The Finance Recruiting Pipeline is Stupid

I don't think a 3.5 STEM major at a target reduces your chances. I looked a lottt worse on paper. Look elsewhere to improve. You can do it just have to be honest with yourself and put in the work.

(1) Yes. IB/PE recruiting is not conducive to getting competent people in the door. They run recruiting to target a very specific type of person: lazy hardos. This seems like a contradiction but it is true. They are looking for people who will smile and bend over when the business end of the whip comes around but they are also looking for people who are largely on one specific path and this is the next natural step for them. 

This is why people make fun of IBs and PEs when they complain about incompetent or substandard employees. Of course they are going to have duds when their recruiting process ISN’T about actually identifying top talent. 

(2) STEM can be a beneficial background. It largely depends on (i) if you can get a lot of other finance experience/show that you know finance and (ii) what specifically you want to do. 

You need to be able to demonstrate you know finance. You will definitely need to have some kind of finance internship. It could be PWM. It could be in IB. It could be some small, local, PE fund. It could be a financial advisory role like financial dd at an accounting firm. Just get some work experience that is finance-related. In addition to that, you should probably take something like WSO’s/Wall St Prep’s/etc modeling courses, make sure you know that shit cold, and make it clear on your resume that you know this stuff. 

STEM can be a helpful background if you want to work in tech or engineering groups. It probably won’t mean much for IB recruiting but if you want to go PE and you have actual technical knowledge of the industry they work in that is value adding. For example, if your degree is in aerospace engineering and you want to work at PE firms that invest a lot in the aerospace industry, that will be appealing to them. 

Hey man, just know if I was looking at your resume I would give you a big boost vs vanilla, risk-averse finance lemmings.

The STEM major is not going to help you recruit for IB, and probably won't help in IB. But numerical fluency and understanding rates, changes in rates, convexity, constrained optimization and probability are huge imo in simplifying and analyzing investment problems. Some investment committees are very qualitative, but you would be surprised at the quantitative rigor that some investors (more common in hedge funds I think) approach investing.

You do have to know the financial stuff as well, but as long as you pass the interview, they'll teach you all that in training and on the job.

I was in a similar boat, along with not really knowing about/committing to finance until the fall of my junior year. I ended up finding a cool SA role and now FT with a team who are all from quantitative backgrounds, even though the work is not all that quantitative (REPE). There are definitely firms out there (mostly PE as opposed to IB) that understand the value of majoring in STEM and challenging yourself in undergrad-- they just might not be names you hear about on campus who have the ridiculously early timelines.

Also, majoring in math will help you a lot in any career you choose (especially anything finance or law related IMO) since it is one of the few majors that teaches you to think rigorously and logically while also giving you exposure to statistics. If you can apply that skillset post-grad, you'll blow most other analysts out of the water in terms of work product and efficiency.

Long-term, those that put in the work in college and challenged themselves in subjects of their interest will see the benefits (both personally and professionally) compared to their peers who took the easy way out academically. A lot of my friends did the whole "easy classes" thing and my reaction was the same as yours, but eventually, the cream rises to the top. Just my 2 cents.

My two cents is life is long, and even if you end up in banking/finance after undergrad, you won’t necessarily stay there forever. Pushing yourself out of your comfort zone and learning as much as possible, however, pays dividends for a long time and is a skill you’ll have to maintain for your entire life. Definitely challenge yourself and don’t look back, and be very curious about all the career options you have.

I think you're overreacting. In the grand scheme of things, 3.5 GPA at a target as a math major is going to be well-regarded and no one will really give you shit for that. Although with that said, yes try to take some easy classes that will bump the GPA up a bit but it's not the end of the world.