My Pleasure – Keep The Cards And Letters Coming

/2 Comments/in


Hi Francine,

I’m a constant reader of Re: The Auditors and value your insight. I’m currently at a Big 4 firm in [a really big US city], and I’ve just made Senior. I’ve been toying with the idea of leaving public and heading into the private sector, and just wondered if you could provide insight into jumping ship from a Big 4 firm to go into the Private Equity/Hedge Fund accounting field.

I know I want to go into private, but I want to make sure that my decision is well thought out. Additionally, I know hedge funds can be an uncertain field as well, often closing up shop after a few years. To simplify, I guess, what is your opinion of going the hedge fund/private equity route as opposed to just a corporate accounting function?

Any insight you can provide would be greatly appreciated!

Thanks,
Loyal Reader Guy

Hi Loyal Reader Guy,
Thanks for reading and glad to field your question.

But let me ask you this – What has motivated you to “toy” with the idea of leaving your firm? What changed, other than the promo?

Regards,
fm

Dear Francine,
I’ve been “toying” with the idea for several reasons. I always planned on leaving public some day, I just wasn’t sure when or why. My primary reason as of late has been a growing concern both with the future of the Big 4 (my firm received a substantial amount of votes in your poll for the next to go bust), but more specifically the future my position (and the related opportunities, salary, benefits) that come with it.

I’ve started to notice that my firm seems to be over-staffed as well as losing some major wins, so naturally I’ve begun to think about the future and sustainability. Other than the promotion, I’d say my interests in what I do (audit) have have decreased substantially, and I’d like to be taking more ownership in what I do and my specific function within an organization (i.e. in private). So I guess my issue is: do I try and find another function within my firm that fits me or do I look in the private sector.

Thanks for your time,
Loyal Reader Guy

Hi Guy,
Well, I’ve had the evening to think about your question…

On the side of not leaving:
1) You just got a promotion. They like you. You’re doing well. If there’s overstaffing or contraction in business, you’re not likely going to be on the list of those to let go.

2) You just got a promotion. You’re on the good list. You should get more choice in other things to do, maybe not assignments, but other activities such as special projects, practice activities, recruiting, etc. At PwC, for example, there’s always lots of that and the folks who are favored get to do it.

3) You’ve been there three years maximum. Have you learned everything you want to learn from public accounting? Once you’re out, it’s harder to take advantage of the training, conferences, internal resources, people to learn from who have been there done that.

4) If you’ve been working in financial services, your job security is better in the firms. Have you looked at what’s going on outside in industry?

5) You’ve just been promoted. You got a salary increase, probably a bonus. You may be able to jump for a slightly higher salary at a hedge fund or other financial firm, assuming you have three or more years of experience (Do you have your CPA yet?) But then salary and bonus becomes just as uncertain.

Big money opportunities for accountants/auditors only come from salary jumps when you move to another company or from a place that pays big bonuses. Otherwise you’re going to stall out no matter where you go if you keep doing the same thing. Which is what will happen if you join a company that won’t pay for training, conferences, a variety of assignments including international.

On the side of leaving:
1) If the people you work for are tools, find a company where you like the people you work with and can respect them.

2) If you have to travel a lot now, you may find a place where you can go to the same office every day, commute, come home at a decent hour except at month end, quarter end, and year end close, and whenever there are special projects or other emergencies. (There’s no free lunch.)

3) If you like travel, there are plenty of companies that want young Big 4 experienced auditors who love to travel and those companies are willing to pay a lot for it.

4) If you think that you will be laid off or somehow pushed off to the side, then leave. Make choices on your time, not someone else’s. The severance will be minimal at your level and not worth staying and getting a layoff on your record that can be construed as a performance layoff. Worse yet, that they make a case for a performance based layoff to get you out.

Hedge funds are a special breed. As you said, they are extremely risky and your due diligence before making a choice will be very important. If you are auditing those types of firms now and bring some experience to the table, you will be sought after. Big 4 experience coupled with time in a fund will make you a very special guy after a few years.

However, if you expect a hedge fund to teach you the things that make accounting and auditing different in a hedge fund, I would wait. They will have neither the time nor the inclination. Unless you find a very nurturing group, you will probably face same drudge-type work that any junior person has to do at the beginning of their career.

Hope that helps. Feel free to ask any more questions.
Best regards,
fm

Hi Francine

Sorry I didn’t get a chance to reply last night. The more I’ve thought about our discussion, the more it’s pushed me even more on the fence between staying/leaving, I think. Now, that may just be because I had it in my head that I thought I wanted to leave. But in response to some of your points:

In terms of not leaving:

I did just get a promotion to senior so, you’re right in the sense that I’m obviously valued, at least enough to keep around for another busy season!

The people I work with are excellent.

In terms of my time in public, I’m entering the start of my 3rd, year, so really only 2 full years. There is definitely a ton I could still learn, and additionally I’m still working to complete the remaining parts of my exam.

My practice, financial services-audit, definitely seems to be weathering the economy better than some other parts, but like all areas, there’s a lot of “excess capacity” this summer.

In terms of leaving:

The promotion to senior this year did not come with a substantial % raise like in previous years. This is definitely a concern to me, as I work a lot of hours, I want to be adequately and fairly compensated for that work.

While there is still much to learn in public, I’ve found myself assigned to a large engagement team where I’ve been for the past two busy seasons and approximately 75% of my time with the firm. So I’d say maybe I have some burnout there. This may be partly my fault as well for not seeking out other opportunities within the practice.

Lastly, a concern stemming from lower raises and large amounts of unassigned staff is that at somewhere down the road, some cuts are going to be made, either in staff or further in salaries/raises.

All right, I need to get back to the grind. I definitely have a lot of pondering to do. This has helped me a lot…

Thanks Francine.

Regards,
Loyal Reader Guy  


Dear Guy,
One additional point about two years on same client.

If you stay you have two choices.

1) Try to get on another client in same industry to have some rounding out but stay focused on developing expertise in that industry. Three years in financial services will be very, very attractive to any financial firm.

2) Or stay in same client but ask to work on something really hot like derivatives, IFRS conversion, off-balance sheet stuff or M&A activities. Then you have something sexy to shop to a future employer if you stay on one client for now or to use as leverage if you stay at the firm.

Either way, make sure as a senior you get to lead something or review others work or bring a new person into the team. Anything to show leadership, supervisory exposure. If you leave, you want to be hired as a senior now or a manager in a year.

Good luck.

Call or write any time.
fm

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2 replies
  1. Independent Accountant
    Independent Accountant says:

    Loyal reader:
    If you were just promoted to senior, stay at least a year as a senior before you leave. You will be more marketable then. Do not, I repeat do not go into financial services. You are a kid. At this stage in my life, I have seen most all of it. You are behind the curve. The financial services industry will contract for the next 2-5 years. If you want to leave Big 87654 for industry, consider: oil & gas, manufacturing, chemicals, anything but "FIRE", finance, insurance or real estate.

  2. Will
    Will says:

    Francine,

    Thank you for always making yourself available to your readers. There have been a few times when I have needed advice from someone with big4 experience and I can honestly say you were always there to promptly respond my questions. For that I am very thankful. I only hope that someday I can return the favor.

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