Why do IB firms ask for SAT Scores?

Why do IB firms ask for SAT scores when IB work is not at all that hard on the brain's intelligence (technical skillsets - which hinges more on crystalized intelligence (memory) than fluid (raw IQ) intelligence - and relationship building at the more senior levels)? To elaborate, research has proven many times that SAT scores are very highly correlated with raw IQ; it seems that above a certain point (say 108-110) almost anyone can handle normal IB work. Success in IB seems to be more of grit and one's capacity for hard work and conscientiousness, which are measured more by one's college GPA and perhaps work experience/extracurriculars depending on what they are. Why do they not just ask for GPA and work experience? Something I always wondered. For management consulting and PE I understand better the need to test for raw fluid intelligence

Comments (49)

  • Intern in IB - Gen
Sep 16, 2022 - 4:22pm

People with higher raw IQ are more likely to learn quicker, be accurate, and work harder. Anybody could do IB like you said, but firms would rather have overqualified people to do it since even when they're tired and working long hours, they are able to not slip up in accuracy or speed. Personally, since I came from a non-target, I found interviewers took value in my 1500+ SAT compared to my 3.9+ GPA. GPA is hard to compare because class difficulty at universities and general grade inflation varies. I think it adds credibility to your overall academic achievement for interviewers. Obviously SAT is a highschool test and things change for people after that, but that's my general impression about why firms care. You won't get an offer because of a good SAT score though. It's only one component. Work experience probably matters the most and then GPA below that.

  • Prospect in IB - Cov
Sep 19, 2022 - 1:17pm

How do they check SAT scores? The agency doesn't sent scores out to anyone except Colleges. Do they ask to see screen shots or scans?

  • Intern in IB - Gen
Sep 19, 2022 - 3:55pm

One firm asked for a PDF of my official score report, but I don't think this is the norm. You could prolly lie, but it's not worth the risk.

Controversial
  • Analyst 2 in PE - LBOs
Sep 18, 2022 - 12:39am

SAT scores do not measure IQ or intelligence. It just measures your readiness for your freshman year in college. It is and irrelevant measure.   Myth number #2 - Having a high IQ will allow you to learn faster. Nope. People learn faster because they are truly interested in the subject matter, gets along with their boss and is coming into the job with some work experience where you do not need to learn from scratch. A mechanical engineer who is not interested in fashion will have a slow learning curve when working in the fashion industry. I can not tell you how many slow learners I have worked with who went to "top schools" and majored in something difficult. I have had many jobs in many investment banks and they rarely ask for SAT scores. It is typically from a clueless recruiter trying to thin out the herd. This is a very inefficient way of recruiting. Sometimes you will get that narcissistic hiring manager who can only work with those that have high SAT scores, but this is a rare one off and that team is a sinking ship you do not want to be apart of. No one checks SAT scores either. The reason why headhunters ask for SAT scores is because they are idiots and they think it will make the resume more desirable and offer more money.  It won't. PE is just as mind numbing as investment banking. Even  management consulting does not take the SAT requirement seriously. Skills and fit are the most important thing in any job. Engineering requires why more intelligence than banking and they do not ask for SAT scores. Just and engineering degree. Finance is not hard, you just need to be interested in it. Not just the sexy part, but also the lame aspects of it such as accounts payable, payroll, cost of goods sold. This the data that makes up many of the different financial models. I hope this helps. 

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  • Intern in Consulting
Sep 18, 2022 - 11:54am

This is just low IQ cope man. There is obviously a strong correlation between SAT scores and IQ. Would you rather hire and work with someone with a low SAT score or a high SAT score? The answers pretty obvious. Yes there are outliers but on average the person with the higher SAT score is statistically more likely to be smarter. It's the same logic behind picking kids from targets. Yes the non-target kid might be a better candidate but firms don't want to take the risk when on average target kids are better.

And the reason engineering firms don't ask for SAT scores is because they are hiring people with actual engineering skills rather than anyone like in banking.

  • Analyst 2 in PE - LBOs
Sep 18, 2022 - 1:33pm

So what you are saying is that hiring a non target with an accounting background with great skills is risky but hiring a Harvard history major with no skills is not risky? Are you sure about that? Also engineers are getting hired for their skills but you do not need skills for investment banking? What? When a new hire needs to be trained from scratch, that is the biggest pain in the butt and it makes life harder for the VP, MD as well as the new analyst. Also target school grads are not better analysts. The non target grads typically do circles around them because they have the accounting, excel, PowerPoint as well as a business background. Most target schools do not offer accounting and other business courses.

As when it comes to SATs, I got a high score. It is irrelevant in the real world. Investment Banks for the most part do not ask for SAT scores. There might be some rare occasion, but that is due to incompetence in recruiting. SATs do not measure intelligence. It is like the MCAT, GMAT, GRE, LSAT. It measures readiness for the academic program that you want to attend. You can not improve IQ but you can improve your SAT scores. Even the SAT company says the test should not be used as a IQ test as well as a hiring tool. I took test and measurements in college and you have to be very careful of the proper use of tests. You stated that you would hire someone with the higher SAT score. That score is irrelevant to investment banking. Hire someone with the proper skill set who will be happy at that job. 

Look, you should be proud of your high score, but investment banking is not rocket science. You are not going to build complex economic models. You are working with data that is not that sexy. If you are building a DCF model for a trucking company, you will be using accounting and bookkeeping data to build that model. You are also going to be doing a lot of PowerPoint presentations and clerical work. It is not everybody's cup of tea. The best hires would a Big 4 person who is not burned out or a bookkeeper that does their company's forecasting as well as the PowerPoint presentations and clerical work.  

  • Analyst 2 in IB - Cov
Sep 18, 2022 - 10:13pm

I have a GRE score of 331/340, which is considered high by many. I can guarantee you there is nothing special about my intelligence that I can do Albert Einstein level work, but according to my MD we are doing magic every single day. 

Sep 19, 2022 - 1:52pm
AssociateBanker, what's your opinion? Comment below:

There is weak correlation between IQ and SAT score. There is strong correlation - and potentially causation - between parents income/wealth and high SAT score. What the SAT measures is a family's financial ability to hire a tutor and a student's ability to learn how to take a test.

EDIT: Throw all the monkey shit you want, this has been studied for years

https://www.cnbc.com/2019/10/03/rich-students-get-better-sat-scores-heres-why.html

  • Analyst 1 in PropTrad
Sep 19, 2022 - 3:24pm

I.Q., SAT, and school grades are tests designed by nerds so they can get high scores in order to call each other intelligent. Smart and wise people who score low on IQ tests, or patently intellectually defective ones, who score high on them, are testing the test and not the reverse.

Sep 20, 2022 - 10:28am
the_lonely_traveler, what's your opinion? Comment below:

This is just completely wrong.

https://medium.com/incerto/iq-is-largely-a-pseudoscientific-swindle-f131c101ba39

Like many concepts in academic psychology it is unimportant drivel that has no real world application. Saying you'd rather have high SAT vs low SAT says nothing. High SAT tend to do better to a point. But the SAT can be games just like any other measure. Take enough practice ones and study what you get wrong and you will do better. People with 1500s RARELY get them because they waltzed into the test without studying and their brain was just so good at pattern grammar, algebra, etc. They study and do well, just as you can do on any test.

You are trying to mash your identity into SAT scores because you did well and you think people that do less than 99th percentile are brain dead morons. Lemme guess, you took an SAT camp or studied your ass off to get a good score and now you conflate your hard work with your natural intellectual ability because it makes you feel better that you didn't do well right off the bat?

  • Associate 3 in IB-M&A
Sep 18, 2022 - 9:26am

What IB firms are asking for them? When I recruited for analyst jobs years and years ago, I think only 1 BB/EB wanted them on the app, and it never came up in recruiting. Surprised any more IBs are asking for them given they're on the way out in college admissions.

Either way, unlikely SAT comes up at all unless you put it on your resume. Actually knew of a girl who had a 1560 or something ridiculously high on her resume... one of my VPs asked "what happened to the other 40 points" trying to make a joke and she got super flustered and defensive, VP felt terrible lol

FWIW I know plenty of excellent IB analysts who had quite low SAT scores. It loosely correlates with IQ but also family income, plus it was so long ago it's not a relevant metric. some people just don't study much for it, not good test takers, while some study for years with $$$ tutors.

  • Intern in IB - Cov
Sep 18, 2022 - 2:39pm

When I applied, a ton of banks had a section for it in the online application. I had it on my resume too, but it never came up. 

  • Associate 1 in CorpDev
Sep 19, 2022 - 2:03pm

Some investment banks want the cringiest candidates possible these days, aka the kids who proudly provide their SAT scores on their resumes. 

Coincidently, these same students list out ever single semester they made deans list, turning their 1/4 page resume into a comprehensive 3 pager (they include professor names, time of day they took it, how the class made them feel, if they felt safe in the class, and if their mom helped them with any of the assignments) 

  • Analyst 2 in IB - Cov
Sep 19, 2022 - 8:01pm

As a counterpoint, if you recruit for PE/HF and don't list your score it's assumed to be very low, can disqualify you from many UMM/MF.

  • Analyst 2 in PE - LBOs
Sep 20, 2022 - 1:01am

I am not sure why my comments are getting monkey s..t or have been labeled controversial. None of my comments were controversial. SATs are not IQ tests and should not be used as IQ tests. Look it up in google. An IQ test is a different test administered typically by a psychologist. SATs are administered by a testing company. Someone with an average IQ can do well do to taking an SAT prep and someone with a high IQ can do poorly, especially is that person is coming from an underfunded school. You can also be brilliant and have a high SAT score. SAT just measures academic readiness for college. It is also unethical to use SATs for hiring and screening purposes. That is not what the test was designed for. You will get way too many false positives. Even the SAT testing company says that the SATs, GREs, GMATs should not be used for hiring purposes. An HR department administering a psychological test to candidates is also very unethical. No one in HR has the proper training and licensure to administer those test and it can result in negligence. 

I am not trying to be mean, but many of you are idealistic high school/college kids that have never worked in a investment bank before, or have been a full fledged adults yet. This is not an insult, I wish I was that young again. I am on WSO to help people with their careers and advocate for themselves, so they can avoid some of pain and heartache I went through when I was in my early years in my career. I would never try to give misleading information. The fact that you are taking my comments personally shows me that many of you are not cut out for banking. In investment banking you are soul crushingly criticized even when you did a perfect job and proud of your work. That hits you to the core. You guys need to grow a thick skin. 

I am also alarmed that my comments got labeled controversial, but disgusting, racist remarks I have seen on other threads about diversity hiring are untouched or praised. I am one the few that is for diversity hiring. I think we need a different perspective. CEOs, and CFOs come from many backgrounds. We need more than just a country club kid that went to an elite prep-school to represent investment banks. This experience makes me want to leave WSO.   

Sep 20, 2022 - 10:17am
Dr. Rahma Dikhinmahas, what's your opinion? Comment below:

When you have (i) a college admissions process that's already rigged in so many ways (whether to favor athletes, legacies, demographics, Lori Loughlin's kids etc) and then you also have (ii) grade inflation at many top schools, you do start to wonder as an employer whether a kid's accomplishments to date really say that much about him or her.  Another data point doesn't hurt.  

Ideally the interview process is thorough enough that you'd rely on that to measure a person's aptitude for the work.  But there's a lot of resumes and the Princeton 3.9 with a 1200 SAT is suspect.

  • Intern in IB-M&A
Sep 20, 2022 - 1:24pm

My MM bank asked for a PDF of the score report prior to super day, but after 1st round. I go to a non-target and just assumed it was an additional data point for them to look at and see how you compare to everyone else. Don't think it's that deep. 

  • Intern in IB - Gen
Sep 20, 2022 - 5:13pm

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Sep 20, 2022 - 4:36pm
Miracle1111, what's your opinion? Comment below:

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