Why Investment Banking?
How to ace this authoritative consultation question
Updated November 30, 2019
Reading: Why Investment Banking?
The “Why Investment Banking?” interview question
You ’ re about guaranteed to be asked this interrogate in an investment bank interview. Of all the jobs you could have out of university, why investing trust ?
The key is to cursorily demonstrate that you ’ re bright, that you understand what the job entails, and, having a wide view of what ’ second required, you distillery in truth want to do it !
At the conclusion of the day, investing banks want Analysts/Associates who are –
- Smart enough to do good work;
- Can handle the hours;
- And won’t quit.
This usher will show you how to demonstrate the above three qualities in a concise way .
An example answer to the “Why Investment Banking?” question
here is an model of how to answer the question concisely :
I want to work in investment banking because it’s the fastest way to learn financial modeling, valuation, Excel, and to understand the nature of large corporate transactions. I’m aware that the job has a strict hierarchy and very long hours, but the opportunity to gain such valuable skills and be exposed to high profile transactions so early in my career is the most exciting opportunity I can think of.
The strong points from this answer include :
Read more: Top 12 interview questionnaires in 2022
- Awareness of the skills required for the job (a lot of time spent in Excel, Word, and PowerPoint)
- Awareness of the hierarchy (senior bankers will lean hard on junior bankers and all work rolls downhill)
- Awareness of the long hours (80+ hours per week)
- Excitement about a steep learning curve and exposure to high profile deals
Positive reasons why you want to go into investment banking
Valuation & financial modeling work
investment deposit offers the opportunity to become an expert at building boastfully, complex fiscal models at the earliest stage of your career. While bankers aren ’ metric ton inevitably great investors, they do spend a bunch of time on valuation employment, and this can be an excellent way to start your career .
Exposure to high profile transactions
Most of what bankers work on is top secret until it ’ mho publicly announced, and when it is last announced, then it ’ sulfur normally on the front foliate of the commercial enterprise section. If you say something to this effect, it will probably stroke the self of the interviewer, and it expresses a reasonably compelling rationality to go into the diligence .
An extreme challenge and steep learning curve
If you can call out the fact that IB requires extremely hanker hours and you ’ re actually motivated by the challenge, that will go a farseeing means toward making you an appealing job candidate. It ’ south helpful to draw parallels to your personal animation, such as competing as an elect athlete, musician, or in some highly challenge event ( like climbing Mount Everest ) .
Negative reasons why you want to go into IB
Doing it for the money
even though the money is most probable a huge motivation for you, it ’ s not a good mind to say that you ’ re motivated by how a lot money bankers make. It may be true, but most people find it distasteful, thus keep off saying that .
Doing it as a stepping stone to something else
This may besides be true, but you should avoid saying anything about ultimately wanting to get into private equity or hedge funds and thinking that IB is a capital way to get here. When a company hires you, they want to think that you will stay with them .
One of the peak reasons that investment bank may in truth be the job you want is the feel and photograph to fiscal model. Analysts and Associates have the opportunity to work on building assorted types of fiscal models for authoritative transactions, which would never happen in most other jobs straight out of university. Yes, new bankers have to do a draw of in truth mundane things ( like print and bind pitchbooks, make son edits, etc. ), but they besides get to learn one of the most sought skills in finance .
Screenshot from CFI ’ s M & A Modeling Course.
Read more: Top 3 question that ask in interview in 2022
More career resources
Thank you for reading CFI ’ s template to answering the “ Why investment banking ? ” consultation question ! If you ’ rhenium looking for a job in IB, then be surely to check out our guide on how to get a occupation in investment deposit. It contains tips on network, writing your screen letter and resume, and information on technical skills that are required .
once you ’ re set on a job in IB, you can actually ace an interview by being super potent technically. The best way to obtain the necessity expertness is through our fiscal model and valuation courses. We ’ ll teach you how the pros build evaluation models from incision !
More resources include: