipline, quantitative and analytical ability. Integrity. The ability to work well with others. There are also some critical qualities that are more

Getting Hired

difficult to show on a resume, things like judgment. We want people who are logical thinkers, but not rote thinkers. We want people who can look at disparate data or unclear information and come up with cogent, creative, relevant solutions for clients.

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At Merrill Lynch, what sets us apart are our people and the way we interact with each other. Performance matters. Results count. Integrity is vital. Putting the needs of clients and the team first is paramount. Industry-wide, we are all competing based on delivering bright ideas. So it is the quality of our people’s minds, our speed and efficiency, and our collaborative ability to create actionable solutions that differentiate us from the pack. We want to invite people into the firm whose values, discipline, and ideas set them

Getting Hired

apart, so that together we can make a difference in the markets and with clients.

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Interviewing Tips 1. Be ready to present a convincing story about why you want to work for Merrill rather than another leading investment bank. You’ll almost certainly get this question, but even if you don’t, knowing what makes Merrill great— both for you and the global investment community—will make you a far more convincing candidate. 2. Be prepared to demonstrate that you can handle the workload at an investment bank. Talk about the weekends you spent painstakingly completing research in the chemistry lab. Remember, because you’ll be working on teams, the weight you don’t carry will fall on someone else’s shoulders. Your interviewer will ding you if he smells a slacker. 3. Be humble. Merrill is proud of its reputation for being a down-to-earth type of organization. Many of its top executives started as lowly stockbrokers in local offices around the country. Although it recruits at the nation’s top schools, a shiny pedigree isn’t an automatic “in.” Therefore, comments along the lines of “It’s true because I said so, and I went to Harvard” are to be avoided. On a sartorial level, save the Hermes tie or really expensive scarf for your interviews elsewhere. 4. Show you’re in it for the long haul. For many years, Merrill was womb

Getting Hired

to tomb. Many senior executives started here and spent their careers with the firm. Although you don’t need to commit in your first interview to working here for the next 50 years, even a small indication that you’re likely to bounce from firm to firm in search of the best salary or the most interesting work can be a very big strike against you.

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5. If you opt for trading or sales, show you can sell. You’ll be evaluated for your ability to sell, and an interviewer may ask you to sell him or her something. This could be a financial instrument or it could be Merrill itself. (Or it could be the simple tie you sensibly chose for this interview.) Practice your sales pitch on a roommate or friend before you get to the interview room. You might also think of examples from your past where you’ve used your skills of persuasion with great success. 6. If you’re looking at investment banking or research, know what’s going on in the markets. Your interviewer will probably ask you about any stocks you follow (and plenty you don’t follow that are in the news) or about the rationale behind the latest billion-dollar merger to hit the press. At a minimum, you should demonstrate a lot of interest in the world of finance. 7. Follow up. After enduring an energy-sapping interview marathon, the last thing you’re going to want to do is hit the keyboard. But you have to. Write to as many of the interviewers you met as possible, because when they sit down to choose next year’s roster, you definitely want them to be able to

Getting Hired

put a name to your face.

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Grilling Your Interviewer This is your chance to turn the tables and find out what you personally want to know about Merrill Lynch. We strongly encourage you to spend time preparing questions of your own. In the meantime, the following sample questions should get you started. “Rare” questions are meant to be boring and innocuous, while those in the “Well Done” section will help you put the fire to your interviewer’s feet. But beware: They may also turn you to toast!

Rare • What sort of mentorship and professional development programs are there at Merrill? How does Merrill ensure that people take advantage of these programs? • Why did you decide to join Merrill Lynch? • What are the biggest challenges day-to-day in working at a firm Merrill’s size? • Which firms do you consider to be Merrill’s primary competitors, and what are Merrill’s competitive strengths relative to them?

Medium • Given Merrill’s size, how do new recruits get the senior-level attention that can be so critical to career development?

Getting Hired

• What will Merrill’s revenue mix between international and domestic look like in 2 years, and what is the strategy to achieve growth? • How effective are Merrill’s efforts to create equal opportunities for women and minorities? How does Merrill measure its success? • How important are contacts within Merrill for charting career success, and what formal programs enable people to set up professional networks that will ensure their long-term success?

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Well Done • Under what conditions would a merger or the acquisition by another firm be too tempting to turn down? • How is the firm addressing the growing competitive challenge from commercial banks? • How successful do you think Merrill has been in managing the inherent conflict of interest between research analysts and investment bankers? • What is the firm’s position on its full-service equity business model when other firms, like Goldman, seem to find it no longer sustainable?

Getting Hired

• How is the firm responding to pressures to reduce and restructure trading fees?

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For Your Reference

For Your Reference • Recommended Reading • For Further Study • Key Numbers and People

77

For Your Reference

Recommended Reading “Putting the Muscle Back in the Bull” During Stan O’Neal’s first 3 years running Merrill, he’s been depicted as ruthless in the way he cut jobs, closed field offices, fired or demoted executives, and froze pay. In this account, the author offers a different label for the CEO: turnaround genius. He credits O’Neal with saving a flabby Merrill from slaughter, and writes that in addition to the $4 billion in 2003 earnings, “Merrill is bringing in more money per broker than any of its competitors. The investment banking arm earned more from fees last year than Goldman Sachs or Citigroup.” The article tells an entertaining story of O’Neal’s overhaul and talks about what may happen next now that Merrill is again focused on growth. Source: David Rynecki, Fortune, 4/5/04.

“Merrill Lynch Ordered to Pay for Sexual Bias” In April 2004 the tab increased for a class action case that has cost Merrill more than $100 million in settlements. A panel of arbitrators awarded $2.2 million to E. Hydie Sumner—a female stockbroker who claims that her supervisor in San Antonio harassed her and other women and minorities during the period of 1990–97. The panel ruled that Merrill systematically discriminated against female employees of its national brokerage business. The decision is significant because not only could it help the unsettled cases of another 40 individuals, but it’s also the only official finding of discrimination that has been made about a major Wall Street firm. A larger sum was awarded to a Smith Barney employee in 2002, but that case did not involve a finding of firm-wide discrimination. A separate case against Morgan Stanley goes to trial later in 2004. Source: Patrick McGeehan, New York Times, 4/21/04.

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For Your Reference

“Merrill Tumbles in Convertible Bond Sales after O’Neal’s Purge” Merrill Lynch, once the top underwriter of convertible bond sales, dropped to fifth in U.S. sales for 2003. This report attributes the slippage to Merrill’s reorganization by CEO Stan O’Neal. Among the executives who departed Merrill are Thomas Patrick, who created the firm’s first convertible product in the 1980s, and three others who were key to Merrill’s convertible success. Some of the former Merrill staffers and much of its convertible business went to competitors Goldman Sachs and Morgan Stanley. Merrill contends that it chose not to pursue convertible deals unless they met profit targets or enhanced longterm client relationships. The article quotes an official spokesperson as saying, “Merrill Lynch’s goal has been to be a top-three player in the broader global equity and equity-linked products category—and we are. We are one of the leading players in the equity-linked market and consider convertibles to be an important slice—but only one slice—of that market.” Source: Brett Cole, Bloomberg, 3/15/04.

“A Derivative Gets a Deal Done” When Boston Private Financial Holdings Inc. went to the equity market to raise $37 million to buy an investment firm, it wanted to take advantage of a favorable valuation to raise more money than needed for the immediate purchase, to sock away the money for future acquisitions. The only problem was that the company would have to carry the extra proceeds on its balance sheet, diluting earnings. Merrill Lynch bankers suggested an equity forward deal in which Merrill would borrow shares in the stock loan market and add them to the stock offering. Boston Private would receive cash and provide Merrill with shares gradually over the next year. This type of deal was created by the derivatives experts Merrill assigned to its equity capital markets unit a few years ago. A much larger equity forward contract was used in 2003 by Bank of New York when it purchased Credit

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For Your Reference

Suisse First Boston’s Pershing unit. Merrill’s head of corporate derivatives origination, Dar Maanavi, suggested that equity forwards might become a standard feature in equity deals, but others in the industry express a concern about risk to the underwriter. Source: Laura Santini, Investment Dealers’ Digest, 1/19/04.

“Do the New Rules Matter?” This article discusses the changing role of the research analyst in investment banking. The author sums up the inherent conflict of interest when he quotes Mark Foletta, CFO of a San Diego pharmaceutical company, Amylin: “If an analyst is negative on you, you are not going to hand their bank a significant role in your stock issuance, that’s for sure.” The new regulations prevent analysts from receiving investment banking profits and owning stock in the companies they cover; bankers can’t have approval authority over research reports; and analysts are banned from sales meetings with and road shows for banking clients. Some experts believe the new regulations will fail and raise questions around the level of research that Wall Street will support in the future. Source: Ian Springsteel, Investment Dealers’ Digest, 3/10/03.

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For Your Reference

For Further Study Merrill Online (www.ml.com) Merrill has a comprehensive and well-organized website, which you should explore before interviewing. The career section includes recruiting information for undergraduates and MBAs, including opportunities for training, qualifications necessary, geographic location, and placement within the Merrill organization.

Killer Investment Banking Resumes This comprehensive WetFeet Insider Guide will help you land an interview in investment banking. We’ll teach you everything you need to know about how to write your resume and cover letter, who you should be thinking about approaching, and how to impress your recruiters. In this book, we examine real resumes from real people to show you how cover letters and resumes are used in the I-banking recruiting process, pass on industry insiders’ best tips for resume formatting and content, let you in on what recruiters are looking for, and keep your resume out of the circular file.

Beat the Street: Investment Banking Interviews Turn to this WetFeet Insider Guide for an in-depth description of the I-banking interview process, including tips for acing interviews in corporate finance, research, sales, and trading. The career experts at WetFeet talked to recruiters, new hires, and senior bankers at the leading investment banking firms to answer all your questions about interviews—from information sessions to the final interview to the offer. You’ll get the skinny on how to prepare (our three Rs: research, rehearse, review) as well as a variety of Q&A worksheets, detailed advice for impressing your interviewer, and a ton of useful—and often surprising—tips from Wall Street insiders.

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For Your Reference

Key Numbers and People 

Merrill Lynch Financial Highlights 2003

2002

2001

2000

20,154

18,627

21,879

26,766

Net earnings before taxes ($M)

5,649

3,757

1,377

5,717

Net earnings after taxes ($M)

3,988

2,513

573

3,784

27,651

22,875

20,008

18,304

Return on avg. stockholder equity (%)

16.1

11.7

2.7

24.2

Earnings per share, diluted ($)

4.05

2.63

0.57

4.11

Dividends per common share ($)

0.64

0.64

0.64

0.61

Book value per common share ($)

28.66

25.69

23.03

21.95

Net revenue ($M)

Stockholder equity ($M)

Source: Merrill Lynch 2003 Annual Report.

Management Team E. Stanley O’Neal, chairman, CEO, and president Rosemary T. Berkery, EVP and general counsel Ahmass L. Fakahany, EVP and CFO Gregory J. Fleming, EVP and president, Global Markets & Investment Banking Dow Kim, EVP and president, Global Markets & Investment Banking Robert J. McCann, EVP and vice chairman, Wealth Management Group James P. Gorman, EVP and president, Global Private Client Robert C. Doll, SVP, president, and CIO, Merrill Lynch Investment Managers

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For Your Reference

Recruiting Contacts MBA Programs Research; Global Markets Alison Conti 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080 Investment Banking Helen Cressey 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080 Private Client; Private Wealth Camilla King-Lewis 800 Scudders Mill Road, Section 2A Plainsboro, NY 08536 Business Finance Katie Volz 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080

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For Your Reference

BA Programs Global Markets Alison Conti 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080 Investment Banking Elizabeth Jordan 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080 Private Client Camilla King-Lewis 800 Scudders Mill Road, Section 2A Plainsboro, NY 08536 Credit Ken DaPonte 800 Scudders Mill Road, Section 2A Plainsboro, NY 08536 Investment Management Susan E. O’Leary, Ken DaPonte 800 Scudders Mill Road, Section 2A Plainsboro, NY 08536

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For Your Reference

Operations Kristin Freas 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080 Ken DaPonte 800 Scudders Mill Road, Section 2A Plainsboro, NY 08536 Technology Valerie Berger 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080 Finance and Accounting Katie Volz 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080 Human Resources Danielle Doctor 4 World Financial Center 250 Vesey Street, 2nd Floor New York, NY 10080

Major Offices A directory of the firm’s global offices can be found at www.ml.com/about/offices_ml/index.htm.

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Merrill Lynch is a global powerhouse that combines immense

distribution capability with a breadth of product offerings for all kinds of clients—from its faithful Main Street customers to foreign governments and huge institutions. But a behemoth only remains one if it can respond to a changing marketplace. With an aggressive leader at its helm, today’s Merrill Lynch seems determined to do just that. Merrill’s strong position on Wall Street has made it a coveted

Merrill Lynch & Co.

Careers/Job Search

employer, and competition for jobs there is heated.

Merrill Lynch & Co.

Turn to this WetFeet Insider Guide to learn • How Merrill has been affected by and responded to current market conditions. • How the firm differs from the “white shoe” crowd. • What employees love most and like least about working at Merrill Lynch. • Where the firm is headed. • What exciting new developments job seekers should know about. • About the recruiting process. • Merrill insiders’ tips for acing your interview.

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2005 Edition