How to Prepare for a Career in Investment Banking
Learn how to break into the competitive world of investment banking with our expert tips on building the skills and network needed to become successful.
Posted March 12, 2024
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Investment banking is a highly sought-after job industry because of its generous compensation and many lucrative exit opportunities. Generally, investment bankers start their careers as analysts for commercial banks, investment banks, or securities firms, working on teams to provide financial advice and aid in raising capital. As they gain experience and/or additional education, they may progress to Associate, and then even Vice President. After Vice President, there is Senior Vice President and finally, Managing Partner, both positions that involve leading teams and overseeing the firm’s most important clients and transactions.
It’s extremely difficult to land an IB job. There are certain things you can do before entering recruiting in order to maximize your chances of getting hired and ensure success in the role itself. In this article, we’ll go over some of them. The best way to prepare, however, is to work one-on-one with an investment banking coach who will be able to provide personalized feedback on your resume and interview skills as well as insight into many of the top firms. Browse all of Leland’s expert IB coaches here.
Why Investment Banking?
Notoriously, investment banking roles involve long hours, a demanding workload, and high levels of stress. However, the job can also be very rewarding, both financially and intellectually, in the short and long term. Many people go into investment banking with the end goal of transitioning into a still lucrative but slightly less stressful career in finance, such as wealth management, hedge funds, venture capital, or private equity. Others enjoy its quantitative nature and seek to move up the ranks to a leadership position.
Regardless of what your motivations are, you will need to be able to communicate them clearly in the interviews. Two of the most common questions posed in the behavioral interview are, “Why do you want to work at this specific firm?” and “Why do you want to work in investment banking?” Neither, “Because I’d make a lot of money.” nor, “Because I want to become a venture capitalist.” is a compelling answer.
Prepping for interviews? Read How to Answer the “Why Investment Banking?” Interview Question.
Application Requirements
There are different eligibility requirements depending on the role and bank covering academic background and necessary skills, among others. Because of its highly analytical nature, most aspiring investment bankers hold an undergraduate degree in a quantitative field like finance, economics, or accounting. Some positions enforce a minimum cumulative GPA, though others maintain no such standard. More senior positions usually require applicants to have an advanced degree like an MBA.
As far as skills, those that are repeatedly mentioned across firms and levels include the ability to perform financial analysis, make data-based decisions, proficiently use Microsoft Suite (especially Excel), effectively communicate and work with a team, manage time and projects well, and work hard.
Experience in the finance industry, or an adjacent one, through internships or other full-time jobs, may be useful in demonstrating these skillsets and the ability to perform at a high level in a fast-paced and often chaotic environment.
How to Build the Right Skills for Investment Banking
The best, and arguably easiest, way to build the right skills for a career in investment banking is to take the right courses in college. Many classes in programs like finance purposefully funnel students toward careers on Wall Street and as such, are methodical in offering the right curriculum.
If you’ve already graduated, there are other avenues to gaining financial skills. For those who prefer more structured learning, many universities and companies offer paid and unpaid courses through platforms like Coursera and Udemy. Here are a few examples:
- Business and Financial Modeling Specialization by the University of Pennsylvania Wharton School (on Coursera)
- Financial Markets by Yale University (on Coursera)
- Investment Banking: Financial Analysis and Valuation by the University of Illinois–Urbana-Champaign (on Coursera)
- Excel Financial Modeling and Business Analysis Masterclass by Udemy
- The Complete Financial Analyst Course 2023 by Udemy
Whether you’re learning finance from the beginning or trying to round out some knowledge gaps, there is sure to be a course out there that fits your needs. If a more independent style of learning is preferred to a structured class, there are other opportunities to build skills. These include books, working with a coach, doing research, and simply practicing.
On the other hand, if you are already in an established career path and want to transition into investment banking, you may consider going to business school. MBA programs can act as a “clean slate” for many, allowing them to pivot into a new industry by offering courses to learn new skills, an entire class of people to network with, and time/partnerships for summer internships. If you’re in this group of people, read The Top MBA Programs for Investment Banking.
How to Get a Job in Investment Banking
Before even beginning to submit applications, aspiring investment bankers should spend time preparing for quantitative/technical interviews by learning financial skills, and behavioral interviews by talking to current or former IB analysts and associates. These conversations are often referred to as “coffee chats” and are a way to learn about individual firms and the job in general, as well as to network and build connections with others in the industry.
The IB recruiting process involves multiple rounds of screenings and interviews. The first step is generally to submit a resume and cover letter, in response to a job posting or as a general application. If the applicant is still in their undergrad program, there is often a more established recruiting route. It is much, much more likely that you’ll be invited to interview if your resume is accompanied by a reference from a current employee or previous one who knows the interviewer. The odds of getting past the first few screenings are quite low without any kind of referral.
After the resume/cover letter round, there is usually a preliminary interview/phone call where the applicant is asked basic fit questions to determine whether they fit the general requirements of the role. Once this step is completed, the applicant will enter a series of behavioral and technical interviews designed to test the more complicated demands of the job, including knowledge of financial concepts, interpersonal skills, and fit with the company culture. After the interviews comes the official job offer, at which point the candidate may have the opportunity to negotiate the terms of employment, including salary and benefits.
How to Become an Investment Banker
Now that we’ve covered some of the requisite skills and ways to build them, we’ll review a couple of tips to help you succeed in the application process.
- Network, network, network. Some firms don’t even read the resumes that come through the application portals. Networking done poorly is cold and transactional. On the flip side, networking done well can help you build real relationships with industry professionals. Cold email potential contacts, find people through your own connections, attend networking events, and take advantage of any school resources, if applicable.
- Research. Like in any other industry, not all investment banks are the same. It’s important that you know a) what you are looking for and what is best suited to your goals, and b) what the different banks specialize in and what you will bring to the table. This will primarily help you in behavioral interviews as you prove your
- Get relevant experience. When it comes to investment banking, the caliber of internships and other work experience matters more than the number of roles. If you can land a summer internship at a top firm, great. If not, find other opportunities that require financial skills, such as startups or fintech companies.
- Learn technical skills and practice for quantitative interviews. Regardless of how skilled or experienced you are, make sure that you’ve researched and practiced the most common questions asked in technical interviews and gone through realistic mock interviews with a friend, peer, mentor, or coach.
Read: The Top 20 Most Frequently Asked Investment Banking Technical Interview Questions - Demonstrate a clear path to investment banking. As mentioned, there are a lot of applicants who want to get into IB for its high salaries and sought-after exit opportunities. To stand out in this crowd, it helps to show a genuine interest in the work and a clear path toward investment banking in your interests, work experience, classes, etc. From looking at your resume, the interviewers should be able to see a path to the industry.
Final Note
All of these things will help you get your foot in the door for investment banking. Gain relevant work experience, take classes and build skills, network, make connections, get a referral, apply, practice for and ace the interviews, and land the job. We know that though this process sounds simple, it is incredibly difficult. To give yourself the best chance of success, we highly recommend working one-on-one with a coach to strategize your approach, practice technical questions, conduct mock interviews, and learn about different firms. Browse all of our expert investment banking coaches here.
As you prepare for recruiting, you may find these other resources helpful.
- The Best Investment Banking Newsletters & Podcasts to Subscribe To
- How to Nail the Second Most Common Investment Banking Interview Question
- What Do Investment Banks Actually Do?
- A Guide to the Investment Banking Interview: Tips From an Expert
- 37 Free Resources to Break Into Investment Banking
- A Comprehensive Guide to Investment Banking-What to Do From Freshman to Senior Year
- How to Negotiate Your Salary - with Example Emails
- Wealth Management vs. Investment Banking: Key Differences and Career Prospects
Leland provides you with the content, community, and coaching that you need to build your dream investment banking career and accomplish other ambitious goals. Sign up today to gain access to additional free resources, community events, small group classes, world-class coaching, and more.
