In a sea of over achievers
who are equally talented, likeable and prepared, the "Why investment
banking?" interview question can be the only differentiating question left
for bankers to ask; making it both a popular & decisive question.
Whilst for
college students who don't look like aspiring bankers on paper (i.e. no fin/acc
major, business degree or relevant work experience) it's of epic importance.
After all, you guys need to be able to explain why you want to do investment
banking when your past decisions don't suggest anything of the kind.
How do you give a
10/10 answer to the "Why investment banking?" interview question?
There's a huge
selection of points you could make, but keep it short and sharp. Generally a
good answer will contain 3-5 solid reasons why you're interested in IB.
Typical examples
like world class education, skills development, type of work, the challenge,
real responsibility in billion dollar transactions etc. are all acceptable.
But try not to
trot out the same BS as everyone else.
Importantly,
avoid reasons that are self-centered in a 'bad' way.
Let me explain.
As a banker interviewing you I'd be OK if you mentioned investment banking
attracts you because of the learning opportunities, as this is a selfish reason
that also, and ironically, benefits the bank - passionate 24 year olds put in
100-hour work weeks with ease after all.
But if I heard
you wanted to do IB simply in order to 'build your resume' and/or to secure an
exit opportunity I would - in my mind at least - throw you out the freaking
door and then proceed to lay a BlackBerry beat down! Being made to feel like a
halfway house for financial vagrants, a mere stepping-stone, is not my idea of
good times you see. So even though everyone knows investment banking is
attractive for the resume & exit oops don't say it!
What can help you
avoid a BlackBerry Beat Down? Well, you would get me extremely interested if
you answered the "Why investment banking?" interview question by
talking about how you have older friends in banking who have over the years
shared with you what it's really like to be a banker - both the good and the
bad.
And then how
that's made you realize 3 specific things about banking which make it stand out
above any other graduate job.
Not only will I
believe you still love banking despite the war stories, but that you've
actually given it some thought beyond "I need a salary of Blankfein
proportions if I'm ever going to pay off these student debts".
What I'm trying
to say is that a great answer will list unique and specific reasons 'why
investment banking' and it will connect them to the sources you learned them
from whether they be friends, professors, books etc.
Want 6 specific
reasons 'Why investment banking' that are sure to work? Try talking about how
you love the...
1. Cornerstone
role investment banks play in deals and/or the role they play more broadly
within the world of business - IBs are to business what the White House is to
the world...central hub HQ! And this is why bankers are called masters of the
universe. So bring up this point, albeit laced in more formal language and
without ever mentioning 'masters of the universe'!!
2. Coalface
exposure to industry and financial markets, which is unique to IB - there's not
a graduate job on the planet that puts you closer to the action than banking.
3. Results-driven
deal-oriented approach - this point distinguishes banking from so many other
professions like law, consulting etc, where players often get paid for simply
'doing', as opposed to 'achieving'. And by specifically mentioning this point
you will show bankers that you've got the right mentality and that you're not
an increment-fiend like lawyers. PS Once again be sure to phrase this in a more
professional kinda way!
4. Type of people
that work in banking - talk about this from both a learning and enjoyment point
of view, and most importantly reference people you know in banking
(particularly at that bank) to avoid looking like you're simply shining shoes
and kissing ass!
5. Nature of the
work - analyzing, problem solving, real-world focused. If you are going to talk
about this then make sure you bring up a handful of examples in passing; e.g. 10k
analysis, spreading comps, deal structuring etc.
6. The specific
industry/product group you are interviewing with - this is a must! By talking
about why IB through the lens of that specific group, you'll really narrow the
reasons down to specific, tangible, relatable ones - and that means bankers are
more likely to believe you and like you. e.g. If you say to Goldman Sachs TMT
that you want to do investment banking because you find the business/investing
side of the tech industry fascinating after working as an unpaid intern at a
social media start up over summer, then you'll hit the "Why investment
banking?" question out of the park!
Whatever you
choose, be sure you can talk intelligently about it if probed by the bankers.
Special note for
those of you with non-banking experience.
If you have work
experience in accounting, consulting etc. then tell the bankers that whilst
your time at KPMG or BCG or wherever you worked was a terrific experience, it
didn't offer...[reasons why you love IB].
This is a hidden
opportunity to further explain your story, point out why you want to change
into banking now and assure them again that IB is what you truly want above all
else.
Any comparison
you make should be delivered subtly though. Not because your interviewer might
have worked at KPMG or BCG, but simply because it looks unprofessional to
blatantly badmouth others. Negativity in any form doesn't look good.
Special note for
aspiring investment banking analysts.
PS: for those of
you who get this question in an investment banking analyst interview (i.e. not a
summer internship interview), you'll need to push your story of why IB even
harder to convince bankers to take you on. This is because bankers hate
offering permanent spots to candidates who might quit the minute things get
tough.
Passion is a
banker's best insurance policy against this - so make sure you show it guys!!
If you want to go
one step further and really impress the bankers with your answer, then tell
them how you became interested in IB years ago and point to the real life
things you've since done that have confirmed your passion; studies elected,
college clubs joined, people met, friends talked to, books read, jobs taken.
Showing a long
and considered journey to get into investment banking is the idea here.
What's the final
secret to a magic answer here?
Recognize the
downers of banking, not just the uppers. Bankers you see, want to hire students
who aren't being drawn to banking based simply on Hollywood-hype or
CNBC-glamor. They want to know you are realistic about the job, prepared to do
grunt work, and yet still super passionate.
After all, the
Jimmy Cramer fan club and the Gekko Wannabe students will never be able to hack
it when they find out what investment banking really involves - and this sort
of drop out costs the banks a bomb.
So with all that
in mind, during your answer briefly mention how your friends in banking have
clued you in on the realities of the job too - the long hours, sacrifice and
other downers which we'll talk candidly about in the Inside Investment Banking
System when it comes out this fall.
Of course, don't
end your question on a downer - meaning be sure to follow up any reality
checking with your 3 main reasons why IB repeated in very very short form, kind
of like "...but of course banking is an easy choice for me, because
of...".
Now that you've
conquered the "Why investment banking?" interview question, check out
our advice on other common investment banking interview questions and answers
now.
Richard is the
head writer for Inside Investment Banking - a one-stop shop of advice for
students just like you who want to know how to get into investment banking
without a 4.0 GPA from Harvard or nepotistic connections on Wall Street.
Created by a team
of 5 young bankers, Inside Investment Banking contains all the real insider
advice you need to write killer banking resumes, answer tough interview
questions, network with bankers and much more.