The investment banking recruitment process is strict and bankers look for seven specific traits from a potential candidate. In other words, these are the factors that every potential candidate is being measured by when applying for Analyst or Associates role.
Whenever a recruiter are looking at a candidates there are two questions running through their minds. First, would I want to work next to this candidate? i.e. can I tolerate this person for 16 hours a day. Second, could I trust this person to do the job right working for me ? i.e. does this person have the right attitude, intellectual ability, will this person do a good job or always bother me every 5 minutes for help.
We will now begin to focus our attention on the specific criteria which candidates applying for the Analyst and Associate roles are being measured and evaluated by during application and interviews.
1. Prior achievements
Simply put, the job of a junior investment banker is to be able to do the job correctly under all stressful and difficult conditions and to be able to maintain a high level of performance for a prolong period of time, and attack everything with a great attitude.
To measures a candidates likelihood of meeting these requirements, prospective bankers are judge on their previous achievements to date. There is no point in mentioning you are going to work hard and have a great attitude; you have to be able to demonstrate and evidence your ability to do so via past experiences.
For undergraduate students, one of the main ways you can show your ability to work hard and achieve is via your grades.
However, for masters and MBA students, extracurricular activities and internships are equality important. For those applying for the associate level roles, what becomes paramount above all else is past work experience and less so grades and academia.
2. Grades
A common misconception amongst candidates applying is when investment bankers are reviewing a prospect’s grades, they are being used as an indicator of a candidate’s intellectual capacity. This is not the case! Grades are simply a proxy for drive, determination and work ethic, not intellectual capacity.
In order to get a 4.0 GPA or a first-class degree, that candidate must effectively get an A in all of their classes, not just the finance modules or the modules which they like. To achieve a high-grade point average, candidates must be willing to work very hard even they don’t like the class or professor or even when they were feeling sick or under outside pressure. This kind of perseverance is what makes a great investment banker, especially at the analyst level.
Why put so much emphasis on drive and determination? Many analyst will find they are tired, they don’t like their associate or VP or going through sometime with family and friends, even under those circumstances analyst are expected to perform and deliver quality work.
However, let me preface, just because you do not have a stellar academic credentials, does not mean you cannot get into investment banking, it just means you need to compensate with other things and it will be an upward climb specially when competing against other candidates with higher grade point averages.
Low grades are a red flag to recruiters and indicative of poor work ethics and lack of commitment so you will need to have some really good reasons as to why your grades are low. Some valid explanations includes; needing a full time job to support yourself during your studies, taking time off due to an illness to care giving…etc.
3. Extracurricular activities, Internships and work experience
In additional to grades, candidates are also judged in the time they spend away from the classroom which could be in the form of joining or running societies, internships, sports and for MBA candidates previous work experience.
Grades are a good start, but to be successful in investment banking you are going to have to manage multiple tasks simultaneously and excel at all of them. Hence, you are going to have to demonstrate your ability to multitask whilst also excelling at each individual task.
In the mind of an investment banker that is looking at prospective candidates a few things come to mind, does this person extracurricular activity show any signs of leadership? Has this candidate been awarded anything? Does this person have any real time commitment or just doing little task to beef up their resume? Has this candidate stuck with something even when it got hard, or leave the moment things were getting uncomfortable?
Answering all of these during your interview will demonstrate you have the proper attitude and work ethic required for investment banking. See the behavioural interview guide for more details.
For MBA students showing you have already worked under stressful situations and were able to perform is the best indicator of work ethic and proper attitude.
4. Interest in being an investment banker
Junior banker will have to demonstrate their interest and passion in a number of ways.
One of the easiest way to demonstrate this is during interviews or informational interviews with the almost guaranteed questions of “why do you want to be an investment banker.” Arguably the best way to demonstrate your interest. Candidates who perform well here are those that have really research what investment banking really is and know exactly what they are getting themselves into.
You can take a look at Investment Banking Interview and Recruitment Guide for all of the information you will need to stand out as the better candidate during application and interviews.
Another way to demonstrate this is with networking activities and internships in investment banking which will demonstrate that you understand the lifestyle and the day-to-day work of an investment banker .
Finally your technical knowledge, its one thing to pay attention in your finance classes and accounting classes to pass your exams, but it’s a whole different thing when dealing with real life finance questions. Almost 80% of candidates completely fail and underestimate this step and one of the reason we spend 40% of guide covering technical interview questions and answers.
5. Intellectual ability and analytical skills
Keep in mind that the job of a recruiter is not to identity the best candidate but to weed out the least qualified candidates.
This is more so for analyst level roles where candidates are going to be judge based on their grades, reputation of academic institution, how hard was their major or overall degree, extracurricular activity and internships or work experience.
At the associate level, previous work experience will be the best indicator of success in investment banking. Above all else, a candidate’s ability to answer technical questions is by far the best indicator of one’s technical and reasoning ability.
If you require more explanation for technical questions and building financial models and pitchbook beyond the interview guide then consider taking the financial modelling course, which will go through everything via video demonstration as well as answering interview questions while building financial models.
6. Technical knowledge
Regardless of your background, if you’re from a finance or a non-finance background, recruiters can not dumb down the entry requirements. So everyone entering investment banking will be tested on basic accounting and finance knowledge.
The type of questions you are going to get during your interviews is not academia base, which in the professional world is considered to be 40 years behind current practice, but your going to get tested on actual real world current finance concept which are being used today.
For finance background candidates either from school or work experience, you will be hold to higher standard and expect to be tested on more complex questions then those not from a finance background.
7. Communication skills and personality
You are going to be evaluated on you communication skills regardless of how great your technical skills are and if you cannot string two sentences coherently then that it an immediate red flags.
Even though junior bankers are not going to be leading the team or speaking directly to clients, it does not mean they can get away with having poor communication skills. Bankers want to know you can hold a conversation, better yet an interesting conversation, however, you are also being judge on your level of presentation and maturity to be trusted in front of clients.
Communication skills is arguably far more important at the associate level, as you going to be communicating with various parties on a daily basis.
Proving you can talk and hold a decent conversation is much easier done in an interview setting but do not ignore the power of HR staff can have on your application.