Karl Moore: This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail. Today I am delighted to speak to Bob Dorrance, who is the CEO of TD Securities.
Bob, when I look at my Bcom and MBA students, a lot of them want to be in investment banking or management consulting: those are the two very popular fields. What draws people to investment banking? You have been an investment banker and you run, as part of your responsibility, the investment banking part of TD - what is it about investment banking that people find so attractive?
Bob Dorrance: There are a number of things, I think, that make investment banking a compelling opportunity for younger students and I think significantly it's been around the growth of the business in the last 30 years. It has grown substantially as the financial markets have grown, it's become much more global, it has attracted all sorts of different types of experts into it and different professions in terms of specialties coming in, whether they are from law or engineering, etc.
So the specialization, the globalization, the sheer competitiveness of investment banking, I think, makes it a, on the surface, a very attractive business to go in. I think, as the industry has grown, I find that the students' eyes are a little bit opened to how much work is also expected to happen in investment banking. So it attracts a certain type: somebody, I think, who wants to compete, who doesn't mind wanting to work and who, perhaps, the aura of Wall Street or Bay Street or London sounds nice and sounds like a highly paid, highly competitive, and highly rewarding place to work.
So I think it's just that, the pinnacle of how quickly I can put myself against the opportunities and how rapidly I might grow and how well I might do and what I might learn and the opportunity, I think, that if you are willing to invest in the career you could have a very rewarding career.
KM: When you think about what all the young people are all bringing, they are all bright and they have great analytical skills, but how do you become a senior investment banker? What sets those senior people against the ones who stay more in the analytic side?
BD: I think that senior investment bankers evolve a relationship skill that becomes very valuable to the client base and the client base, for the most successful investment bankers, is the CEO, CFO and the board. The CEO, CFO and the board are looking for financial acumen, financial advice, and somebody they can trust. They need one or two go-to people, so it does come down to forming a relationship with the CEO, CFO and to some extent the board, and so you have to have relationships first. I think that means at the end of the day you have to be able to translate what you have learned and your technical skills into judgment, and people are looking for judgment as it relates to financial advice - that is the most successful investment banker.
KM: This has been Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail.