What's the failure rate for aspiring investment bankers?
I've been on this forum for some time, and I've noticed that many post their success stories but stories of failure are rare. Because of this, I feel that it's possible that a representation bias may exist within WSO regarding how many people actually achieve their goal of getting into the field. So what's your story of failure at trying to break into Investment banking? Also, what percentage of people who apply for IB positions actually make it?
Edit:
Goldman: 2% Acceptance Rate BAML: 3% Acceptance Rate Citigroup: 2.7% Acceptance Rate Deutsche Bank: Unknown JPMorgan: 2% Acceptance Rate Morgan Stanley: 1.25% Acceptance Rate
These stats are from 2016. If anyone else has stats of other banks feel free to share, as this was all that was readily available online.
Why does it matter? Some people get jobs, some people don't. If I tell you 20% of the kids you described get in will you stop trying? 10%?
The problem here is there's just too many variables. School, experience, network, interview skills etc all come together to get you a job. If you really want to know your chances look at older kids from your school who got IB and see how you stack up. And if no older kids have ever gotten IB, your chances are extremely slim.
You shouldn't do something based on percentages of success. You should do something based on your interests and goals. If you really want to be in investment banking, or anything else, it shouldn't matter if there's a 50% chance or a 0.0001% chance. You still try.
So OP should also shoot for the NBA if he likes playing basketball?
I don't think the "acceptance rates" are a viable metric since they encompass every person who simply fills out an online application for a bank.. The truth is, if you are from a super non-target with no connections and just fill out an online app, your chances are 0% because your app will likely never even get read by HR. Now if you are from that same non-target but network a lot and manage to get an interview, your chances just went up exponentially, maybe up to 5/10%.. A person's odds of breaking in have nothing to do with strict percentages, and everything to do with networking/campus recruiting/connections. I think the reason why those banks have such low acceptance rates is because most people fall into the nontarget applying online where their resume is never even read category.. Which to be honest, why would a bank go through sifting through thousands of mediocre online applications when they have more than enough capable candidates just from OCR/Networking/References
You asked for a story about failing to break in to IB. I won't say I failed yet but here's my story so far.
I grew up in a very blue collar, midwestern town where people hardly even go to 4-year college, let alone anything remotely considered a target. My parents, aunts, uncles, grandparents etc. all did not attend anything more than community college. I had a 3.9 in high school and decided to "shoot for the moon" by attending a small liberal arts school in the midwest, not known for anything. I achieved mediocre grades (3.0) because I was already beating everyone's expectations and breaking out of my small town. After sophomore year, I learned about WSO and started to take everything more seriously. I became heavily involved on campus being an RA, working an on campus job, interning with a family wealth management office, and volunteering, all while maintaining a 3.8. After the wealth management internship, I studied abroad and came back to the states with a sell side ER internship, maintaining all of the on campus involvement. During fall semester, senior year, my GPA was now a 3.4 and I received a FT offer to do a leadership program at a top 5 health system and to be honest, my family, friends, etc. all encouraged me to take the job and not pursue ER. They all could comprehend corporate finance at a huge health system, they didn't understand what ER was in the slightest. In the end, I took the corporate finance job because pay was better, promotion opps were better, way less hours and because it made my family more proud than ER. I can't go anywhere without people making a BFD about my mediocre job. After the year leadership program was over, I took the next offer from the org (20% raise) and have been in my FA role for 3 months. However, it's now more than ever that I'm realizing that I'm still not satisfied with corporate finance. It's not competitive in the slightest. A large amount of people in finance all are middle aged and in the job because it's very secure and has great benefits which is nice but at 23, I want a challenge. I want to make it. I want the prestige of breaking into wall street like I read posts about on here. So now, I'm studying for the GMAT (to go to a top B school to void out the shitty GPA at a small liberal arts school), volunteering more (to boost my resume), and working longer/more focused hours (to get as far ahead as possible before I apply for B school). So although I have failed so far, I'm no where near done trying to break into IB. I know that it's a challenge but it's one that I won't give up until I achieve.
Thought I'd quickly weigh in:
OP is right that there's a survivorship bias here for the most part, since type-A monkeys are the ones the most worried about securing a spot. However, I disagree on statistics having any use at all. Unlike college admissions policies of old, an IB position doesn't come about by inputting quantitative factors --> lookup cutoffs and competition in table --> rank top 1-5 out of 100 ==> offer.
But if you really want an equation, from my experiences, here's the most relevant one I've come across (note: wn is a weighting factor): Offer = w1background + w2technical ability + w3likability + w4effort + w5desire + w6timing + dumb luck
Background and Technical Ability: These are minimum factors that a candidate needs to meet. And I'm talking bare or below minimum if the other factors are off the charts. Likability: Airport test. If you fail this one, you'd better be some big client's kid. Effort: Networking, following-up, etc. If you're not connected, this is a very important factor. People will fight for you if you have both this and likability. Desire: You have to really want it (touches a bit on Effort). This is why the statistics cited above are misleading. They count all applications, regardless of the person really wanting it or just dropping because they were drunk at 2am and hit the apply button on the OCI website. Timing: People forget that this is a factor. In 2005 to 2007, and 2013 and 2014, things were a lot better, selectivity was decreased, and more candidates received offers. Now if you look at all the cuts banks are facing, you can bet that you'll have a harder time getting a job no matter how good you are. Remember, people coming out of school aren't entitled to a job, and "acceptance" rates aren't static. Unlike schools, class sizes do change at banks based on business needs. Dumb Luck: The ultimate fudge factor. Even if you have all the criteria above, you still may be unlucky and not land a spot. But on the plus side, it sometimes works the opposite way as well. So there's no reason to give up.
Also, I don't think this statement accurately reflects human nature. We all think we're "above average" and I think most people will still try regardless of the "acceptance rate". If you don't believe me, as a thought experiment go to the East or West Village on a Saturday night. You can observe the number of different guys who approach the same hot girl and get shot down. Acceptance rate there is even lower, but people still try...
17.38% - Asked Fetty