Given the number of messages I continue to receive with questions regarding my switch from commercial banking to investment banking, I thought it'd be helpful to provide a few guidelines for those looking to make the switch.
How to Break Into IB from Commercial Banking?
Below is an overview of how to break into investment banking from commercial banking.
Target Middle Market or Lower Tier Banks
Aim low(ER). I guess you could technically move from a middle-market commercial bank into the TMT group at Goldman, but your time would be better spent focusing your targeting on the middle market banks, Big 4 corporate finance groups, and boutique offices.
Find Commercial Bank Alumni in IBanks
Find former commercial bankers in the industry. Your odds to get hired are much higher if you can find banks who employ a few former commercial bankers who are more likely to sympathize with your situation and willing to "give you a shot". Not sure if it's a coincidence, but one of our senior bankers was previously a commercial banker.
These are the only real tips I have for those looking to land interviews. There is no magic formula for securing these interviews. You'll have to network, cold call, email, and search like all the other monkeys. The majority of my comments are for those who have already entered into the hiring process and want to get an IB offer.
Know the Comparison Between CB and IB
Highlight the similarities. Despite what many on this forum would want you to think, commercial banking and investment banking are a lot more similar than different. In your interviews, point out that you are already comfortable covering multiple industries at once, dealing with the ebbs and flows of transactional-based workflow, financial modeling (albeit more basic), and that you enjoy and understand the nuances of dealing with business owners who are considering large financial decisions for the future of their company.
Be Prepared to Address the Differences Between IB and Comm. Banking
Anticipate their doubts. Any IB will assume the following three things about you during the interview process:
- You can't handle the hours in IB
- Your modeling skills are sub-par
- You weren't worthy of breaking into IB out of undergrad
Some would say it's not prudent to bring these "areas of weakness" up in interviews, but I believe it's better to address these head-on, rather than let the bankers draw their own conclusions, especially if you have strong supporting evidence to refute their suspicions. For example, I explained in my interviews that I was already working 60 hours a week in the commercial bank's most intensive group and that I was aware and willing to increase that workload even further. I had taken a modeling class after graduation, and the reason I didn't pursue IB out of school is because no IBs recruited on campus and I was less aware of this industry as a 21 year old. All fair answers and (hopefully) laid their suspicions to rest
Be Prepared to Prove Your Interest in Interviews
Demonstrate you belong. Given your "atypical" background, you will have to try that much harder to show you belong compared to your interviewing peers who may already be working at other IBs and looking to lateral. Read up on the latest M&A deals, know your technicals frontwards and back, and show an over-the-top eagerness to break into the industry. In response to the "Why switch from CB to IB?" question, I recall responding with "because I look around at 5pm seeing everyone head for the exit, and I know I have more to offer and want more out of my career than that". May have been cheesy in retrospect, but I believe that's when I won over the interviewer.
Hope this helps for those looking to move over to "dark side", and remember, the longer you stay in commercial banking, the harder it is to make the switch!
Want to learn more about commercial banking? Check out the video below.
Read More About Commercial Banking on WSO
- Strategy For Moving From Commercial/Corporate Banking To Investment Banking - Thoughts
- Commercial Banking Vs Investment Banking
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