Fortune magazine has published its annual list of the top 100 companies to work for in America, and a whopping 20 financial services firms made the grade.

Among the top three were Edward Jones, once again ranked #2. The St. Louis-based investment advisor sailed through the recession without having to close any of its 12,615 offices. And it’s even looking to hire more staff (see below).

Robert W. Baird & Co. came in at number 11; Johnson Financial Group, based in Wisconsin, was the third-ranked financial firm at number 22 on the list. As for investment banking jobs, Goldman Sachs was fifth among financial companies and 24th overall.

The public may view Goldman as the poster boy for corporate excess, but employees are certainly happy with a big increase in bonuses this year. The firm is noted for a high degree of employee loyalty. And Goldman reported a broadening of opportunities for women in the firm, as well, with female vice presidents, including executive directors, up by 21% and the number of female managing directors up by 45%.

Rounding out the other financial firms in the top 100 Best Employers:

27. Scottrade
29. Quicken Loans
35. American Fidelity Assurance Co.
37. Aflac
44. Ernst & Young
45. USAA
48. FactSet Research Systems
54. Paychex
66. Plante & Moran
70. Deloitte
71. PricewaterhouseCoopers
73. American Express
84. Accenture
88. KPMG
94. Intuit

These top firms are in hiring mode, too. 22 of them are looking for more than 500 new hires each, including Edward Jones, Ernst & Young, USAA, Deloitte, PricewaterhouseCoopers, American Express, and KPMG. You can check out the entire list and see descriptions of the types of jobs that are open on the Fortune magazine website.

Have you worked for any of these top 100 companies? Or want to? Let us know your thoughts by adding a comment below.

Do employers really look at your cover letter? Is it worth spending a lot of time on one? If so, what’s the most important thing to include?

The answer depends on who you ask, according to a recent article in New Jersey Business News. Jane Angelich, a former vice president of human resources at the investment banking firm of Salomon Brothers, says the cover letter is even more important than the resume. That’s because with so many resumes looking and reading the same, the cover letter gives you a chance to really catch someone’s attention and differentiate yourself.

Others experts say many recruiters and human resource professionals simply put the cover letter aside and jump right to the resume.

However, one thing they agree on is that if you’re going to include a cover letter, it had better do two things well. First, it must be personalized. That means it must be addressed to a specific person, clearly indicating the investment banking job you’re applying for, and should focus on the specific needs of the company.

If you don’t know the specific person, you’ve got to do some sleuthing. Either call the organization and ask the receptionist, check LinkedIn or Facebook to see who might be doing the hiring, or contact a current or former employee of the firm to get the name of the person in charge of hiring.

Second, you’ve got to make it interesting, but in a way that’s relevant to the specific job being filled. Your job is to demonstrate how well you “fit” with the job. Some experts even suggest a two-column format that compares “company requirements” with “my qualifications.” That way you can link many of the key words the company uses to your own experience.

We want to know what you think.

What is your experience with employers and recruiters reading your cover letter? (leave a comment below)

Investment banking firms that shed jobs in a hurry last year, and lost scores of others to high-level defections, are now finding they have to “up the ante” to fill the gaps in their ranks.

That’s the word from BusinessWeek who report that both Bank of America Corp. and UBS AG are doubling base salaries to lure bankers from competitors. UBS, for example, is offering managing directors base pay as high as 300,000 pounds ($470,000), double the amount of last May.

Many firms lost senior talent when the government slapped restrictions on compensation for firms receiving bail-out funds. But both UBS and Merrill Lynch have paid back their government loans and are now free to set compensation as they see fit.

The article quotes John Purcell, managing director of London- based executive search firm Purcell & Co. as saying, “In the world of investment banking, it’s a simple case of who pays wins. Institutions that are fairly directly under political control are facing significant difficulties retaining staff.”

Of course, many banks are raising salaries while cutting back on bonuses in order to placate the public backlash against banker’s compensation. Bonuses paid by UBS reported dropped 71 percent in 2009. Higher salaries are being used to retain top workers who’ve had to deal with pay cuts or freezes over the past 18 months.

Bank of America is reportedly on the hunt to replace three dozen senior investment bankers who quit the firm after its takeover of Merrill Lynch.

UBS is recruiting investment banking job candidates on base pay only, according to Jason Kennedy, CEO of the London-based recruiting firm, Kennedy Associates. “Target candidates … have been ex-UBS employees and other candidates who in the past moved from the bulge-bracket firms to the small broker dealers and now want to move back to the larger firms,” Kennedy said.

You would think a public backlash against bankers and the threat of tighter government regulations would put a damper on university graduates choosing to study finance. But that’s not the case, according to Andrew Clare at the Cass Business School in London, who noted that applications to study finance are up 60 percent at his school.

Meanwhile, the investment banking  job market is turning around for hiring at the intern and graduate level was well. Even the Royal Bank of Scotland, battered by the financial crisis, is planning to hire 596 new graduates in 2010, more than double the number from last year, reports the Financial Times.

Citi Group is shopping for 330 graduates and interns for its offices in Europe, the Middle East and Africa; that’s up 15 percent. UBS, Bank of American and Merrill Lynch are busying hiring as well.

Mind you, many of the new jobs are geared towards specific lines of business that have been more active in the last year. This includes trading and risk management. In addition, pay structures are shifting in order to pre-empt any regulatory backlash against paying big bonuses. There’s a move toward a greater proportion of compensation being in the form of salary, with bonuses paid in shares and deferred over a number of years.

The influx of younger workers comes at the right time. Changing public sentiment, increasingly regulations and the end of a 20+ year boom in investment banking have many senior bankers questioning whether they want to stay in the industry. Some are choosing to move into less regulated areas, such as hedge funds. Others are leaving the industry altogether, to pursue other career paths.

Morgan Stanley is planning to boost its securities business by hiring several hundred more traders in the next three years, according to an interview with the new chief executive of the firm, James Gorman, in the Financial Times.

Morgan Stanley’s sales and trading operations fell behind its rivals, Goldman Sachs and JPMorgan Chase last year, pulling in revenues of $5 bn. in fixed income trading, versus $17.6 bn. for JPMorgan Chase and $23.3 bn. for Goldman. Now the firm wants to take better advantage of the boom in fixed income, commodities, currencies and interest rate trades – as opposed to the more complex derivatives that have served it well in the past.

Although Morgan hired 350 people in their securities business last year, Gorman feels the division could grow considerably larger. “We need to seriously grow our footprint in products like currencies, equity derivatives, and commodities. We could easily be 25 per cent bigger than we are,” he said.

How aggressively should you negotiate the terms of a job offer, especially in a tight job market like this one? It’s a question that leading business schools in the UK and Europe are attempting to answer for their MBA students, in the wake of complaints from on-campus recruiters.

Apparently, some of the candidates who received job offers pushed too hard for fat salaries, ignoring other areas of compensation for which companies often have more flexibility.

Now the schools are expanding their classes on negotiating skills, to help candidates get better deals without annoying prospective employers, according to an article in the Financial Times.

Shifting the focus from basic salary can help both sides. First, because employers don’t like to set precedents when it come to base salary. Second, because other perks, from transportation to wardrobe allowances, relocation and housing expenses, and even private school allowances for kids, can often be more personal and meaningful (and easier to grant).

Of course, the biggest mistake you can make is not negotiating at all. When times are hard, candidates tend to give in more quickly, according to Daniel Porot, who teaches salary negotiations at IMD in Lausanne, Switzerland, and the London Business School. But this sends the wrong message. You should instead be emphasizing your unique abilities and the specific value you bring to the firm. Some other tips from the article include:

Seize the day: you’ll never have as much negotiating power as the moment you receive your investment banking job offer. Employers expect you to negotiate, and will not balk if you ask for a couple of days to think about things.

Do your research. Make sure you know what type of compensation other professionals in your niche and with your experience are earning.

Do not attempt to bluff an employer by claiming you have a competing offer, if you don’t. However, if you have a high-paying offer for a job you don’t want as much, you can make a strong case for matching that amount.

Practice your negotiating with a friend. Ask a friend or colleague to role-play as to how the discussion might go.

Don’t obsess over salary. As mentioned above, it’s often easier for an employer to be flexible on the perks rather than base salary.

Finally, think about negotiating to negotiate later. If you can’t get everything you want, one option is to agree to a compensation review at the six-month mark, after you’ve demonstrated your value to your new employer.

As major banks get set to hand over billions of dollars in bonuses to employees, despite much public indignation, the Times Online UK examined whether these types of incentives really do what they’re supposed to: namely, prevent top employees from leaving.

The article quotes Geraint Anderson, the author of Cityboy: Beer and Loathing in the Square Mile, and a former utilities research analyst at Dresdner Kleinwort, offering the traditional viewpoint: “The simple fact is, you go into the City to make money. Firms are hiring at the moment and staff will leave if they are not given bonuses. The banks will show staff no loyalty in bad times, so why should staff be loyal in return?”

However a new book by Boris Groysberg, an associate professor in organizational behavior at Harvard Business School, suggests otherwise.

Groysberg analyzed 1,000 “star” analysts at 78 investment banks, along with 20,000 non-star analysts at 400 firms. His surprising conclusion: “Exceptional performance is far less portable than is widely believed. We found that mobile stars [bankers who leave one company for another] experienced an immediate degradation in performance that persisted for at least five years. Thus their exceptional performance at their prior employer appears to have been more firm-specific than is generally appreciated … Banks behave as if stars deserve and should appropriate all the value they generate, but stars without the companies they work for might not be stars.”

Jeremy Batstone-Carr, the head of private client research at Charles Stanley stockbrokers, goes a step further. He suggests that bonuses ” are paid out not when a company is doing well but when it looks as if a company is doing well; they reward short-term performance; they reward people who are just lucky to be in the right place at the right time; the “performance” element of a performance-related bonus is entirely subjective; bonuses cease to be effective after a while because people come to expect them, like a salary.”

Nevertheless, bonuses are not likely to disappear from the banking industry anytime soon. Not because they’re deserved, but because bankers, even if they secretly admit they are grossly overpaid, understand that if they don’t grab their share, somebody else will.

As a friend of the article’s author notes, “With only a very few, seriously deluded, exceptions, no one believed that we were worth the equivalent of 100 teachers or 50 doctors … We all knew it was absurd … but if we didn’t take as much of the cake as possible, someone else would. It all came down to the size of the bonus pool.”

In a sharp rebuttal to the populist outrage against investment bankers, John Tamny, a weekly columnist for Forbes, writes that pay is high in finance because, like it or not, they deserve it.

Aspiring traders and investment bankers toil for years in university, and often in grad school as well, earning MBAs, before struggling to land a lucrative entry-level position. It isn’t exactly easy street after that, either.

It’s a rare person who can land that investment banking  job and hang onto it long-term, Tamny says. Very few people have the numerical skills to put together M&A trades, or the stomach for the volatile nature of the business, where one mistake can have you booted out the door. Fewer still are able to handle the extreme hours and competition.

On top of it all, Wall Street’s detractors miss the point: compensation and bonuses are high because of the enormous value that investment bankers often bring to their clients. Clients pay large fees because they value the advice and strategies. Nobody is holding a gun to their head.

The same holds true for traders. The successful traders we hear about earning mega-bonuses earn them because they generate enormous profits that enrich their employers far beyond what they receive in terms of compensation. And, as Tamny points out, since many Wall Street firms are publicly owned, they have shareholders who willingly agree to these compensation practices, without any form of coercion.

Taxpayer-funded bailouts of the big banks may have been a bad idea. But complaining about paying people the going market rate in return for their contributions, is not, Tamny says. Although on the flip side, these firms should also be free to fail if their compensation practices sink their business.

BNET has an amusing and useful article about how even a stellar candidate can “flunk” an interview by overlooking hidden traps. These days, when you’re likely to be competing for an investment banking job against many others with years of experience that are similar to yours, it’s worth paying attention to the details. For example:

Never drop your guard in front of “the help.” Always treat receptionists, secretaries and other admin workers with the utmost courtesy and respect. Not surprisingly, interviewers often check with their staff about how a candidate behaves prior to the interview. On candidate, a “Mr. X”, cruised through his interview but had gone into a lengthy tirade beforehand in front of the receptionist about the lack of parking spaces available for visitors. His lack of control when he thought he wasn’t being judged set off warning signals when the interviewer heard about it.

Other no-nos: never denigrate a particular job you’re applying for. You may feel it’s beneath your talents and experience, but your goal is to get the job offer first, then have the choice of turning it down. Criticizing or commenting on the job description during the interview takes you immediately out of the running, and wastes both your time and the interviewer’s.

And these days with social networking playing a bigger role in job hunting, it pays to treat these informal networks in a professional manner. Many job leads have hit the wall when a candidate uses sloppy language, poor spelling, or has typos in their online messages. You have to be professional in every communication that relates to a prospective job, because these messages will be judged as carefully as your cover letter and resume.

Check out the BNET article for more ways to annoy an interviewer.

We were talking to Charlie Panoff from Objective Solutions International about job interviews and he asked us this question – and, for the record, no we did not get it right. Hopefully, you’ll be better prepared and when asked this one, a light bulb will go on for you.

Q: A windowless room contains three identical light fixtures, each containing an identical light bulb. Each light is connected to one of three switches outside of the room. Each bulb is switched off to begin. You are outside the room, the door is closed, you can not see anything inside the room. You have one, and only one, opportunity to flip any of the external switches. After flipping your chosen switch(es), you may go into the room and look at the lights. You may not touch the switches again. How can you tell which switch goes to which light?

A: Turn on switch #1 for a short while, then turn it off. Turn on switch #2 and immediately enter the room.

The illuminated bulb represents switch #2. The warm but turned off bulb represents switch #1. The cold, non-illuminated bulb represents switch #3.

Note: This solution works if at the beginning all bulbs are off. What if they are all on? You won’t be able to tell from the heat, so just guess. You have a 1 in 6 chance if they are random, however, most light switches/fixtures are not random. Your chances improve based on standard configurations.

Although we learned of this question in our interview with Charlie Panoff, we found it in written form in Timothy Crack’s Heard on the Street: Quantitative Questions from Wall Street Job Interviews. Buy the book for more questions like these.