This post forms part of my 7 Steps to Getting into Investment Banking. All of these steps are about positioning yourself to get a role in Investment Banking. To get a job in investment banking you want to
- Get noticed by the investment banks (go to the right school, get good grades, be well rounded)
- Have a history of being interested in finance (demonstrate an interest early)
- Have the requisite experience (Do an internship in a related field, do an Investment Banking internship)
In an ideal world you wouldn’t have to do an internship in a related field. You would do several internships at different investment banks, work out which bank you liked the best and whether you actually liked working in investment banking and then go work at that bank. Unfortunately banks don’t hand out internships that easily…and the competition for them is as fierce as for the graduate positions themselves.
In order to land that elusive investment banking internship you therefore need some work experience in a related field. This post will go through why you need the internship in the related field and where you should think about going to get this experience.
Why should you do an internship in a related field?
There are 3 reasons you should do an internship in a related field
- Getting an investment banking internship interview is incredibly competitive and you want to be able to stand out. One of the ways you can stand out is by having ‘relevant’ experience already. If you have relevant experience the assumption is that you already have a ‘proven’ interest in the industry
- Getting an investment banking internship before your penultimate year is close to impossible. I know some people that have done it but they are incredibly hard to land. If you are in a 4 or 5 year degree no investment bank is going to give you work experience in your 2nd. Other industries will, though and you can build your resume this way
- You won’t be as ‘green’ when you start your investment banking internship. If you have never worked in a corporate environment before…it can come as a little bit of a shock. Working 9 – 5 (forget banker hours) is a struggle after the relative ease of college or university. I know you may study and do other things but sitting at your desk for that period of time takes some getting used to. Doing an internship can help break you into this work environment.
Where should you apply?
The best internships to try and get are the ones that are the most closely related to investment banking. Some examples may be
- Corporate finance at accounting firms (this is the best option if you can land it)
- Corporate finance or other finance roles at retail banks
- Boutique investment banking internships (use your contacts if you have them)
- Other accounting internships (e.g. valuations or even audit)
- Finance roles at corporates
The options above are probably the ones to shoot for but there are a range of other options you can go for.
What are you looking for in the ‘alternative internship’?
Basically you are looking for a role where you can get some finance experience in a corporate environment. The range of options is therefore huge.
Note that I said finance environment…not M&A. You may have wondered why I didn’t put up there do a law clerkship in an M&A department. This is because M&A experience isn’t important. The experience that matters and that you want to be talking about during an interview is about using spreadsheets and doing analysis. You will not get this experience at a law firm.
The skills you want to be demonstrating are analytical skills. If you can’t land one of the alternative corporate finance roles I mentioned above, look at anything which will help you talk about your analytical skills in an Investment Banking job interview.
How do I land an alternative internship if I have no experience?
I always suggest that college or university students should take a ‘building block’ approach to work experience and internships. The ‘popular’ internships are always going to be the hardest ones to land.
The best alternative internships are also going to be the ones with the greatest competition. If you are starting out with no corporate experience my advice is to start with an unpopular internship (or part time job) which will help you leverage into the next internship. I.e. go for the role that no one else is going for and then use this to get the role that people actually want.
The fact is that you may not get the roles you want. I didn’t get any of the positions I mentioned above even though I applied to all of them. This doesn’t mean that you should give up and do nothing over the summer. Keep leveraging yourself into better roles and you will be in a much better position to get the role you eventually want. This was my path to getting my investment banking internship.
- I was in my second year of my 5 year degree and no investment bank (or accounting firm) was willing to give me an internship. The only thing I could land was a summer job as a law clerk at a medium sized firm (it’s not optimal as I mentioned above…but it was all I could get). What I did get was a glowing recommendation at the end of this period.
- In my third year of my degree I applied for investment banking and corporate finance accounting firms. I got a few interviews from the accounting firms but nothing from the investment banks. However I did manage to land a summer role working as an economist for a government department doing a lot of analysis. Once again I got a great recommendation.
- In my fourth year I managed to get that elusive investment banking internship in part by demonstrating (with references) my analytical skills from the prior internship
No one ever has the ‘right’ experience on day 1 but as long as you have a plan to get this experience you are going to be in a much better position than half the applicants you are competing against who gave up when they couldn’t get the ‘prestigious’ roles they were going for.
A lot of this requires early planning
The plan I outlined above requires you to be thinking about your career and planning early. If you plan early you can get this experience well before you need it. If you didn’t start early and are coming to this realisation a bit later then you’re going to be at a disadvantage…but it’s not impossible to overcome. You can get this same experience by
- Doing a part time job in a related field (as close as you can to corporate finance)
- Leverage your contacts to get some work experience even if it’s just over the winter break
- Offer your services for free to get some work experience (this seems to be more common in some countries rather than others…I hate the concept but it is one solution)
You don’t have to have another internship on your resume…but it helps
The fact is that you don’t have to have another internship on your resume. I know plenty of people that didn’t and still landed the investment banking internship and grad job. But you never want to be ‘the exception’. Increase your chances at getting an internship and build your resume by doing one of these related internships.