Winding Down

Though my internship is not yet over my posts on this blog are, so it's time to reflect on the journey up to this point. I've got about two weeks left so I think it's a good time to look back on everything and see how it's developed.

On my first day at UBS I was nervous, shy, and not very confident in my ability to do a good job with my assigned work. I'm still not the loudest person in the office, but I grew comfortable with the people pretty quickly and have developed some solid relationships that I expect will endure much longer than the few weeks I have left of the internship. The people have all been very helpful, and if there's one thing I can takeaway from all the positive interactions I've had it is that it pays to lend a hand.

As time passed I became gradually more confident in my ability to accomplish whatever crossed my desk. An important part of success to me this summer has been acknowledging that I don't know everything and it's okay to ask questions. Though I took care not to pester anyone with my inquiries, it became very clear to me early on that I'll produce much higher quality work if I admit to myself when I'm stumped and seek help when necessary. Generally I'd prefer to figure something out on my own, but that's not always possible and I've embraced that.

My time at UBS has helped me improve as both an employee and as a person. I've developed some skills I didn't know I'd need, and improved on others already in my repertoire. I've mentioned a few times before how important the relationship is to the wealth management business and that's really my main takeaway from this summer. In any line of business it's people who make decisions, and it certainly helps to have as many in your corner as possible. Going forward I intend to take great care to take my eyes off the computer screen often enough to get to know the people around me. Luckily I did enough of that these past few months. I think it's paid off in what's been a great summer experience and lessons I'll take with me as I continue to grow into my career.

Summer Slowdown

So I'm a bit more than halfway through my internship now and things are coming together pretty nicely. I'm comfortable with everyone in the office and I'm getting to know the other interns better, which is cool. As unlicensed wealth management interns we can't really do a lot of work that has a real impact but we help out as much as we're able to.

Things have slown down a fair amount since my last post. Between bosses being out of the office and two other guys starting on the same team as me, the work is spread pretty thin lately. My daily responsibilities haven't changed much, but my longer term projects are wrapping up so I've begun to think about the next step. Rather than just do what I'm asked for the rest of my time at UBS I've been brainstorming projects to work on that would have an impact even after I've taken my last steps out of the office at the end of the internship. When I;m able to start working on it I plan to put together a report for my FA about the local economy and outlook over the next decade or two. If I'm able to identify where the growth will be in this time frame I'll be able to recommend strategies for him to build his group's book of business and tap the market by targeting small business, the lawyers and CPAs who workwith them, and support networks. It's a longer term project but could actually be useful, as my team is constantly in acquisition mode and this would expand the landscape some.

In all, I'm a little surprised by how laid back this segment of the finance industry can be, but that's turned out to be a good thing so far. Rather than spending all my time sitting behind a computer staring at excel all day, I'm able to do things like chat at the coffee machine for a few minutes without feeling guilty or go out to lunch and strengthen some of the new connections I've made. I've found a good balance between work and socializing, and I hope I'm able to continue to approach my internship in the way I've done up to this point.

The Week of the Breakfast Meetings

Hi all,

I've been with UBS for 6 weeks now and so far so good. For a while it felt as though I'd fallen into a routine, with most days being pretty similar and myself never really getting out of the office during the day. These last two weeks have brought some welcome change though - breakfast meetings and new interns top the list.

A handful of other guys have finally begun their internships at UBS (seems like I got to it pretty soon after school let out). It's refreshing to finally see some other young faces around the office, and I'm looking forward to getting to know them better.

This last week I was able to go to two breakfasts before the day started.

On Monday my boss found me before I even made it to my desk and asked me to come along with him to a breakfast meeting with a prospective client. It doesn't seem like much, but I really enjoy opportunities like these because it's a chance for me to 1) see how they bring in business and 2) get a chance to interact with some new people in a different setting. It's a nice change of pace from the regular 8 hours at my desk. As I've mentioned before, meetings like this help to underscore the importance of the relationship in the wealth management business. It's important to like/trust the person you hand the bulk of your wealth to, and I've found it pretty interesting how the approach is tweaked a bit with each person to customize it to their personality.

Wednesday was really cool. UBS' chief equity strategist was in town, so they organized a small breakfast and invited a few clients to join for a talk and some food. He gave a pretty broad presentation about the lay of the land and where the money's flowing these days. Most of what he said was stuff I'd heard or read already, but it was definitely still interesting to hear it delivered in the flesh, and some good questions from the audience helped round out the talk.

In all, my experience with UBS has been great so far and it seems like the next few weeks still have quite a bit in store for me.

Four Weeks In

In the two weeks that have passed since my last post I've grown more comfortable in the office and been able to do some interesting stuff. I've also begun to drink more coffee. I began the internship doing some fairly un-engaging things - cleaning up client lists, keeping track of wholesalers, scheduling, etc. Since then I've seen a shift toward things that actually interest me. There's still a fair amount of the type of thing that I just mentioned. That comes with the territory, but it all has to get done if things are going to continue to function properly.

My main accomplishments thus far are cleaning up/centralizing the system they use to track clients or prospects, and putting together a detailed investment matrix with information on any of the money managers, mutual funds, bond funds, annuities, or other investment vehicles that UBS deals with. As I mentioned in an earlier post, the relationship is a key element of the Wealth Management business - both to bringing in new clients and keeping existing ones satisfied. Since everything really revolves around the interface between the client and the advisor, it's important that all members of the team are able to track each other's progress to both stay up to date or to pick up where the other left off. I developed a form that allows for easier tracking of interactions with clients and prospects, put it in a place where everyone can access it, and have helped to make sure everything is up to date. I've seen everyone on the team using it, so hopefully that means it's helped to improve the process a bit.

Next one is the investment matrix. This is still a work in progress since there is a LOT of information to consolidate. But it looks to be shaping up nicely. It's going to be used to narrow down options and identify preferred investment vehicles, so it's important that there be a lot of detail in the final product. It's been a good exercise to get me better acquainted with their business and the types of places they feel comfortable allocating clients' capital. Once I'm done with that I have a few more similar projects lined up, so I'm looking forward to what's to come.

Though I've grown a lot more comfortable in the office than I was in my first week or two, I'm only a month in so I'm definitely still getting acquainted with the business. Overall, it's a good place to be and I'll continue to do what I can to make the most of the opportunity

Frist Two Weeks

Hi All,

My first day in the office was May 9th, which will be two weeks ago tomorrow. I spent a lot of time trying to mentally prepare, and day one actually went a lot more smoothly than I expected. Things got off to a bit of a slow start, with the majority of the morning spent making introductions, setting me up with an email/phone/desk, and getting to know the ins and outs of the office. I had expected to still be a little nervous but I got accustomed to my surroundings pretty quickly and was ready to get to work on my first project that afternoon.

Wealth Management is a business where the relationship is key, so it's important to have up to date information on all clients and prospects. My first task was to go through the prospects in Outlook and verify that we have their correct contact information on file. It took a few phone calls but I was able to track down just about everyone whose information was incomplete and make sure we are up to date. A few days later I was given a similar task (in that it required a few hundred phone calls) to get in touch with wholesalers (of mutual funds, annuities, fixed income funds, etc) to request that they send over some "golf swag" for a charity outing my boss is helping to organize.

As I expected, there's going to be a good amount of grunt work required of me throughout this internship, but I'm happy to do that because I'll also have the opportunity to take on some more interesting projects and get some perspective on the industry. For instance, I was given one task to research another financial advisor in the area to come up with a client list and estimate his assets under management. In addition to that I've been trusted to assist one of the investment strategy associates with some portfolio analysis that will (hopefully) help persuade some clients to trust more of their assets to UBS. I haven't gotten started on that, but I'm looking forward to it when I get around to it. On top of that, I'm sitting in on a lot of the internal meetings as well as meetings between FAs and wholesalers or representatives who come in from hedge funds, essentially offering the same service. These meetings have really been a highlight of the experience so far. I'm still new to the game so some of it goes over my head, but it's exciting for me to be in a place where everyone shares the same passion for this stuff as I do.

In all, I'd say these first two weeks have been sort of like an orientation for me. I haven't had a chance to work on anything major just yet, but I've been able to deepen my understanding of their business and the economy/markets it relies on. As this isn't a formal or structured internship, they didn't have too much for me to do when I stepped in the door on day one. But the team sat down toward the end of last week (while I was out) to brainstorm ideas and come up with projects for me to work on. So we'll see what tomorrow has in store for me.

First Post

Hi all, my name is Michael and I just finished my sophomore year as a BBA at Ross. I'll be interning at UBS Peninsula Wealth Management Group in Birmingham, Michigan. It's a short 5 minute drive from my home in nearby Beverly Hills, so not a bad commute at all.

As an intern I'll have a fair amount of responsibility from grunt work (to be expected) to client specific projects, marketing work, and anything in between. It's not a formally structured program so I can't say with certainty what I'll be doing all summer, but I think the flexibility of having no "real" structure may end up being a good thing. I expect the internship to be demanding in terms of the quality of work expected from me, and that's something that will help motivate me to do a good job no matter how large or small the task.

I'm a little nervous about making a good first impression, but I'm hoping to start off strong. I've spoken with my boss a few times over the course of the semester and he seems to be genuinely interested in intern development, so I look forward to working for him. Additionally, I've reached out to past interns to get a sense of how to best prepare and they've had great things to say about the experience.

Final Post

This will be my final post on this blog, yes I could talk about the lessons I learned, about UBS, or more about Sales and Trading. But that really is boring stuff for me to talk about; after all in my view aside from learning about company specific things like culture, infrastructure and workflow, the life lessons really are the same across all internships. Hence I will attempt to explain the sharp drop in equity markets over the past 2 days instead. Hopefully you, the reader, finds that more interesting and applicable.

So the Fed came out on Tuesday and confirmed that they will be using principal payments from the mortagage backed securities they purchased during the crisis to reinvest in treasuries (recall basic bond math and all the articles in the financial press during fall of 2008 here). They further stated that the purpose of this is to keep their balance sheet at a constant size. In layman's terms this means the Fed will engage in a further, albeit much smaller, round of injecting cash into the financial system. This should be bullish for stocks right? Yes, it was on initial impressions, hence the short lived rally in equities post the immediate announcement. And then people started to realize the facts - the Fed is keeping its balance sheet constant, so going forward, aside from really small investments (around 150 billion), there will not be another stimulus or huge amounts of cash printed and pushed into the system. Furthermore, it was a policy announcement, not an operational one, i.e. no principal payments were reinvested.

The immediate result of this was the further tanking of the stock market and a sharp rally in the US dollar as the market came round.

Do note however, that the fact remains that the US economy is on tenterhooks, and the possibility of a double dip recession remains looming on the horizon. Implicit in the Fed's announcement and decision was the basis of a weak US economy, hence the need for a little nudge and reassurance. However the market plays out to this is anyone's guess, but unfortunately for the Fed, they remain cornered in a tight spot between a weakening economy and fiscal profligacy - not a good spot to be in.

All That Glitters is not Gold

Cliche title for an oft misunderstood metal... but one that has held, and continues to hold tremendous importance to man. As you can guess, I'm on a desk dealing in precious metals, chiefly gold; I will try to explain the mysteries of investing in the metal.

On a simplified basis, gold demand can be split into two broad categories: investment demand and commercial demand. Both names are self explanatory, but to give you a more specific definition, investment demand is comprised of buyers from the financial community - hedge funds, pension funds, mutual funds, anyone looking to speculate or hold gold for the long term. Commercial demand consists of buyers from industry, namely from dental services and car makers. Another important part of this category is made up of individual buyers - India is a huge retail market for gold due to its important uses in their culture, namely in dowries and numerous festivals they celebrate.

Considering both parts of the demand picture for gold, it becomes obvious that it is viewed both as a commodity as well as a store of value. This stands in contrast to other metals which are mainly used as industrial materials. Consider as a short example gold's main rival - silver. Silver is constantly mined and consumed as an industrial metal, and this can be observed in its price, which trades in double digits, compared to gold which trades in triple digits. Also consider that gold is hardly ever consumed as most of it is held physically as jewelry or in bars, to be converted into value later. This means its supply is mostly fixed, while demand fluctuates according to investment and commercial demand.

Thus, gold essentially becomes a currency - which harks back to the era of the gold standard, or the Bretton-Woods agreement. From that legacy, and the metal's cultural history of being a material valued by all, gold today fills the modern role of a currency of last resort, a hedge against inflation, or a hedge against the US dollar. All three roles are extremely similar and are based in a common line of reasoning - should paper based currencies, as they are doing now, continue to be printed freely to stimulate global economies, the fiat currencies of America and Europe will slowly lose their value, making gold even more valuable as the hard asset holds its value better than the paper asset.

Ultimately, the physical gold custody trade is an armageddon trade and is definitely a tail risk event... but it never hurts to be prepared does it?

How a Trading Floor Works

Imagine standing up to a sea of computer monitors and more than 1500 individuals fixated on the at least three screens in front of them. Add to that sales people standing and shouting at traders across the floor, as well as the incessant ringing of phones and never ending chatter of people talking to clients, each other and anyone else. What never fails to amaze the passive observer is the fact that all that activity is driven by a single entity - the market. Its millisecond changes in price and information sends ripples through the trading floor, bringing together activity from all around the country, and even from across the oceans into a single location.

But one has to wonder how all the chaos is controlled and packed into a neat organization, much less a global financial institution. First, consider the seating arrangements on the floor. Space is allocated to individual desks, which have their sales people and traders sit at most an aisle away. These desks deal in their own individual markets, with sales people either getting orders for traders to execute, or moving securities off the traders’ books. Now, consider the synergy available to the investment bank from having the bulk of its trading operations in a single location. Traders and sales people do not confine themselves to their desks; they move around, call, or simply stand up and shout across desks to get the pulse of other markets. These extra bits of information, cheaply and efficiently gathered, allow traders/sales people to form a much better picture of how markets are moving, what they term "color".

Color is the trading floor's edge. Sales people call their clients to update them on market color gotten from traders or other clients. This in turn allows them to get their client's perspective on markets, thus giving them an even clearer picture of the forces driving the markets. This process continues, and the trading floor that gives the best color, thus enabling its clients to make the most money, ultimately takes home the biggest share of the pot.

First Post

I am a BBA junior, and will be interning at UBS Sales & Trading, Fixed Income and Commodities this summer. Talking to seniors who have interned on trading desks in the past, it seems that most of my summer will be spent building relationships with co-workers and full time staff, as well as basic office tasks like photocopying, scanning, picking up coffee, and picking up food. Outside of this, a lot of downtime is to be expected between tasks, with the onus on interns to take the initiative and seek out more work to maximize their learning experience.

As of now, UBS has not given any details about what my summer project would be, hence no one in the intern class knows what it entails, must be done or even what to expect etc. Given the amount of down time expected at work, working on the project and tuning it up to a high quality product should not be a problem since plenty of time can be spent on it.

Working at UBS will be exciting as they have a trading floor the size of approximately two football fields, with all traders on the same space. Such an environment will definitely be exciting and highly charged when markets are open, and is something I look forward to being part of. On the other hand, working for the first time outside of home and in a foreign working culture will be a challenge that I foresee must be overcome.