investment banking interviews are considerably different from other interviews

Here’s the truth: It’s a little bit of both. Despite recruiters’ fervent insistence
that they’re just looking for bright, motivated people, the fact of the matter is
that investment banking interviews are considerably different from other interviews
you’ll encounter. Why? Because the job itself is substantially different
from other jobs (we’re not saying it’s necessarily better or worse, mind you—
it’s just different). As one insider said, “No single component of the analyst or
associate job is necessarily all that difficult: You have to be good with numbers,
good with people, capable of producing a lot of work—perfectly—in a short
amount of time, willing to sacrifice a lot for the job, and you’ve got to consistently
demonstrate good judgment. In other professional contexts, you might
be fine if you get four out of the five right. But in banking, you’ve got to
demonstrate all five, and there are actually relatively few people out there who
possess all of these characteristics.”
We couldn’t have said it better ourselves. Investment banking careers offer
extraordinary rewards (tangible and intangible) to those who pursue them, but
they also require extraordinary demands. The better you understand this
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Interview Roadmap
fundamental truth—and the way it drives the direction of your interviews—the
more successful you’ll be in your job search.
What’s So Special About Investment Banking?
So how exactly is investment banking different? We’ve summarized the five
primary distinguishing characteristics here. Many of them will sound familiar
(particularly if you’ve read WetFeet’s Insider Guide to Careers in Investment
Banking), but we’ve pared it down here to those factors most likely to affect
your interview.
Lifestyle Sacrifices
You’ve heard it a million times before, but it bears repeating: This is not a
profession for the faint of heart. Corporate finance and M&A bankers may
clock 80 to 90 hours in a typical week, breaking the 100-hour mark (or, put a
different way, 2½ times the standard 40-hour workweek) during critical stages
of a deal.
Aside from the unique physical demands of the job, its inherent unpredictability
can be particularly frustrating. Canceled dinners and postponed vacations are
par for the course for investment bankers. In sales and trading, hours are
somewhat more moderate and predictable. “People in sales and trading work
very hard but rarely have the all-nighters that people on the investment banking
side do. It’s less of a 24/7 job,” says one insider who heads global recruiting for
a bulge-bracket firm.
Because the profession (at least at the junior levels) requires extraordinary
energy, stamina, and a willingness to prioritize work commitments above
personal ones, recruiters are on the lookout for individuals who have
demonstrated a comparable degree of dedication to other endeavors.
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Interview Roadmap
Quantitative Aptitude
You’ll often hear recruiters insist that the work of a financial analyst or
associate isn’t rocket science and that the mechanics of financial analysis can
readily be taught to someone who’s willing to learn them. Why, then, must you
often go to great lengths to prove that you’re comfortable with numbers over
the course of the interview? Because even though banks can teach you basic
finance, accounting, and valuation principles, they can’t teach you the baseline
level of quantitative aptitude necessary to learn the required skills quickly.
Perhaps more importantly, only you know whether you find financial analysis to
be interesting (or even fascinating); that can’t be taught, but it makes a big
difference when you’re running a spreadsheet model at 3 in the morning.
The job is demanding enough; it will be especially miserable—not to mention
unfulfilling—if you’re the type of person who would prefer invasive dental
surgery over a lively debate about free cash flows. You don’t need to prove that
you’ve devised new quadratic formulae during your off hours, but those who
can best endure the demands of the job are those who are intellectually
stimulated by the challenge of making decisions and implementing corporate
strategy largely through quantitative analysis.
If your resume and transcript suggest little prior exposure to this type of
analysis (or little academic training in math), recruiters will undoubtedly dig for
evidence that you’re capable of (and interested in) learning the tools of the
trade. “It’s not that the English major isn’t smart enough,” says one recruiter,
“but if they’ve never taken a single accounting, economics, or finance class, we
question whether or not they’d really thrive in this environment. And quite
frankly, the job is tough enough for people who have had training in these
disciplines and know they enjoy this type of work. If you aren’t all that
interested in finance, it just wouldn’t be worth it.”
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Interview Roadmap
Little Margin for Error
Compared to other jobs available to newly minted college graduates or MBAs,
junior-level investment banking positions offer the opportunity to assume a
tremendous amount of responsibility relatively early in your career. While this is
an attractive feature from a personal and professional development standpoint,
it also means that expectations are high and the margin for error low. Despite
the tremendous learning curve, there is little tolerance for mistakes—even the
smallest miscalculation or typo can seriously damage the team’s credibility with
clients. Those who succeed in banking over the long-term demonstrate far
more than an appreciation for big-picture issues; to the contrary, they attribute
the same life-or-death importance to the smallest of details. To ensure that they
can entrust new hires with a considerable level of responsibility from (literally)
day 1, investment banking recruiters target those candidates who have consistently
upheld exceptionally high performance standards—and developed a
particularly keen eye for detail—in other areas.
Intensely Team-Driven Environment
It’s definitely no coincidence that many current investment banking analysts and
associates were once college athletes. In corporate finance and M&A, project
teams typically consist of three or four bankers who work closely over the
course of the transaction. Team members rely heavily on each other not only to
complete their specific assigned tasks, but also to pick up the slack whenever
and however necessary to get the job done right. Successful junior bankers
prioritize collective priorities over individual ones, adapt their working styles to
the needs of the group, and eagerly share their expertise with other team
members.
This team focus extends well beyond the cubicle walls: Banks devote significant
resources to team-building events within departments and analyst/associate
classes in order to foster a strong sense of camaraderie and group affiliation at
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Interview Roadmap
every level. Every banker tells tales of the analysts in their class who would
routinely drop whatever they themselves were working on to help out an
analyst classmate who was struggling to keep all the balls in the air at 3 in the
morning. To preserve this unique environment, recruiters look for candidates
with well-honed team sensibilities and a genuine preference for team-based
activities over solitary ones.
Hierarchical Structure
Though some banks pride themselves on their “entrepreneurial spirit” or “flat
organizational structure,” few industries are as rigidly hierarchical as investment
banking. While there are only four rungs on the promotion ladder at most
banks (analyst, associate, vice president, and managing director), the differences
among these levels are pronounced. Further, the work environment within
most firms is fraught with protocol, and failure to observe the unwritten rules
of conduct does not go unnoticed. Even at banks that trumpet their team
spirit, senior bankers routinely delegate tasks to junior bankers simply because
they can, regardless of whether it represents the most efficient way of getting
things done.
The concentration of larger-than-life egos and type-A personalities means that
junior bankers must fit a very specific profile; recruiters want to ensure that
analysts and associates can take direction well, manage demanding and often
difficult personalities, maintain a healthy appetite for grunt work, and cultivate
an appreciation for life at the bottom of the totem pole.
In addition, banking can be a highly political environment, rewarding those who
develop not only technical expertise but interpersonal savvy. As such, recruiters
will typically favor candidates with a proven track record of building relationships
in a number of different environments—academic, professional, and
extracurricular pursuits—who are comfortable managing both upward and
downward.