Is Investment Banking for Me?
While investment banking promises large paychecks and great exit opportunities, the IB lifestyle is not a perfect fit for every personality type. Notably, 44% of investment bankers who start straight out of college leave the industry within three years. As Harvard students, the best approach to knowing if IB is right for you is to talk to seniors who completed their IB summer internships and Harvard alumni investment bankers (we promise it won’t be hard to find either). Here’s a quote from a Harvard alum about how the IB junior year internship can help you understand if IB is the right fit for you:
“One of the best ways to determine if any field/career is a good fit for you is simply doing the internship - the beautiful thing about an internship is that it's a 10-week trial for you to get a feel for the job and see if you can actually picture yourself there full time. By the end of my sophomore internship, I confirmed my interest in IB and cultural fit at BofA, so I decided to return for my junior summer as well.” (Intern at BofA, Harvard Class of 2021)
Until you do that, we compiled a list of some of the reasons why you may or may not be a good fit for investment banking.
The Lifestyle
Investment bankers work extremely long hours and 80-hour work weeks are commonplace. If you are looking for a good work-life balance or have a more relaxed approach to your career progression, the long-hours might be a deal-breaker.
“I think someone who's ambitious, eager to learn, and has a good attitude is a good fit for IB. You can also see if your personality type is a good fit by meeting more people at different banks and see if you enjoy speaking with them.”
- Intern at BofA, Harvard Class of 2021
High Stakes, High Pressure
The high-pay comes with a high-pressure environment. If you excel under pressure (and when using Excel under pressure) the high-pressure, high-stakes environment might help you perform at your best. On the other hand, if you are less comfortable with high-pressure environments, the necessary ‘grind’ to succeed in IB might not be for you.
“People who are not a good fit for IB are those who want to work everyday on something they care about. Someone who is interested in a startup would be the polar opposite for IB. People who are not a good fit would be those that like to take ownership for their work, have high levels of responsibility from their bosses, want a work life balance that doesn't include getting called 12x when you're at your friends birthday lunch on a Sunday to rush home to fix the font on a pie chart.”
- Analyst at Truist, Harvard Class of 2019
“I chose investment banking because, in the long term, I know I want a career in finance, and banking is a great jumping off point for really any other finance job you might want to try out later on. It gives you the fundamentals of valuation and allows you to gain experience in helping to execute deals.”
- Intern at an elite bulge bracket bank, Harvard Class of 2021
“I chose IB because I've been interested in business/entrepreneurship since high school, but I didn't really know where to take that interest. I don't know precisely where I see my career in the future, but I know that IB will give me a very strong foundation upon which I can build a great career. There are many exit opportunities, and IB is looked upon highly if I want to, say, switch fields. I also considered corporate law, but found that I preferred something more quantitative than reading/writing-based.”
- Intern at BofA, Harvard Class of 2021
Attention to Detail
Investment banking requires a keen attention to detail. This is critical in preparing presentations for clients, creating financial models, and problem-solving as a team. For those who prefer dealing solely with the big-picture, IB might disappoint, at least for the first few years.
“I knew I wanted to work in an industry that fosters a lot of technical and personal growth in a short amount of time, so IB seemed like a natural choice. It's also a path that gives people a lot of responsibility early on in their careers.”
- Intern at BofA, Harvard Class of 2021
Hierarchical Structure
Investment bankers work within a hierarchical structure and while creative thinking is prized, taking orders is too. The classic ‘rebels’ may struggle to fit into the often rigid investment banking structure.
“My biggest piece of advice is to think about who you are as a person. Do you value being able to have a lot of opinions at work? Do you want to "create" something? Or do you love finance? Have you read Barbarians at the Gate for fun? Do you know how to build a cap table?
I think if you are in the former camp, you would not enjoy IB. If you are a die-hard finance person who invests on the side, reads the news, and already know you love analyzing businesses - you should do IB! If you are on the fence and have no job offers - do IB which will give your resume a huge boost. You can always leave after your first year bonus.
If you are picking between IB and consulting, think about how much you value work life balance. You can easily go into PE from either. If you are deciding what to do for your junior year internship, IB is never a bad place to be. You can always change your mind and recruit for consulting full time. 10 weeks should be enough for you to get the flavor of what the day to day work is like.”
- Analyst at Truist, Harvard Class of 2019
These are just some of the reasons why you may or may not be a good fit for IB. If you encountered increasing hesitation as you went through the list, you should not be completely discouraged. There are plenty of other career paths and you can definitely find your perfect fit.
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