financial mechanics

On Tuesday this week I had the pleasure of having a very pleasant chat with John Stroud from Digit Advisory. Digit Advisory is a partnership of two principals who are both ex Babcock and Brown and they are now (after an enviably long round-the-world trip) touring Sydney to broadcast their message of Digit Advisory - ‘Financial Modelling Expertise’. At a first glance one could be led to believe that Digit Advisory is a pure financial modelling specialist firm with investment banking expertise but I think that in the long term the strong skills of the principals in leading a transaction will turn out to be their biggest selling point.

For transactions that are not quite at the stage where they need to appoint a global investment bank for financial modelling and execution of the transaction Digit Advisory looks like a very sensible offering. I am yet to see one of their models but based on the high-level discussions I would like to think that Digit Advisory and Corality share a passion for simple, transparent and flexible financial models. I would recommend you to have a chat to John to find out more.

Ernst & Young financial modelling: London -> Sydney

John Stroud has interestingly enough a career path that is remarkably similar to my former colleague and business partner Nick Crawley at financial modelling consultancy Navigator Project Finance. Both joined Ernst & Young financial modelling in London and were subsequently sent to Sydney to boost the financial modelling capacity there. After joining from London they both left out of frustration within one year! John went to Babcock and Brown in Sydney and Nick to ANZ investment bank. Babcock and Brown are now a very quickly sinking ship and most people have moved on bigger and better things.

Hunter Street Sydney - Australian headquarter of financial modelling?

Digit Advisory have established their offices at 66 Hunter Street which further strengthens Hunter Street’s crowd of financial modelers. In the same building they have Bamford Partners (I haven’t met them yet but they appear to have a focus on financial modelling) and further down the street are Navigator Project Finance and Corality.

Recruiting financial modelers

Digit Advisory have big plans for growth and they are already looking to recruit two people to join the team. They are looking for people with about five years experience and who could comfortably work with and support top-tier investment banks with financial modelling, analysis and execution.

On a different note it appears that boutique financial modelling companies have survived the global financial crisis far better than then banking world. Corality have in July had three more people join the team and we are looking for one more Graduate to join in a few weeks. Navigator are also looking for two more Analysts and Financial Mechanics have also recently had a new joiner.

It is a well-known fact among financial modelling training companies that certain sectors of financial training benefit from economic slow-downs. The main reason for this counter-intuitive fact is that people are looking to polish their CV in case they would be made redundant.

Corporate financial modelling training is taking the biggest hit

Not surprisingly the upswing in individual training is offset by corporates and institutions reducing training budgets to cope with the threats of recession. With many of the banks on a zero training budget for 08/09 this will keep causing a lot of pain in the financial modelling training sector. The net effect for most financial training companies is a reduction in total participants, and the hardest hit are almost always companies catering for corporate clients with high fees and costly overheads.

How do you get a good deal on financial modelling training?

If you want to use the current environment as an excuse to get a better deal on financial modelling training then you should read this. There are a number of ways of getting more attractive pricing when organising financial modelling training and in combination they can be quite effective

• Have an open discussion with your training provider and ask them how you could bring the training fees down
• Register multiple participants
• Bundle up several training courses in one registration
• Use early-bird discounts where applicable
• Organise an in-house course (and provide catering, venue, printing, etc)
• Offer to work exclusively with one training course provider
• Ask for a last minute discount in the days before a course (just keep in mind that the best courses are often full due to the small group sizes)
• Find a smaller operator who can be more flexible on price
• Offer to provide testimonials or ‘success stories’ for marketing
• Wrap the training fees up with other consulting work (say you are using F1F9 for model builds, why not ask if they can give you a good deal on the training too?)
• Promise to recommend the course on LinkedIn, Facebook, your own website, etc (could be a tough one, but it’s worth a shot)

Universities market short courses in financial modelling

Many post-graduate universities offer short courses on financial modelling as part of their alumni and continuous learning programs. In Australia we have seen UTS Financial Modeling Certificate advertise frequently in the Australian Financial Review, and recently Macquarie Applied Finance have joined in.

Specialist modelling firms targeting individuals

Some of the smaller, niche training companies are now directly targeting individuals who are looking to prepare for a tougher job market. On the more aggressive end of the scale we have Financial Mechanics and Navigator Project Finance (including financial modelling in London) who both offer courses to individuals at 50% of the corporate rate. Fi-mech even made a big announcement about it, but Navigator seems to be quieter about this arrangement but they have also been reducing the fees for financial modelling training courses in London and Singapore.

Extract from Financial Mechanics newsletter, ‘The Swamp Fox’