Breaking into Investment Banking

Investment banking is one of the most sought-after and famous careers in the finance world; however, many students entering university don’t actually understand what it is or how to break in. We have interviewed multiple students from the Class of 2028 who landed jobs in Canada and the US during the 2027 recruitment cycle to gain valuable advice. This article will run down what a career in investment banking looks like and how to recruit for it.

What is Investment Banking?

Before we dive into the long recruitment process, we need to know what investment banking actually is. At its simplest, investment banking is the architect and matchmaker of the corporate world. While the commercial banks you use every day deal with individuals and small businesses, investment banks deal with massive corporations, governments, and institutional investors. If that sounds vague, investment banks generally do two things: raise money and give advice. Investment banks help raise capital through vehicles such as Initial Public Offerings (IPOs) and debt issuance, including helping a company sell bonds to investors. They also handle Mergers and Acquisitions (M&A) by conducting valuations, negotiating, and developing strategies. All of this matters because, without investment banks, the economy would move more slowly. They provide the tools that enable the world's largest companies to take risks, expand, and innovate.

Recruitment Timeline

Before discussing academics, networking, and interviews, it’s critical to understand the investment banking recruitment timeline. As the job market gets increasingly competitive each year, internship postings are released further and further in advance. Recently, top firms have been releasing summer job applications almost a year and a half in advance. This means you will apply for third-year summer internships halfway through your second year at university. In your first year, you can get ahead by joining clubs and finding smaller, transferable work experience for your resume. Once your second year hits, you should already have a good feel for the industry and be conducting multiple "coffee chats" a week with people from your target companies. Around the winter of your second year, apply to as many openings as possible. An incoming Evercore analyst in New York remarks, “Applying to as many firms as you can is important to reach as many opportunities as possible.” After this “main event,” if you haven’t landed a job yet, the world isn't over. Off-cycle openings still occur during the fall and winter; however, you may have to take a semester off from school, and return offers can be less common. If you haven’t received a return offer by the end of your third or fourth year, full-time recruiting opens during this time. Hopefully, by then, your coursework will have lightened up so you can focus on your desired career in finance.

How to Start

Before a candidate can network or even interview, they need a resume that clears the initial automated filters, which often weed out hundreds or thousands of students. In terms of academics, having a GPA of 3.5 or above is generally the rule of thumb. While not a hard cap, investment banking tends to seek high-achieving individuals, and grades are the first sign of work ethic. As mentioned above, extracurricular experience is always required, and clubs are the perfect way to check that box. Look to join your school’s finance-related organizations, as they will help you with every stage of recruitment. This also demonstrates leadership and a genuine interest in finance. Participation and high placements in case competitions can also help you stand out and showcase real knowledge. Regarding the resume, your club or other connections should be able to show you the proper formatting. Include any relevant coursework in which you have succeeded, such as accounting, finance, and economics. Separate professional work experience from extracurriculars, and use action verbs along with quantifiable results. That is all for what you can do at school, so let’s move on to networking.

Networking

If you are interested in business, you have probably heard buzzwords like "networking" and "coffee chats." In any field, the resume gets you through the initial screening, but the coffee chat gets you the interview. In a conversation with an incoming TD investment banking analyst, he said, “Networking is key to getting the interview; you won’t get one without it.” This is especially true today, as up to one thousand applicants may vie for positions at the "Big Five" Canadian banks. At any school, there should be alumni working in finance whom you can reach out to via LinkedIn or email. Try not to sound desperate and keep your email formatting professional. In these half-hour conversations, try not to sound “transactional”; you are taking up their valuable time, so they deserve respect. Nobody wants to chat with pushy or arrogant people. After the chat, there should always be a follow-up to say thanks and keep in touch. CRMs or spreadsheets are perfect for tracking coffee chats and the network you have built within a company before even working there. An Evercore investment banking analyst says that “the network you build through chatting with people at the firms you want” is one of the most important parts of recruitment.

Interviews

If all goes to plan, and with a little help from luck, you will get a first-round interview. Most finance interview processes involve multiple rounds, possibly including a "Superday," which consists of several short interviews in a single day. There are two main sections in an interview. Behavioural questions are usually first; these are used to assess your personal experiences, personality, and knowledge of the company. Make sure to memorize your answer to “Tell me about yourself,” as that question is asked in almost every interview. Creating a document that holds answers to various behavioural prompts is a good way to practice. Next are the technicals, where most applicants fail to prove themselves. Technicals are accounting or valuation-related "hard skill" questions that you need to answer quickly, sometimes without a calculator. Questions such as “Walk me through the three financial statements” and “Walk me through a DCF” are common. Applicants typically spend the most time on this, and practicing with friends is a fun way to improve. School finance clubs typically have documents containing many technical questions for you to practice. In the final round, there may also be an Excel component where you must showcase your abilities with the platform. Above all else, “interpersonal skills are how you convert that interview into an offer” (TD analyst). Seniors at the firm will assess you based on your personality, tone, and presentation. A candidate must ask themselves, “Would a Managing Director (MD) want to be stuck with me in an office all day?” This means you shouldn't sound robotic and should dress well, from your hair to your suit.

Playing the Game

There is no debate: you will get rejected, probably 99 percent of the time. This doesn’t mean you should give up; resilience is key in finance, and rejection is not the end of the road. The Big Five banks are not the only firms hiring students. Look for smaller boutique firms that can still offer great experience and pay. Besides investment banking, there is FP&A, asset management, wealth management, real estate, and more. There are limitless opportunities to which your application preparation applies.

What It Will Look Like

Most students see the six-figure salaries and immediately get excited. The harsh reality is that in order to earn those checks, you are required to work very long hours. At the most demanding banks, weeks of over 100 hours are common, which can mean working six days a week from 9:00 AM to 3:00 AM. This isn’t for everyone, so make sure to consider this before starting your recruitment journey. As an analyst, you will do a lot of the “grunt work.” This usually includes pitch decks, financial modelling, and data room management. The hierarchy at a firm typically moves from Analysts to Associates, to VPs, to Directors, all of whom report to MDs. At any stage, attention to detail is paramount; a single typo in a multi-million dollar valuation can be a fireable offence. This is all intimidating, but if you can get through the first few years, life generally gets easier as you move up the ranks.

Exit Opportunities

In corporate North America, “loyalty” is rapidly disappearing. Investment banking is often viewed as a two-year evaluation period. Most analysts now leave after their initial contract for more specialized and better-balanced roles. Exit opportunities, such as Private Equity (PE), are appealing for the potential profit-sharing and a seat at the decision-making table. Hedge funds are also popular for their fast-paced environment and immediate market feedback. Corporate Development (CorpDev) provides a better work-life balance, often 9-to-5, while still allowing you to work on big deals. Finally, there is Venture Capital (VC) and startups, where you invest in early-stage companies or take on a role like CFO. Some people know they want to leave after the first few years; however, some wish to be career bankers and climb the ladder. It is completely up to the individual, as the pivot is a significant life decision.

Conclusion

In the end, investment banking isn’t for everyone, but as detailed above, there are hundreds of other finance-related opportunities. Resilience is key, and you shouldn’t let your job dictate the entirety of your life. While technical skills are important, interpersonal skills carry the weight that actually lands the job. Remember that networking is essential, and you shouldn’t just blindly apply to firms. Make an effort to have fun with the recruitment process so you don’t end up in the "corporate depression" that leads many to leave finance altogether.