Do firms give pre-application exams to test for knowledge of financial topics or intelligence to pre-screen applicants?
Heard some places already have exams like this, or using pymetrics, but unsure if it’s like this everywhere.
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That would be a fair way to screen potential applicants. If every ib firm had a short 1 hour finance / accounting related timed exam, you could probably get a much better pool of applicants and interview candidates knowing they all had to score above 90% to be able to apply
Exactly!
Until you have the Head of DEI see what you’re doing and claim the tests are racist. People will MS this but I urge them to google “Are IQ tests racist?” to see there are really people that think like this.
IQ exams may not be a good proxy, but requiring exams on corporate finance + accounting knowledge would be a good screen to see which applicants are proficient on a technical level. People could then focus more of their interviews on behaviorals and fit
Everyone in here acting like finance and accounting is difficult? I teach my 12 year old brother these topics. Just look at potential candidates grades and make sure they aren’t fucking weird.
In the UK we already have these for most banks
What are your thoughts of this system in the UK, and does that help create a more meritocratic system for hiring people?
I’d say so, most people prep for these exams and so you can usually filter out the 1000s of applicants much faster and get down to serious candidates.
You have to be retarded to fail the online tests if you practise. They cut like the bottom 50%
Does this impact diversity programs in the UK?
Not sure but I know for some diversity programs you still have to do the tests like MS and DB
Every applicant applying to analyst/internship programmes takes these tests. I can’t speak for how diversity candidates are benchmarked.
Wait I didn't even know the US has no pymetrics? Fr?
What's the format in the UK for these? Are they given during the application process or beforehand?
What are these UK based exams like? Are they finance or IQ exams and how long do they take to study for?
Usually have 3-4 segments of numerical, verbal, and logic/abstract reasoning - effectively just psychometric tests. You can't really study for them, you just get it right or you don't (but some people pay a lot for practice tests)
Don't they do this in the US? Other domiciles I'm familiar with all do testing. I had to do like 50+ tests when I was in final year of uni and applying to graduate programs.
HR just use it as another filter. Maybe they cull the bottom 50% or something.
I would rather test for EQ. We aren’t building rockets to Mars and def not getting the sharpest tools in the shed
Del
Networking is super formulaic now. Tons of guides, YT tutorials and the like. It's to the point where meeting kids for coffee is just a blur, they ask the same questions, talk about the same things. Maybe 1 in 5 or 10 is even memorable.
Who gives af about EQ when you just want someone who can crunch out a bunch of models and decks for two years before they bounce to PE gigs or bschool
In the UK we already have psychometric tests which test one or multiple of numerical, verbal, logical skills. Logicals are most similar to "IQ" tests i.e. pattern testing, but not many banks use them.
We also have cultural fit/EQ/job sim tests.
Typically to get past these stages you have to score "excellently" in all stages. Sometimes your speed is also assessed so you need to be fast and accurate.
Works pretty well. I wouldn't say you have to study for the tests but some are pretty tricky first time so there are a few services which offer practice tests for different test providers that mimic the difficulty.
Common issue with these tests is that people often get their friends to it for them. Especially common at targets like LSE
Never understood this. I wouldn't mind pointing friends to resources but why on earth would I myself add competition for myself through my own direct actions. Not to mention wasting my own time, losing respect for the person due to their laziness etc.
To each their own I guess. Maybe banks should bring back the in-person testing they used to do to check for this.
Do exams like IQ tests actually show intellect?
I don’t think IQ tests are actually a good proxy for competence, plus how high of an IQ do you need to do analyst monkeywork? EQ probably matters more
You don’t need EQ to do intern monkeywork either. That only matters as you get higher, but it’s important to be likeable and have social awareness, which many interns lack for a variety of reasons
It’s pattern recognition, which could help.
However it’s very easy to imagine multiple ways where someone could be awful at this job with a high IQ.
Screening for basic finance knowledge would probably at least help with screening for more serious applicants but some people don’t always learn finance knowledge until junior year or even later. I’m still learning new stuff every day about this field
Yes, exactly you are right same happening with me!
They should definitely have screens for personality and EQ prior to any applications, gotta make sure you’re working with people who are in a good headspace
Interviews and networking somewhat already vets for this but I thought some of the personality tests were interesting - wonder what characteristics they look for
Since when did they start IQ or Personality screens for jobs in the US
It's not necessarily a binary thing (ie threshold IQ met => can do the job), there's a lot more nuances to it than that. Generally you want decent academic credentials, strong business interest/acumen, the ability to think commercially, but more importantly communication. You will work with people who crack under pressure, don't communicate timelines effectively, don't explain things effectively, and are generally shit at delegating and managing multiple stakeholders. These things are a lot harder to filter for, and are the exact things you need from people within your team. Much moreso than a threshold IQ.
If, for whatever reason, you think you'd have an edge over others on the IQ side, I suggest you take some time to change your way of thinking. You don't sound like the type of person I'd wanna be sat next to for 14+ hours a day.
Why does this exist in the UK? How common is this in the US?
Lol OP are you saying you prefer if interns take IQ tests or you’re wondering if this is something companies ask applicants to fill out now?
If the former, then you’re probably socially stupid af, even though many companies actually do administer these / pymetric exams as part of their application processes
I think it’s a reasonable screen but banking is more about stamina rather than actual intelligence. A finance related test could probably work better at actually selecting qualified candidates over just an IQ test.
Yeah quite a few firms in the US already have these exams, a good way to pre screen candidates and make the application process more equitable
There should be a bottom AND top cutoff for IQ in Investment Banking. If you're over 135, you should be disqualified for anything connected to front office work.
I think the stigma around high IQ might be a more of a stereotype. Extreme IQ often just reflects calculation speeds that don't neccesarily always increase your chances of being more socially inept than "normal" people
It does increase your "headiness" and desire to get stuck in your own thoughts though. Also, sales is a stupid man's game, and IB is sales at the end of the day. The amount of times I have had a PhD carrying client downplay the achievements of his R&D heavy firm because of "muh intellectual honesty" is baffling.
would never in a million years happen in the usa
it would crater all DEI recruiting..period.
when firms have an incredibly hard time finding their goal number of DEI hires, they will be forced to lower the standard or apply a different standard to DEI (which they wont want to admit to doing)
will NEVER happen here.
DEI initiatives are not a US-exclusive thing. They also exist in the UK... where the firm's have these tests... and they still make their numbers...
Ah yes, race relations in the US == UK, an apples to apples comparison. Case closed. Thanks for clearing that up for us, OP
If I’m a banker hiring an analyst, all I’d want to know is whether or not I’d enjoy working with the person. If they interview a few times and it flows nicely, they say the right things, boom hired. The work is easy at a certain point and everything is teachable.
Of course give them a test or whatever to make sure they’re not dumb, but at a certain point there’s no reason why we need to do any complicated testing or comparisons for punching numbers into spreadsheets.
For one of my super days, it was a standard afternoon of 4 hours of interviews with several mid and senior level folk. Had great convos and generally vibed well with whole team, got all the questions right from the technical interview, and already networked with the staffer who was making the hiring decision.
Then the last round was a 1 hour in-office finance / accounting test that everyone had to take. Passing score was 85%. The concepts tested in that exam were more advanced than what you’d learn from the 400 questions and biws guides, as we could use our phones and internet as reference during the exam.
How about finance / accounting concepts exams instead of IQ? I don’t think IQ tests can gauge if someone could be a good intern / analyst but at least financial proficiency exams can tell you who is actually knowledgeable about finance
Bx has accounting + CF tests in the internship process
Do any firms have a Corporate Finance + Accounting exam aside from Blackstone?
Does BX require these tests for all their PE / buyside groups?
IQ is a very poor predictor of success, it can actually change, and the highest IQ folks aren’t interested in long hours of excel momo work 🤣
The higher IQ guys at the Ivy League I went to ended up studying engineering, comp sci and other fields in academia.
They have pymetric exams that test IQ, EQ and reading comprehension sometimes
Yeah several firms I’ve interviewed in already have these.
Sounds like they implement this at the majority of places in the UK already
Barclays has this for US applications as well. Need to reach a certain score to qualify for interviews afaik
Good, heard Macquarie and HSBC also have pre-qualification exams.
They should have any and all analysts take these and get above a certain score prior to being allowed to apply
I hope this post is a joke. You don’t need to be a rocket scientist to be a banker. You need to be hardworking, sociable, high EQ, and confident. Aka, probably with OP is not.
This is a good idea. Baseline fundamental knowledge is required for IB before anything else. You don’t have to be a genius, but still need to be adequately knowledgeable in finance concepts to get a job in the field.
Some people who majored in finance don’t always understand everything needed for the job.
Firms should have a short 1-2 hour timed multiple choice finance exam where they test on a select bunch of relevant topics and require an 85-90%+ passing score. Those who pass can apply to a firm, and be assessed on important factors like EQ, personality, etc.
We see this all the time in buyside interviews, where the first round is often a financial modeling exam followed by other rounds of technical interviews.
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