One of the important elements of investment banking is the issue of bonds, preferred stock, mortgage pass-throughs, mortgage-backed and other asset-backed securities, credit default swaps and other derivatives that solve financing and credit problems for big corporations. These securities are traded globally and purchased by the largest institutions in the world, including pension funds, charitable foundations, investment advisers, mutual funds, corporate and bank investment funds, as well as foreign central banks. The people who sell these securities to institutions are fixed-income salespeople.
Institutional fixed-income sales is one of the most sought-after and storied jobs on Wall Street. Michael Milken ran the fixed-income sales department for Drexel Burnham and created the junk-bond crisis of the late 1980s through marketing events such as the Predator's Ball and other high-profile, high-stakes sales methods. "Bonfire of the Vanities," a book by Tom Wolfe, portrayed the life and fall of a big-producer bond salesman of the same era. The image of the institutional bond salesperson was that of high-pressure work, long hard hours, high pay and hard play.
When a fixed-income salesman joins a firm, he is assigned a book of approximately 20 to 40 accounts that include money funds at top corporations, banks, state and city government pension funds, investment advisers and even sovereign government funds. He works in a Wall Street trading room, on the trading desk surrounded by computer screens and phones, where he spends approximately 12 hours a day monitoring markets, calling accounts and putting together deals ranging from millions of dollars to billions of dollars in value. He is paid a commission that represents a few pennies per $1,000 transacted, which amounts to a lot of money because of the size of the transactions.
Skills and Culture
To succeed as a fixed-income salesperson, you must have a natural ability to negotiate under pressure; an in-depth knowledge of economics, geo-politics and market behavior; and a thorough understanding of business capital formation and finance. You must be willing to put your job first in nearly all situations, including the birth of your child. It is not as much a sales job as it is a form of financial consulting, providing your clients with expert financial and economic analysis, and savvy deal-making services.
Most but not all fixed-income salespeople have advanced degrees from top business schools. Working as a summer intern and showing talent for the business is one way to improve your chances of being hired. The competition is fierce, however, and there is always a value to being introduced by a relative or friend who works in investment banking or who runs a large investment fund. The competition is so tough that you don't get a second chance to prove yourself, so you must put everything you have into top job performance.