Investment banking qualifications: are you eligible for the job?
Open a career website of any top investment bank. Scroll down to job qualifications. What you see is usually quite standard:
“We’re very open-minded. We take students from all degree disciplines, not just finance.” Goldman Sachs
“We want to know what drives you and makes you unique”. Deutsche Bank
“We actively recruit across different degree disciplines because it brings a variety of perspectives and mindsets to the bank, which makes for a more creative business.” Nomura
“Great!” – you think. I am a perfect fit. I have a diverse background, no clue about finance and I am definitely very unique”. Well, as you suspect – getting into investment banking is a bit more complicated. After all, there is a reason why only a few percent out of thousands applicants manage to get an offer.
Top investment banking qualifications
It is true that investment banks are looking for diverse candidates when hiring for a job. But there is a standard set of investment banking qualifications you have to possess in order to be eligible.
1. Top school
What about: The name of your school is everything. Investment banks in London love to hire from Oxford, Cambridge and LSE. New York offices look for Ivy League names. Regional offices too try to pick hires from top universities in respective countries. Universities outside of the top league will often disqualify your application immediately. After all – banks have plenty of applicants from top schools and don’t bother much looking into other candidates.
What to do if you are not from the target school: No worries. It might be a bit more difficult to get your CV noticed. That is why you should compensate with something else: good internship, awesome extracurriculars, killing grades. Any kind of experience that will help you to stand out. Otherwise your best solution is network. For the next months make Linkedin your best friend – and you’ll still get a decent shot at the job.
2. Right degree
What about: I know – banks keep saying the degree won’t matter. Be it literature, history or geology – you are welcome. But why then the majority of investment bankers have quantitative backgrounds? The answer is simple. Having a numerical degree serves as a proxy for analytical and numerical skills, so sought after by the top banks. More than 30% of London investment banking directors have graduated with degrees in accounting, business or finance. 24% – economics, and around 10% in math / statistics or engineering.
This is why your education section preferably should reflect if not a finance degree – then some affiliation with business or numbers. Generally investment banks look for candidates who are numerate and business-focused, with experience in quantitative analysis, statistics, information modelling. Most sought-after are STEM majors (science, technology, engineering and math) as they show affinity with numbers and ability for logical thinking. Honours degrees in business, economics and finance are popular too as they prove interest in markets and are generally a good fit with profession.
What if you don’t have the preferred degree: Don’t be too upset yet. Many bankers have backgrounds not related to finance or numbers. If your degree isn’t in numerate subject, you will need to supplement your educational section with information that shows either strong academic results and / or interest in numerical, finance or business courses. Mention numbers-heavy courses or projects you have completed in the past, or anything else that proves your ability to solve problems.
3. Awesome GPA
What about: If requirements on school and degree are pretty vague, the situation with grades is much more straightforward.
Most banks are looking for a GPA of 3.5 out of 4.0 in US and 2:1 in UK. They also ask for a consistent academic performance and sometimes a minimum of UCAS points. If you are an international applicant, just check the conversion of grades here. A strong academic record will rarely help you to stand out from the pool of other candidates. It is more of a prerequisite that helps banks to easily eliminate less distinguished applicants.
What to do if your GPA sucks: Not much on this one. Try to find mitigating circumstances. There is a section in your application that will ask you if there were any circumstances affecting your grades. Caring about the sick relative or starting your own business can definitely qualify. If your imagination is blank on this one – focus on outstanding extracurriculars, work experience or go back to advice #1: Network.
4. Relevant work experience
What about: Generally a relevant internship is must. Unless you are an over-achiever in your studies it will greatly assist you in your application. Some people manage to get in without any experience – but it will be definitely more challenging.
What if you don’t have relevant finance work experience: Get an internship first. It does not have to be a top investment bank. Work experience in a smaller bank or finance internship in an industry company will work too. You can also focus on other experiences that add value. Banks tend to have specific industry teams (financial institutions, energy, telecommunications) or geography teams (Nordic, Italian, German). Highlight your knowledge of any of those and you can already be perceived as a valuable asset for the firm.
If getting an internship is not an option – try to compensate lack of experience by educational achievements and interesting / relevant extracurriculars. Look for projects or tasks in your past corresponding with activities of an investment banker. Almost everyone has performed some kind of research activities, either in school or in their job. Most of us had to present at one time or another. Think along the lines of industry research, investment presentations (or just presentations), building Excel models, project execution, etc.
5. Fluency in English
What about: English fluency is a must. You are not required to put any specific qualifications to prove your ability. Simply stating that you posses fluent knowledge of English is enough. A second language can be essential for some roles and advantageous for others.
What if I am applying outside US / UK: English would still be a prerequisite, although people are likely not to take it so seriosuly. On top of that – fluency in local language may be required. Getting into Moscow or Hong Kong office without the knowledge of Russian or Mandarin would be incredibly difficult, if not impossible.
6. Interest in financial markets and a well-rounded personality
What about: You probably wonder how it can be a qualification. As such, this requirement is quite vague. However, if you are serious about the job in banking, you should make sure your resume looks as if the last two years you spent dreaming about stock markets and spreadsheets. Oh yes. And try not to look too boring at the same time.
How do I demonstrate all these in one resume? Banks look for well-rounded candidates with an interesting and engaging personality. Use your extracurricular and interest sections to highlight it (rock climbing, travelling around the world on a motorcycle). Try to point out your dedication to finance (finance or trading club, attendance of finance-related conferences, etc). Generally pick a diverse set of activities and interests to show the different angles of your personality.
Common investment banking qualifications stereotypes
The most critical investment banking qualifications have been covered in the previous section. There are also a few common stereotypes about additional qualifications you need to posses. MBA, CFA, PhD. Some think women have harder time breaking into the investment banking job. Others believe you cannot apply unless you have a certain nationality. Let me walk you through these misconceptions.
#1: I need MBA to get into investment banking.
Relative to other industries MBA is neither requested nor much appreciated. Investment banks do hire MBA graduates for associate positions, but usually it is done more for their industry contacts rather than knowledge. MBA from a top school will definitely be an advantage – but the degree alone will not magically turn you into an outstanding candidate.
#2: I need PhD to get into investment banking.
Even less useful than MBA. Perceived by bankers as a waste of time. Top banks look for people with drive, enthusiasm and confidence. Unfortunately, PhD holders usually do not convey that perception. A Bachelor / Master degree should be enough for your application. Exceptions are rare – and usually involve very specialised boutique firms.
#3: I need to have an accounting accreditation (or any other obscure accreditation).
Absolutely not required. The bank will appreciate to know that you have in-depth expertise in analysing and decomposing financial statements – but not more than that.
#4: It is much more difficult for women to get a job in investment banking.
Absolutely not true. Occasionally, it might even be easier as banks are looking for a well-rounded (equal gender mix) analyst class.
#5: I need GMAT to be able to apply.
GMAT (or any other numerical test) is not required. It can help in your application – but the test alone will not distinguish you from other candidates. It can be useful for people applying from non-finance degrees to demonstrate their ability to handle numbers. But for the majority of candidates – it won’t make too much difference. Especially if your score is just mediocre.
#6: I need CFA to qualify.
Similarly to GMAT – CFA is not required when applying. It can be helpful to demonstrate affinity with numbers, knowledge of finance subjects, and – more importantly, your interest in finance.
#7: I cannot apply as I do not have a work permit for the country.
This does apply to some regional and boutique banks. However, as long as big banks are concerned – your nationality does not matter. If you meet all the requirements and are a good fit with the firm – the company will arrange all the necessary permits. The reason why there are more natives in a particular location has more to do with your cultural understanding, language and the university you went to. However, applying from another country has its perks: global banks are often looking for applicants from specific countries to take positions in regional teams.
#8: I need to have contacts inside the bank to get the job.
Having contacts inside the bank will never hurt. Especially in US where networking is a huge part of getting an investment banking job. However, this does not apply to all regions. In most locations knowing someone inside can help you to get your application noticed. Not more than that. I never had a single contact inside any of the banks – but managed to get multiple offers nonetheless.
As you see – investment banking qualifications can be tough, but not unreasonable. Regardless of your background there are always ways to spin around you application and make you look like an outstanding candidate. Hundreds of people got into investment banking without having all the necessary qualifications. Just look at the profiles of people who joined top investment banks in 2014. Tessa McQuire got a job at JP Morgan without previous work experience and with a degree in Classical Languages and Literature. Frederik Hendriksen joined Morgan Stanley after 10 months as an “entrepreneur in residence at Groupon” and 10 months as a “business development manager” at Shopbox. Diogo Conceição had a career as an actor and model before completing a business degree at the University of Singapore and becoming an associate at JP Morgan.
Case in point – nothing is impossible if you have the right skills and determination. You just need a little bit of creativity to spin around your application. I have prepared a more detailed guide on how to fix blanks in your application. You can read it here – or just check out more coverage on what you need to land an investment banking job. And make sure to share this story with your friends – I am sure they would love to know if they can apply.