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Careers Advice - Investment Bank
Harrison Careers Services - How to get a Job with an Investment Bank
The fact that the value in today’s money of your lifetime earnings at an investment bank is a few million pounds may explain the incredible competition to get hired by a premier investment bank: one such bank reported 15,000 applications for 150 places in the last recruiting season. There are some students who get hired by investment banks without doing much preparation, but this tends to be the exception rather than the rule. In the following article, I highlight some of the issues you need to consider in order to maximise your chances of getting hired.
First and foremost, you need to decide which type of job you want with an investment bank. Generally, the options are Corporate Finance Analyst, Research Analyst, Salesperson, Trader, Operations Analyst, Financial Controller, Technology Analyst, Asset Manager, Human Resources Analyst or Compliance Analyst. The best way to figure out which function is right for you is to talk to other people who have worked in investment banks and to read lots of career guides. Once you have chosen which type of job you want, you need to choose a division because all the banks will ask you to select one when you apply.
When you go to presentations, get there early and be armed with a 30 second sales-pitch about your background (10 seconds), and about why you want to work in the division and specific business area that you have chosen (20 seconds). Finish by saying that you have a few questions that you would like to ask. With this classic introduction, you have just initiated the beginnings of a relationship. Get the name and email address of the person you are talking to and follow up afterwards with an email. If you manage 7 to 10 such conversations at a presentation, and it is highly likely that you will be short-listed for interview by the professionals before you have even thought about your application form. I estimate that 30-40% of interviews are of people who have been short-listed by such meetings at presentations, dinners, personal contacts, etc. Be brave. If you do not have the confidence now to solicit someone you have never met at a presentation, you are going to struggle later in the process.
At university, you do not learn much about how an investment bank works, so any contacts you have or can make will be useful. The best sources are people in the year above you, especially those who have spent a summer internship at an investment bank. MBA students are even more valuable as a resource, but hard to track down. Your alumnus network should also be useful.
Consider giving yourself a real competitive advantage by acquiring Securities Institute qualifications, such as the Investment Management Certificate, studying for which will take you about 40 hours. Also consider getting certified on Bloomberg. No doubt there are several Bloomberg terminals available to you at university.
Although you will be applying online and not necessarily using your résumé first, eventually you will need a résumé that makes the very most of your achievements, so consider getting a professional résumé writer involved. Apart from the usual things that your Careers Services Office will tell you to put in your résumé, focus on inserting a section called Achievements that lists your top 5 achievements. Ask yourself whether your classmates would find these achievements genuinely impressive.
Applications are not worth completing unless you do them properly. Make sure that you include the names of any professionals who you have met during the milkround process. Mentioning in your application the names of 3 professionals you have had contact with probably increases your chances of being selected for interview from say 30% for the average Oxbridge student to 80%.
Once you have landed a few interviews, your work is just beginning. I think there are 5 main areas of knowledge that you need to address.
- You need to have an awareness of the macroeconomic issues of the day and, more specifically, be able to make 10 to 15 comments about the European, US and Asian economies, referring to issues such as interest rates, GDP growth, exchange rate movements, inflation, unemployment, stock market movements and bond price movements. You can easily acquire this knowledge by simply reading the Financial Times or any of the quality Sunday newspapers. Allow 5 hours for this.
- You need to acquire theoretical knowledge of the business area that you are targeting. This is one of your greatest challenges because there is minimal publicly available information. For example, a sexy area within investment banking is Credit Derivatives, which is easy to understand if you have the material to educate you, but very difficult indeed if you are trying to figure it out from newspaper articles. To get this knowledge, you need an insider. Allow 10 hours of preparation (assuming you can get the information).
- Next you need to acquire the practical knowledge that shows you how the theoretical knowledge is actually applied, and how professionals come up with buy and sell ideas and make money from them. To acquire this knowledge, you need to read research reports which are not publicly available. Research reports are generally very well written, very easy to understand, and always summarise their key messages within 3-5 bullet points on the first page. Getting hold of them is tough, and again, you need someone within the industry to help you with this. Allow 10 hours.
- Next, you need to answer the question which contributes about 50% of the weighting of the decision by the interviewer on whether to recommend you for the next round – why do you want to work in your chosen area? The answer varies according to which function (Sales, Trading, Research, Corporate Finance, etc.) you want, and which specific business area (Convertible Bonds, Credit Derivatives, Commodity Sales, etc.) you are targeting. You need to have at least 8 outstanding reasons why you are interested in this area and you cannot come out with these great reasons without showing that you really understand what the job involves and in particular what the role of an analyst is. You can probably come up with some decent reasons yourself, but it is best to have someone who has worked in the business to check these for you because what you think might be a good reason and what they think might be a good reason are often different. Allow 2 hours.
- Next, you need to have the market information as it relates to the specific business area that you are applying to. This means reading publications like Financial News. The Financial Times is okay for giving you general stuff about the macro environment, and company-specific stories, but it is not specific enough to the investment banking industry for you to be able to rely upon it alone.
In addition to the essential knowledge set out above, you obviously need to be able to handle the usual competency-style questions about your personal background, including questions on teamwork, leadership, your achievements at university, your weaknesses, strengths, etc. Similarly, you also need to make it through the numerical, verbal reasoning and logic-style assessment tests that the banks will set you. Generally, these questions and tests are not a problem for anyone at a top university, but you should prepare, at least so that you know what to expect.
Unfortunately the most desirable firms often conduct interviews first, with the result that you are often quite unprepared for your most important interviews. To address this problem, you need to practise mock interviews before the real ones happen, and you probably need to practise them with experienced interviewers, and not just your flatmates. Careers Service advisors are a good start but of limited value unless they have genuine investment banking industry knowledge.
It is not surprising that the harder you prepare for investment banking interviews, the higher your chances of success. When I meet students who are applying for investment banks, it is often quite clear right from the beginning how much work they are prepared to commit, and it seems to me that the planning process should start at the beginning of your penultimate year. The 50 or so hours you spend in preparing for investment banking interviews will make a real difference to how you perform at those interviews, and ultimately will help you land a job at a premier investment bank – which will probably change your life forever.
Peter Harrison (peter@harrisoncareers.com, www.harrisoncareers.com) is a former Executive Director of Goldman Sachs London and spent a summer internship at McKinsey London while attending Kellogg Business School in the US. Harrison Careers Services helps students get jobs with consulting firms.
© Phillip Paterson 2003 for the Economics Society