Becoming an investment banker is not an easy task. After several years of study, an internship, and three years of practice as a financial analyst, there is one more step before you can finally start to work: the job interview!
While your preparation is crucial to be able to impress the recruiters, it is not enough. If you really want to ace the interview, you have to be ready to effectively answer any question that might come up. And there is no better way to do that than trying to predict and practice the most popular questions.
How can we do it?
Well, today, you’re in luck because I’m going to share with you the most common Investment Banker Interview Questions!
What Does an Investment Banker Do?
The main role of an investment banker is to provide financial information and services to companies, individuals, and government clients. While the duties might vary depending on the company you work for, the main responsibilities of an investment banker are:
- Advising the clients on the best strategy to reach their financial goals
- Buying and selling financial products on behalf of the clients
- Develop short and long term financial plans, and modify them according to the market conditions
- Keeping themself up to date with new market trends
- Conducting extensive research to quickly detect new market opportunities
- Assist companies with Merger and Acquisition
Even if the list is far from being complete, expect the recruiters to test your specific knowledge on most of these duties.
The other areas where the interviewers will spend a lot of time are your skills, your working experience, and your educational background.
Let’s find out a bit more about these requirements…
Holding a bachelor’s degree in finance, mathematics, or any relevant field, is the bare minimum to get a job as an investment banker. If you don’t have any work experience, expect to start your career as a financial analyst. Eventually, you will be able to move to a better position after three years of practice.
The most prestigious firms require you to have a master’s degree in finance or investment management. While it isn’t always a mandatory requirement, this will give you a clear edge over other candidates when the opportunity for career advancement arises.
Hard skills are those qualities that are strictly inherent to the position you apply for. Not only are they obviously different based on the job, but also they will be specific to the company you’re interviewing for. To verify what hard skills an employer is looking for, carefully read the job description and research the company.
Here are some of the hard skills that any investment banker should have, regardless of his specialization:
- Math and analytical skills
- Three years of proven experience of working in investment banking
- Proficiency in Microsoft Office products, especially Excel
- Familiarity with all the midst common investment tools
- Ability with financial modeling
At the other end of the spectrum, we have soft skills, which are related to our personality and our interpersonal qualities.
While an interviewer can easily assess your hard skills by looking at your CV and asking a couple of questions, soft skills are not measurable. Therefore, many recruiters decide to dedicate a large part of the interview to soft skills.
Let’s find out which ones are the most important:
- Willingness to work long hours under pressure
- Time management
- Ability to meet tight deadlines
- Stress management
How To Prepare For The Interview?
How can you use this information when you get ready for the interview?
There are four steps you should take if you want to impress the recruiters.
1 Review the job posting
The job posting should contain all the information about responsibilities and prerequisites and should mention any extra requirements that are specifically requested by the employer.
When a job posting is well written, it says everything you need to focus on to be ready for the interview. Make sure you read it carefully, and you don’t neglect any of the information provided.
2 Research the company
Having at least a general knowledge of the company you’re applying for is crucial to be able to answer some questions that you’re likely to be asked. If you don’t know anything about them, what will you tell them if they ask you why you want to work there?
Moreover, having a clear understanding of what market they are targeting, will dramatically restrict the possible topics you will have to talk about.
3 Prepare your answers to the most common questions
Once you know exactly what the company is looking for, you can start working on how you can reply to the most common questions. As you prepare any answer, your main goal should be proving that your skills match the requirements.
Sometimes the recruiters might ask you to provide an example from your working experience where you had to use a particular skill. To give a complete and effective answer, use the STAR method: define the Situation, illustrate your Target, explain your Actions, and describe the Result.
4 Practice your answers
When you practice your answers, do it in front of a mirror or using a voice recorder or one on your smartphone.
However, don’t try to memorize them, or you will look like you’re reading a script. The more natural your answer will be, the more convincing it will sound!
Most Common Investment Banker Interview Questions
Let’s wrap everything up by taking a look at some of the most common questions and at what the recruiters are expecting from your answers.
How would you explain to a client what a cash flow statement is?
Communication is one of the top skills that an investment banker should possess. Your ability to explain a complex concept to somebody who is not familiar with it is key to make your clients understand and agree with your financial strategy.
Therefore, forget the technical terminology and the definitions that you’ve learned from the books, and focus on delivering with simple words the most important aspect of the topic.
What is WACC, and what’s the formula to calculate it?
This is a great example of a technical question that requires an opposite answer from the previous one. Here you have to imagine that you’re still at university, sitting in front of the professor during an exam.
Using the appropriate vocabulary is mandatory, and there should be no hesitation in giving the correct formula, especially for a basic question like this one.
Can you tell us about one time when you proved your leadership?
Did you include ‘leadership’ as one of your strengths on your resume? Perfect! This is exactly what the employer is looking for, but now it’s time to prove it.
Use the STAR method to elaborate your answer, and make sure you keep it relevant to the job. When the recruiters ask these kinds of questions, they’re not interested in your personal life. Therefore, pick your example from your professional career or, if you just graduated, from your educational background.
Why did you choose a career in investment banking?
Investment banking is a profession that requires strong motivation and complete commitment to the job. Especially at the beginning, there are moments when you might have to be available 24/7, and the recruiters want to understand if you’re the right person to work in these conditions.
Show them that you’re determined to do whatever it takes to reach your professional goals and that you have a clear roadmap to get there.
Why should we hire you?
With this question, the recruiters want to understand how well your skills match the requirements. Other similar questions that require almost the same answer are:
- What’s your biggest strength?
- What makes you stand out from the other candidates?
- What makes you unique?
It’s time to brag about your professional achievements! Obviously, you don’t want to sound too arrogant, but your confidence has to come out clearly.
Provide examples of situations where you proved you possess the fundamental skills that we talked about in this article and show them how you will be beneficial for the company. Use numbers and details to highlight the positive results of your professional career.
Thinking of Applying for a Bank Position Online?
Then you should enjoy our in-depth look at the Fifth Third Application, the Capital One Application, the BBT Application, the PNC Application, the TD Bank Application, the Citibank Application, the Bank of America Jobs Application, the Chase Application, and the Wells Fargo Application.
Or, if you’re looking for a complete guide to interview for high-level banking positions, take a look at the Bank of America’s Investment Banking Vice President Interview Preparation Study Guide, as well as their Personal Banker Interview Preparation Guide and the Relationship Manager Interview Guide.
Or, if you want to know exactly what a Personal banker does, check out our Personal Banker Job Description.
I also really recommend the following books to anyone with some high-level interviews coming up shortly, Interview Like A Pro, How to Create Positive Impressions, or the excellent Tough Interview Questions For Dummies.
Even though a job interview will always be stressful, with a bit of preparation, we can make the whole process quite a lot easier. And this is especially important when you’re interviewing for an investment banker position, where your confidence and ability to manage stress might determine whether you land the job or not.
Today I’ve gone through exactly what you should do. If you follow the four steps listed in this article and you do the preparation for the most common Interview Questions for Investment Bankers, the moment you sign the contract will be a bit closer.
All the very best with your interview!