"Why Investment Banking?" Complete Guide to Interview Answer (2024)

Home

>

Resources

How to craft a compelling answer to this interview question

"Why Investment Banking?" Complete Guide to Interview Answer (1)

By Mike Hinckley

Expert Bio

Table of Contents

    Add a header to begin generating the table of contents

    One of the most common interview questions asked during your interviews for a role in investment banking will be, “why investment banking?”

    If you want to ace this interview question, there are some things to remember during your answer.

    However, before we get into those considerations, first let’s look at the benefits and challenges of a career in investment banking.

    Benefits of investment banking career

    Financial reward

    Investment bankers make approximately $66,000 annually, but this varies widely by firm and region.

    Work perks may appeal to you as well as money. For example, investment bankers have several benefits besides high pay – including meals, travel, and high status (!!).

    This might be pleasant if you’re well-compensated through pay, bonuses, perks, and stock ownership.

    Steep learning curve

    I used to say that there is no job that gives so much responsibility to young professionals from such a young age. From Day 1, you are getting to contribute to multi-billion dollar deals. That’s pretty cool!

    And, most importantly, it provides lots of opportunity for growth and learning! You essentially get a two year bootcamp in:

    • Financial modeling
    • Quantitative analysis
    • Communication via slides
    • How to be a professional
    • And many, many other lessons

    Work with ambitious and interesting people

    Investment banking offers opportunities for ambitious people, so ambitious and interesting people go into it.

    On the job, the people you’ll meet and work with will be knowledgeable and passionate. Being in a workplace with like-minded people is one of the most rewarding parts of banking!

    Cohort of young people

    An underrated advantage to starting an investment banking career is that you get to make friends and bond with a whole cohort of people your age who you start working with at the same time (e.g. analyst or associate class).

    I made some of my best friends in life in investment banking. This was truly one of the most enduring and best parts of my experience in investment banking.

    I know many others who say the same.

    Exit opportunities

    This is one of the biggest perks of the “two year bootcamp” that is investment banking. Many employers in all kinds of industries appreciate the training and learning that comes in investment banking from an early age.

    It’s not uncommon for investment banking hires to have great exit opportunities in:

    • Private equity
    • Growth equity
    • Hedge fund
    • Venture capital
    • Software & fintech
    • Startups generally
    • Corporate development
    • And many other careers

    (Article continues below)

    "Why Investment Banking?" Complete Guide to Interview Answer (2)

    • 24 lessons
    • 6+ video hours
    • Expert instructor

    ONLINE COURSE

    Assess Business Models Like An Investor

    Designed for aspiring private equity, growth, or venture investors

    Learn More

    Drawbacks of investment banking career

    Every job has downsides. Investment banking is rewarding, but it requires sacrifice.

    High workload

    Though it’s gotten more reasonable over the years for junior hires, let’s face it, investment banking is still quite demanding. This means work weeks that far exceed the 40-hour workweek (e.g. 70 or 80 hours per week).

    Inability to plan

    I’ve always said that the hardest part of my own investment banking experience was not the long hours, but rather the unpredictability, which means an inability to plan.

    In some ways, I was happiest when I was working long hours because I gave up on the hope of trying to make social or life plans. Whenever I had a modicum of free time at work, I’d make a plan, which often was disrupted (and led to disappointment).

    In some ways, though, this is what investment bankers get paid to do – be available at all times and prioritize work above all (most) else.

    Client service

    As an investment bank, you provide a service to your clients (e.g. debt or equity issuance, M&A advice, etc.).

    Since most banks are staffed with smart and highly competent people, it’s difficult to standout to your clients (who often have many banks competing for their business).

    That means that to standout to your clients you often need to be ready at the drop of a hat and you need to do work that may not lead to any tangible outcome (e.g. a pitch that is low likelihood of resulting in a deal).

    After the thrill of working on your first couple pitches, it can start to wear you down to work on things that are purely for “client service.”

    Answering the “why investment banking” interview question

    Some generic themes to draw on for your answer to “Why Investment Banking” could include:

    • Fast-paced environment
    • Exposure to high profile transactions
    • Surround myself with intelligent and motivated people
    • Valuation & financial modeling work
    • Steep learning curve
    • Passion & love for finance

    While these answers are not inherently wrong, you should opt for a more stand-out reply that will distinguish you from other applicants.

    However, the KEY to answering this question is making the answer authentic to you. Further, you need to make sure you answer what the interviewer is really trying to figure out, which is:

    • Are you ACTUALLY interested in this job?
    • Have you done your homework about what this job is and what it entails?
    • Have you wanted to do this job for awhile, or is this a new thing for you (more likely to quit)?

    To help you craft the perfect answer for you, I recommend the following formula:

    How your interest in IB started + Excitement for IB’s benefits + Awareness of what the job’s challenges

    In each of these components, you should also try to combine your answer with experiences in your background to make it more believable and impactful.

    Example “why investment banking” answer

    Using the formula above, here’s a sample answer to “why investment banking”:

    I’ve been extremely excited about since my sophom*ore year, when I became the VP of the Finance Club on campus. Since then, I’ve tried to learn as much as I can about finance by not only getting more involved in the club, but also taking finance courses and doing reading on my own. (I’d be happy to share more about what I’ve taken.) I’m excited to take my valuation and corporate finance learning to the next level by jumping into investment banking.

    I also think it’ll be an excellent environment to learn because it’s fast paced and analysts get a lot of responsibility from Day 1. I played varsity basketball in high school and in college, so I love opportunities to take on leadership and responsibility in teams.

    Finally, I know that investment banking can be demanding and long hours. I’m sure it’ll be challenging at times, but I’m actually looking forward to a challenging work environment, especially as a younger professional. As I said, I want to learn as much as possible as quickly as possible, so I’m excited for that part too.

    Things to avoid in answering “why investment banking”

    In your answer, you should be sure to avoid the following:

    • Make lots of money
    • Attractive exit options

    While these indeed may be attractive, by including these in your answer you are showing your interviewer you lack the “finesse” or situational awareness to avoid this landmine.

    • Articles in Guide

    ▾ 🚀 Break Into Investment Banking

    Why Investment Banking?

    Investment Banking Recruiting

    Best Schools For Investment Banking

    HireVue Interview

    Superday

    Investment Banking Interview Questions

    Investment Banking Books

    • More Guides

    ▸ Break Into Growth Equity

    ▸ Break Into Venture Capital

    ▸ 🚀 Break Into Private Equity

    ▸ 📗 Primer: Growth Equity

    ▸ 📗 Primer: Private Equity

    ▸ 📗 Primer: Investment Banking

    DIVE DEEPER

    The #1 Online Course for Growth Investing Interviews

    "Why Investment Banking?" Complete Guide to Interview Answer (5)

    • 63 lessons
    • 13h video
    • Templates
    • Step-by-step video lessons
    • Self-paced with immediate access
    • Case studies with Excel examples
    • Taught by industry expert

    Learn More

    Get My Best Tips on Growth Equity Recruiting

    Just great content, no spam ever, unsubscribe at any time

    "Why Investment Banking?" Complete Guide to Interview Answer (2024)

    FAQs

    Why investment banking interview question answer? ›

    Specifically, investment banking interests me because it offers the opportunity to develop substantive analytical skills, while developing a close network of colleagues. While working long hours is scary to some, to me, it is in a strange way exciting.

    How do you stand out in an investment banking interview? ›

    Investment banking recruiters look for relevant skills and experience that demonstrate you're capable of handling the job. Highlight transferable skills, such as teamwork, communication, or analytical abilities. Showcase relevant experience, such as internships or relevant coursework.

    How to pass an investment banking interview? ›

    Preparing for an investment banking interview requires a lot of preparation. Before going into an interview, research the particular bank, familiarize yourself with the deals it has done in the past or is currently working on, and be prepared to talk about the economy and financial markets.

    What is unique about PWP? ›

    We pride ourselves on talent, integrity and intellect. Our team consists of exceptional individuals who, through collaboration and sharing of diverse perspectives and experiences, formulate unique solutions to help our clients address complex strategic and financial challenges.

    How to answer why JP Morgan? ›

    Reputation: JPMorgan Chase is a highly reputable and respected company in the financial industry. Working at such a well-established and successful organization would provide me with valuable experience and opportunities for growth.

    What motivates you to get an investment banking interview? ›

    An example answer to the “Why Investment Banking?” question

    Here is an example 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.

    What is your weakness investment banking interview? ›

    Be Real, But Not TOO Real – Pick something that is a real weakness, but which is not a “deal-breaker weakness.” For example, you could say that you sometimes take too long to make decisions, which makes projects take more time. This weakness could affect your performance, but it won't kill you.

    What is your greatest strength investment banking interview? ›

    Here are some tips for answering this question: Choose two or three strengths that are relevant to investment banking. Some examples of strengths that are valued in investment banking include analytical skills, problem-solving skills, attention to detail, communication skills, and teamwork skills.

    How to impress an investment banker? ›

    Impress the person you're speaking to by being charming, respectful, knowing their work experience, and asking thoughtful questions. Learn about any potential opportunities, the status of recruiting processes, or any advice to succeed in the interview.

    How many rounds of interviews is normal for investment banking? ›

    Investment banks typically hold two rounds of interviews, although some hold more than this. The first round usually takes the form of a telephone interview or video interview. Questions about your motivation for applying often feature heavily in this initial interview.

    How hard are investment banking interviews? ›

    Investment banks now expect candidates to possess detailed technical knowledge of accounting, finance, valuation, and M&A and LBO modeling. There are no “shortcuts” to mastering these topics; you need to put in the time to read, learn, and practice, or you won't stand a chance against candidates who have.

    What is the final round of interview for investment banking? ›

    The “Superday” is the last stage of the interview process for investment banking analyst and associate roles. After a successful superday, the next step would be receiving an offer letter. This is the capstone of the entire interview process, which includes: A phone screen.

    Why is PWP important? ›

    The PWP workforce provides short-term, evidence-based treatments in line with NICE guidance to help people manage their symptoms. As PWPs, we work with people to equip them with the tools and techniques they need to manage anxiety and depression effectively and work towards their goals.

    What is the importance of PWP? ›

    The success of the psychological wellbeing practitioner (PWP) role is resulting in increased numbers of Senior PWP roles with management or supervisory responsibilities within improving access to psychological therapies services alongside opportunities to specialise or champion under-represented groups.

    What questions should I ask in a PWP interview? ›

    3 interview questions with sample answers
    • What do you think a psychological well-being practitioner does? With this question, an interviewer examines your knowledge of what the role entails. ...
    • Why do you want to be a psychological well-being practitioner? ...
    • What actions might you take if a patient disclosed suicidal intent?
    May 30, 2023

    What is investment banking and why is it important? ›

    The primary goal of an investment bank is to advise businesses and governments on how to meet their financial challenges. Investment banks help their clients with financing, research, trading and sales, wealth management, asset management, IPOs, mergers, securitized products, hedging, and more.

    Why are you interested in finance? ›

    I'm drawn to finance because it provides a comprehensive understanding of an organization's financial health, risk management, and investment decisions. By pursuing a career in finance, I can strengthen my ability to analyze financial data, provide strategic insights, and guide organizations towards sustainable growth.

    Why do you want to work in M&A? ›

    Working in M&A allows you to participate in extremely strategic operations for companies. If you work in Large Cap (on the biggest deals) you are likely to find the deals you have worked on in the economic and financial press. As you can see, the job of an M&A analyst offers many challenges.

    References

    Top Articles
    Latest Posts
    Article information

    Author: Arline Emard IV

    Last Updated:

    Views: 5369

    Rating: 4.1 / 5 (72 voted)

    Reviews: 87% of readers found this page helpful

    Author information

    Name: Arline Emard IV

    Birthday: 1996-07-10

    Address: 8912 Hintz Shore, West Louie, AZ 69363-0747

    Phone: +13454700762376

    Job: Administration Technician

    Hobby: Paintball, Horseback riding, Cycling, Running, Macrame, Playing musical instruments, Soapmaking

    Introduction: My name is Arline Emard IV, I am a cheerful, gorgeous, colorful, joyous, excited, super, inquisitive person who loves writing and wants to share my knowledge and understanding with you.