- Investment Banking Interview Prep
- Sales and Trading Interview Prep
- Corporate Banking Interview Prep
- Stock Pitches Prep
- Brain Teasers Prep
The finance interview is an unpredictable process that fairly or unfairly decides which business students will have the best start to their finance careers via investment banking or sales & trading placements at major banks (as well as some prominent direct-to-private equity analyst roles at megafunds such as Blackstone, KKR, Silver Lake, and Apollo).
Investment banking interviews can be extremely random, and there is a very large element of chance inherent within each interview which depends on performance, unique circumstances of the day, interviewer and cultural fit. However, given a large enough volume of interviews and good preparation, there is a high probability of securing a job.
Accordingly, the optimal strategy is to:
- Land as many interviews as possible
- Be as prepared as reasonably possible for technical questions
- Have a tolerable personality
- 1 Landing an Investment Banking Interview
- 2 Off-Cycle Investment Banking and Finance Recruiting
- 3 Investment Banking Phone Interview
- 4 Investment Banking In Person Interview
Landing an Investment Banking Interview
Being shortlisted for investment banking interview is a function of these variables (they are often interlinked), in no specific order:
- Work Experience
The top three must be articulated through a well formatted, one-page resume that is free of grammatical errors. Contrary to popular belief, the weight of a strong profile does outweigh a resume with errors on it, however it is best to avoid chance. Despite the abundance of literature on the internet on how to prepare a resume, the number of bad/inappropriate resumes that enter corporate mailboxes is staggering.
Within each category, there are variables that can and cannot be controlled.
Schools – For schooling, investment banks have had longstanding relationships with Ivey, Queen’s and McGill. Other schools have strengthened their career centres, but the majority of spots will go out to undergraduates from the aforementioned three schools regardless of region. The grading scheme also favors Ivey students, as the average mark at Ivey is the 75th percentile at most other schools. These schools have on-campus recruiting from all Bulge Brackets, many elite boutiques and have very strong recruiting teams from each Big 5 Canadian bank.
The trading floor prefers quantitative majors and is more open to engineers and mathematicians. Waterloo places very well there.
Work Experience – Relevant (finance) work experience or large brand names (McKinsey, Bain, BCG, Google, Facebook) will almost guarantee an interview even if GPA is below par, although if there is a prestigious previous placement and no return offer, this will come up as a question.
As such, 2nd year spring internships at Bulge Brackets are coveted – however, getting a decent position in a summer before junior/3rd year often depends on connections.
New York and London will add the most points to a resume, followed by Toronto and any other major US city. Emerging markets work experience is less highly regarded, but major brand names will still hold water.
Grades – GPA is important when the process is actually competitive, although not all interview processes are structured to be competitive. When it is an interview granted purely on academic merit, the equivalent of 80% (A-) is required to get an interview at most banks and 83-85% (A-/A) is required for the jobs with the most applicants.
Skew for grades is also considered – a 78% average with 90+ in finance and mathematics courses with 50s in Earth Science will be looked at more favorably than an 82% that is pulled up by humanities classes. Also, a very high 3rd or 4th year average may also be looked upon favorably. Skew is positive when the upper bound is comprised of relevant classes.
By the same logic, high GMAT scores are also helpful as they are a proxy for raw intelligence.
Network – Family connections are by far the most important, but this is a variable that cannot be controlled. Building connections through student participation in finance clubs, especially those with a legacy of placing students in high finance jobs, is the best way to do this. Poor GPAs may be ignored if students are President of the finance club or place well in an investment banking case competition.
Off-Cycle Investment Banking and Finance Recruiting
Banks sporadically hire at the analyst and associate level to replenish losses from attrition and firings as well as for expanding or starting a new team.
When recruiting off-cycle, the process is even more random and far more dependent on the network and work experience variables noted above. 50% of the time, job postings for analyst and associate will not show up on job boards or even the company’s internal jobs page. Instead, interviews will be granted to these four candidate buckets:
- Candidates who have reached out to VPs and MD’s via coffee chats
- Friends of current analysts and associates
- Headhunter referrals (for experienced hires, rarely entry level or Year 0 analysts)
- Internal candidates
As such, the best way for a candidate to position themselves for an interview is to reach out to multiple bankers continuously and diplomatically. Each impression needs to be polished, as word spreads quickly and aspiring bankers may find themselves blacklisted.
The greatest window of opportunity is between 0 to 1.5 years after graduation, as these candidates are good year 0 investment banking analyst candidates. Afterwards, there needs to be sufficient work experience in corporate finance to justify an experienced hire spot (year 1 or year 2 analyst). After 3 years out, chances become very slim, although investment banks will offer leeway to internal candidates.
The ideal candidates for investment banking are corporate finance professionals at Big 4 accounting firms, analysts at private equity firms and equity research. Sales & trading looks for buy side firm analysts and internal market risk employees (with strong quantitative skills).
For associates, investment banks will hire from private equity funds and Big 4 corporate finance teams – however, candidates will lose a promotion – as in a VP from Deloitte will start as an associate.
Investment Banking Phone Interview
The phone interview is usually reserved for out of town candidates and will be conducted with junior staff (analyst/associate) most of the time. However, sometimes an MD will join the call if the process is accelerated.
The phone interview is easy to prep for – candidates should have a print out of common behaviorals and technicals and practice before the interview.
As a side note, it is common misinformation that once a candidate lands an interview, everyone is equal regardless of how poor they rank in the screening process. This is a falsehood – any weaknesses pertaining to grades, school and work experience will be attacked and it is an upwards battle, especially if strong junior team members take on an immediate unfavorable bias as they perceive a lack of meritocracy in the process.
As far as interviews go, phone interviews will not be as in-depth technically as these concepts are more difficult to communicate over voice alone. Questions should focus around fit, especially pertaining to why investment banking and why that office. The idea is that if the bank likes the candidates, it is then worthwhile to fly them over for an in-person interview.
Sometimes the phone interview is an HR screen and most questions will be behavioral. However, for some elite boutiques, the HR has been instructed to ask technical questions as well, which may mix up unprepared candidates.
Investment Banking In Person Interview
Investment banking interviews are usually multistage, with analysts and associates (the occasional Vice-President) conducting the first round, although it is not rare to see an MD make the trip out.
First Round Investment Banking Interview
The first round is usually on campus, and will be two rounds of 30 minutes to an hour. The junior staff will tend to ask technical questions while the relatively more senior staff will focus on fit – primarily work experience and why banking. Success in both also require the candidate to come across as an OK person.
Although MDs will ask fewer accounting and academic finance questions, they are big fans of asking open ended market questions that test a candidate’s thought process and general macroeconomic awareness.
“What sector would you bet on right now?” and “Where do you see the economy going?” do not have a wrong answer, provided that the reasoning is supported by evidence steeped in industry knowledge.
Second Round Investment Banking Interview/Superday
The second round is a half-day or all-day process which most bankers refer to as the Super Day. Candidates will meet over 10 bankers throughout the day back-to-back with some banks offering a candidate reception after (which is also an interview). The questions to be expected should be in the same format as the first round.
The candidate reception is meant to screen candidates for professionalism and maturity. Bankers are looking for social candidates who are pleasant to be around with a good sense of discretion. Bankers, assisted by HR, note which candidates were smiling and listening to their peers and bankers (as they would with a client), drinking moderately and not trash talking other candidates.
Sometimes HR will put in esoteric tests such as a bucket with only two lobster tails and 10 candidates – rest assured that whoever takes a lobster tail will be +1 lobster and -1 job opportunity. The idea behind this test is to screen out discourteous candidates or candidates who are carried away by the glitz of the occasion.
Final Round Investment Banking Interview
After the Super Day, offers are either handed out that day/next day (otherwise rejection/waitlist) or final candidates are brought back for a panel interview or one-on-one interview that involves the Group Head/primary Managing Director that they may work under. This is a formality and once more a candidate only has to come across as an OK person without obvious red flags.
At most banks, technical questions will be looked at on a gradient with a soft pass-fail where performance is judged relative to other candidates. Prestigious banks ask tougher technical questions and will cut anyone who does not have a strong grasp of corporate finance.
However, there is much more leeway in “failing” the technical interview as opposed to the behavioral interview. If a negative impression is made and a banker does not like the candidate, that process is over unless there is an override from someone more senior.
Post-interview, it is best practice to send a thank you email with a tailored response to the conversation shared between each particular banker. However, from anecdotal experience, failing to follow-up has never influenced a hiring decision, but it is important to follow-up for the candidate’s own mental health as sometimes bankers forget to reject candidates.