How to Become an Investment Banker

In 2021, approximately 50,000 students applied for 400 vacancies to join JP Morgan’s lucrative investment banking summer analyst class as per the Financial News. This story, however, is one that has increasingly pervaded across Wall Street’s largest institutions. With an acceptance rate often lower than the world’s most elite universities, and with a pool of qualified students, the question “How do I become an investment banker?” has often dwelled on the minds of prospective candidates.

Regardless of where you start off or come from, there is no magic formula to guaranteeing a job in investment banking. Looking back at recruitment, one thing that has often dawned on friends and colleagues is that the recruitment cycle is a function of both luck and dedication. But the more effort you put into the process, the more likely the odds will inevitably be skewed in your favor.

In this article, we outline 5 actionable steps that you can take to maximize success of becoming an investment banker, in a game where chance favors the few.

5 Steps to Help you Break into Investment Banking

For all who aspire to break into the investment banking industry, it can be difficult to know what steps you should be taking to achieve your dream. With this in mind, these five essential steps on how to become an investment banker should help you begin your journey.

Step 1: Networking

Networking is perhaps your most useful commodity, and luckily its one that’s free. If you are fortunate enough to go to a “target” school, universities where there is an established recruitment process and alumni network for banks, make sure to take advantage of every on-campus event available.

On-Campus Opportunities

• Information Sessions. Show up to demonstrate interest, get introduced to the firm and speak with recruitment representatives.
• One-on-One Coffee Chats. Learn about the personalized experiences of bankers and answer any questions about the firm.
• Alumni Socials. Get an intimate opportunity to speak with bankers.

Networking Tips

• Research the firm
• Draft questions in advance
• Stay professional by wearing business attire

Focusing on these details will signal to employers your interest in the role. Any time that you interact with an employee at one of these events, also be sure to politely ask for a business card once the conversation has ended. This way, you can keep in contact or ask to be introduced to other team members, actions which will help your name stay top of mind when it comes to resume vetting.

Cold Emails

For those of you who don’t have these opportunities through your school, there’s no need to worry. Perhaps the most effective tool is the tried-and-true cold email. As a general strategy, it’s best to reach out to school alumni at banks of interest, as the shared background will not only serve as a strong starting point for conversation but will also help to drive the probability of a response (and this is key). Often times, alumni for target schools will also be responsible for the initial stages of the recruitment process at that school, so speaking to these individuals may be a critical entry point. If your alumni pool at a bank is limited, getting in touch with any employee can be just as important.

While contacting over LinkedIn is the most direct way to reach out, I’ve found that bankers are most receptive over email. Most banks have relatively standardized email addresses which can be found online to help piece together contact information. When thinking about the level of banker to target, senior level bankers may have more voice in the recruitment process, but speaking to analysts and associates can provide important insight into the day-to-day life and culture of a firm, points which can be spoken about during interviews. All in all, getting exposure to as many individuals across position will only serve to benefit you.

If you need more guidance with reaching out bankers and others not in your established network, consider checking out our free cold email networking templates.

Playing the Numbers Game

As a point of reference, during my recruitment process, I sent over 300 cold emails to bankers across the Street. In many cases, I never got a response, and that’s okay. Emails I was able to convert to a phone call helped to make me marginally more informed, and these details make the biggest difference in a process like investment banking recruitment. In some cases (particularly for boutique firms), these initial calls directly translated to initial phone screens/ interviews.

Step 2: Behavioral & Technical Prep

Behavioral

Practice makes perfect, and there is nothing truer in the investment banking recruitment process. Behavioral questions during interviews are relatively consistent across the board, so putting in the reps will build confidence and create fluidity in answering questions that are almost always certain to come up. Be sure to carryout any required research for individual banks and have a pool of examples ready to tackle questions like:

• "Why investment banking?"
• "Tell me about a time you faced a conflict while working with a team."
• "Tell me about a time you faced an ethical dilemma in the workplace."

Grabbing friends and going through this is a simple way to get the ball rolling. At this stage of your career, the most important element for interviews lies in the behaviorals as they help illustrate the type of person you are, and whether there is a cultural fit with the firm. Making sure that answers don’t sound overly rehearsed, and being genuine in responses will be important as this comes through in the interview.

Technical

In preparing for technical questions, taking foundational finance and accounting courses at your university will help lay a strong foundation. However, the best way to get prepared is through external programs and courses. Resources like our Complete Finance & Valuation Course can help give you a competitive edge to stand out in a diluted market. In addition to a strong financial foundation, honing your skills in Excel and PowerPoint can also give you al eg into investment banking. The first tool is extensively used in financial modeling while PowerPoint is crucial when communicating complex financial information to stakeholders. Learn how to become proficient in these tools with our Excel + PPT for Business & Finance Bundle.

Ultimately, technical questions in banking are not meant to stress your knowledge of the job, but rather serve as a barometer of your effort and interest in learning about the subject matter. Interviewers will be testing whose been put in the time to gain a minimum understanding of the industry’s fundamental skill sets.

Step 3: Application Approach

Stay Organized

The largest pipeline to a full-time job in investment banking comes from a bank’s summer internship program (Junior Year), so being prepared ahead of on-cycle recruitment is key. Here are some resources to stay organized:

• University Career Center. Keep an eye out for key recruitment events and on-campus interviews.
• Public Forums (Wall Street Oasis). Stay up to date on the latest timelines.
• Company Websites. Watch for applications as they open.

Most banks will start recruiting the spring of your Sophomore Year, with some as early as January, so it’s important to be prepared for interviews heading into that semester.

For instance, J. P. Morgan offers 10 to 12-week investment banking internships for penultimate-year university students. They represent a great opportunity to work on actual deals and transactions for the company’s clients, which will allow you to develop essential technical skills. Engaging in on-the-job experience will open the possibility of being offered a full-time position upon completion of the internship.

Apply as Early as Possible

One mistake that I’ve often seen students make is refraining from applying to a firm, particularly if there is a rolling deadline, because they don’t feel 100% ready to interview.

Banks are incentivized to fill up their intern pools ahead of competitors to vie for and attract the most qualified candidates. As time goes on, a diminishing number of available seats means that banks can be even more selective with candidates while vetting resumes and carrying out interviews. Applying to applications as they go live will give you the best fighting chance of being selected for an initial interview, period. At the end of the day, banks will start filling out their intern classes whether you are ready or not, and at the very minimum, it’s better to have an interview (even if not fully prepared) versus not have an interview at all.

Keep an Open Mind

Another mistake I often see students make when gearing up for applications is their approach to firm selection. Given the structure of the industry and the competitive nature of candidates, some students may find themselves fixated on reputation or brand name of a firm. Perhaps the most misguided decision in recruitment would be to only apply to the Goldmans, Bank of Americas and Evercores of the world.

Given how limited positions are in the industry, the reality is that the odds of rejection are higher than not. By choosing to apply to a specific subsect of banks, rather than have an open attitude towards every bank, you will only hurt your chances.

Step 4: Attitude

It might not be an item that immediately comes to mind, but one thing that is imperative for the recruitment cycle is a healthy mentality. Many students entering the recruitment race have historically found overwhelming success in their lives, being a top performer in high school, getting into an elite university, becoming an athlete at the highest level of collegial sports, etc. In some of these cases, the recruitment process will be an individual’s first test in facing rejection at scale.

As you go through the process, be sure to take constructive feedback for what it is, improving for the next interview. Mistakes will happen to everyone along the way (believe me, this is almost a certainty), but fixating on these mistakes will only serve as a hindrance. Instead, remember to learn from every experience and leverage it as a catalyst for the next.

Step 5: Landing the Job

While not an exact science, taking these steps helps to create a strong foundation for the recruitment process. As once famously said by Benjamin Franklin, “by failing to prepare, you are preparing to fail.”

If you ask any investment banker, the job isn’t rocket science; however, investment banking is a job where effort and perseverance pay dividends. The basis you lay out through the recruitment process will not only help your chances in entering the industry, but also pave the way and approach for a successful career on the desk.

Additional Resources

Thanks for reading our guide on how to get into investment banking. Remember, once you land a job in investment banking, the hard work doesn’t end there. In fact, it’s only just the beginning. You’ve already proven yourself during the recruitment process and now it’s time to continue building that foundation.

If you're interested in further developing your technical skills to better your chances at landing a competitive investment banking role, check out our Complete Finance & Valuation Course and more using the get started button below!

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