Why Investment Banking?

How to ace this important interview question

The Why Investment Banking? interview question

You’re almost guaranteed to be asked this question in an investment banking interview.  Of all the jobs you could have out of university, why investment banking?

The key is to quickly demonstrate that you understand what the job entails, and, having a full view of what’s required, you still really want to do it!

At the end of the day, investment banks want Analysts/Associate who are:

  • Smart enough to do good work,
  • Can handle the hours,
  • And won’t quit.

This guide will show you how to demonstrate the above three qualities in a concise way.

 

Why Investment Banking interview question

 

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 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 strongpoints from this answer include:

  • Awareness of the skills required for the job (lots of time spend 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 banking offers the opportunity to become an expert at building large, complex financial models at the earliest stage of your career.  Why bankers aren’t necessarily great investors, they do spend a lot of time on valuation work, 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’s publicly announced, and when it is finally announced it’s usually on the front page of the business section.  If you say something to this effect it will stoke the ego and it’s a pretty compelling reason to go into the industry.

An extreme challenge and steep learning curve

If you can call out the fact that IB requires extremely long hours and you’re actually motivated by the challenge, that will go a long way.  It’s helpful to draw parallels to your personal life, like competing as an elite athlete, musician, or some extremely challenging event (like climbing Everest).

 

Negative reasons why you want to go into IB

Doing it for the money

Even though the money is most likely a huge motivation for you, it’s not a good idea to say that you’re motivated by how much money bankers make.  It may be true, but most people find it distasteful, so avoid saying that.

Doing it as a stepping stone to something else

This any also be true, but you should avoid saying that you ultimately want to get into private equity or hedge funds and you think IB is a great way to get here.

 

More career resources

Thank you for reading this guide to answering the why investment banking interview question!  If you’re looking for a job in IB be sure to check out our guide on how to get a job in investment banking.  It contains tips on networking, your cover letter and resume, and technical skills that are required.

Once you’re set on a job in IB you can really ace an interview by being super strong technically. The best way to do this is through our financial modeling and valuation courses.  We’ll teach you how the pros build valuation models from scratch!

More resources include: