What's the failure rate for aspiring investment bankers?

354231's picture
Rank: Senior Orangutan | 400

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.

Comments (48)

Aug 6, 2016

If someone doesn't break in, they naturally won't post about it on WSO as they no longer have anything to gain or contribute to this website. If anyone with a desire to work in investment banking qualifies as an aspiring investment banker, then the failure rate is probably close to 99%.

Aug 6, 2016

That's insane. By aspiring investment banker, I mean someone who actually puts in the effort to try to secure a position. Say an individual who since his freshman/sophomore year tried to network as much as possible, maintained a high GPA, and learned things relevant to IB. I'm not talking about a student that decides to apply online for a position his senior year of college with zero experience and a shitty GPA.

Mar 25, 2018

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Aug 6, 2016

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.

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Aug 6, 2016

Yea that's true. That being said, it would be nice to know just in terms of people getting their hopes up. If there was only a 1% acceptance rate across all investment banks I'd doubt there would be many people that would dedicate all their effort into breaking into the field, myself included.

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Aug 6, 2016
iConsult:

The problem here is there's just too many variables

Isn't this the exact type of answer that banks are paying analysts not to say in reports? Every difficult problem has a lot of moving parts. Anyone can make the easy plays.

"Hey junior, give me a LBO for Staples by Friday."

"Sorry boss, there are too many variables". Good luck with that approach.

I would think a question like the OP would be right up any aspiring young problem solver's alley.

Aug 6, 2016

The difference is with Staples you have the necessary information for a good model. You have financial statements, interest rates, typical debt to equity ratios etc. Here we have no info. This question is like your boss asking what he should pay for a large retailer. No other info given. What would your response be to that?

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Aug 6, 2016

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.

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Aug 12, 2016

It's still important to be realistic. My chances of making it in the NBA were maybe 0.0001%, so I decided to focus on finance instead of college basketball, as my chances were a hell of a lot higher.

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Aug 6, 2016

So OP should also shoot for the NBA if he likes playing basketball?

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Aug 6, 2016

No one will post about his/her failure but you can easily research the % of IB acceptance across the street. Then again that's just common sense.

Aug 6, 2016

Where do I find this information? I've only found two BB stats through articles so far.

Aug 7, 2016

What are you trying to accomplish? It's common sense that getting a highly desirable job out of college is very improbable.

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Best Response
Aug 7, 2016

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

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Aug 7, 2016

I agree. I think the most accurate measurement would be what percentage of people who interview end up with an offer. But even that doesn't account for certain aspects.

Aug 9, 2016

Exactly. Back when I had to sort through resumes you would be surprised at how picky you get when you have an absolute mountain of them. I get it, I came from a non-target, but I'm probably also one of approximately 10 people to make it in the last 50 years. If you had someone I trust introduce you as someone worth talking to your chances go up exponentially. Remember, LinkedIn dramatically helps to level the playing field in regards to networking. Now go to work.

Aug 8, 2016

This is an interesting thread... I would be even more curious to know this:

What % of WSO members that are targeting investment banking get in?
What % of WSO members that invest in the WSO resume review service and network get interviews?
What % of WSO members that invest in the ib interview prep pack get in? etc etc etc...

While the general online resume drop (often known as the black hole) seems to only yield a 1-5% INTERVIEW rate, it's no secret that OCR is a much easier road...

What I will say is that I would assume people who find out early (freshman/sophomore year) what they want to do (they stumble on WSO and decide they are going to aim for IB, for example) have a HUGE leg up on those that just decide to apply late junior or senior year.

Side note: we have been doing an very interesting experiment and looking at all of our past testimonials (for resume review, wall st mentors, ib interview guide, etc etc) and seeing where these people have ended up (only through resume review and mentor so far)...

It's pretty encouraging so far (or course there is selection bias since these people were obviously more motivated to invest in themselves)...to the point where we are going to start showing "Goal: result: " on all our testimonials to show all the badass success you guys have! :-)

Not sure there is any really good way to track this though...

Aug 8, 2016

yeah I think the obvious problem here is the people shelling out money for these things generally have done more research and are more committed to breaking in. That said, still interesting for sure.

Aug 9, 2016

Well I definitely hope I can one day be one of those testimonials!!!

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Aug 8, 2016

What I've found out at schools in Scandinavia is that almost anyone that actually invests some time in upholding a solid GPA and gets decent work experience while focusing on preparing for interviews is successful. I would think that the competition is more fierce in NY but since most of us are shooting for London, which is also highly competitive makes me wonder if not the vast majority of applicants just aren't prepared enough.

There is a big difference between wanting something badly and working hard to achieve something. The first often leading nowhere while the latter often leads to success in some form or another.

Aug 10, 2016

The "target" factor is "less" relevant in Europe as we don't have OCR although there is still core unis which they target ect.

Aug 8, 2016

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.

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Aug 8, 2016

Thanks for sharing dude. I wouldn't say you've failed so far considering the fact that you haven't accepted defeat. Best of luck with your search.

Mar 25, 2018

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Aug 8, 2016

Thanks for sharing. I think there a lot of similar stories out there we don't hear about as often.

I certainly have some similarities to you; the average joe just doesn't understand why anyone would want to "do" finance.

Aug 9, 2016

I really wouldn't call that anywhere near a failure. You got a "decent" job and don't have to slave away in IBD for 2 years paying a shit ton for rent and expenses. I think if the job you have now pays more than the ER gig then it wasn't such a terrible decision. Now if it was GS ER vs your job then the reaction would be a lot different. There has been somewhat of a IBD remorse I've noticed from some that are more experienced on WSO and are IB analysts and associates. IMO MF PE is overrated but i don't really express that opinion much due to my lack of experience. My end goal is just to get a FO job that isn't an absolute sweatshop (yes, some banks are that bad). I also don't think BO is that bad considering the hours, pay, and cost of living isn't too bad at all. Not to mention you can have a pretty decent brand on your resume.

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Aug 10, 2016

In what world does healthcare corp fin. pay more than ER? Did this ER shop have more than 5 employees?

Aug 11, 2016

You'd be surprised how much some of these no-names pay, especially in non-NYC type areas. Hell, look up GS GIR in SLC and it's sickening!

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Aug 11, 2016

Yeah, I echo what belichick said. The small ER firm offered $55k + guarenteed every year 5k bonus not tied to performance or anything, so 60k. The healthcare company is a top tier organization and while pay isn't what people are making in NYC, it's slightly over 60k, no bonus.

Aug 9, 2016

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.

354231:

Yea that's true. That being said, it would be nice to know just in terms of people getting their hopes up. If there was only a 1% acceptance rate across all investment banks I'd doubt there would be many people that would dedicate all their effort into breaking into the field, myself included.

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...

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Aug 9, 2016

This was an extremely informative post. I think the timing part is arguably the most forgotten part of recruiting and could be tied into the luck part. One of my mentors graduated in 2008 and has told me multiple time that things would've been MUCH more difficult if he graduated in 2009 or 2010 from his non-target.

Aug 15, 2016

+1 This is a really great post. You may be down, but you're never out.

Aug 9, 2016

I'd actually equate it with applying to an Ivy for undergrad (think of the Ivies as BBs).. Even though harvards acceptance rate is 5%, no one has an actual 5% chance of getting in.. Probably around 60% have ZERO chance of acceptance, not because they aren't smart enough, but simply because there aren't enough spots.. An Asian/white kid from New England with a 4.0 and 2200+, sure they're smart but essentially 0 shot of getting into an ivy without any hooks (sorry but I don't really care about your cousins uncles friends son who totally got into Stanford with a 1700 and a 2.0 gpa).
Anyways, 60%+ of applicants to ivies don't even have a shot of getting in (think of this as applying online to a BB). For everyone else who makes it past that first screen, their odds go up immensely.. If you're a legacy, your odds of acceptance is now at 40% Recruited Athletes, almost 100%.. Dad donated a building? get over a 2100+ on the SAT and you're in.. Even the extremely smart normal kids with no hooks at this point probably have around a 20-30% shot of acceptance.. But for these kids the margin of error is extremely small and can make or break an application. This is for kids with a 2300+, valedictorian, national merit scholar, maybe a national science award. The kids who fit this mold who get accepted are virtually indistinguishable from the ones who get rejected, so it's primarily based on luck and how many spots the school wants to dictate for "smart kids with no hooks" ..
So once you average out these different acceptance rates, you get Harvard's 5% rate.. which is touted so much but is essentially meaningless to decipher ones odds of getting into the school.
POINT BEING: acceptance rates are meaningless for IB, just like for college admission.. But unlike college where you can't control if you are a legacy, urm, recruited athlete (sort of), for banking you can still NETWORK and get relevant experience and then your odds of breaking in go from ZERO to something MUCH higher

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Aug 12, 2016

Getting into a top school is easier than getting into a top investment bank. With college, you just passively send in an application and it's guaranteed to get read if your academics are at least half-ass. Getting into a "prestigious" job is almost impossible going that route.

Nov 1, 2017

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Aug 12, 2016

Agree, IMO you don't want to be a 30-year-old IB analyst anyway. The job itself sucks, so occasionally getting rejected is a blessing in disguise.

Aug 9, 2016

I think Dunning-Kruger may be rather strong among prospective IB candidates...

Aug 10, 2016

This American Life?

Aug 9, 2016

69%

Aug 9, 2016

My story is similar to unbreakable glass.

I recently graduated from a semi-target school in the SE, with an overall gpa of 3.7. I started out as a pre-pharmacy major and switched to finance after my 3rd year of college. After switching, I signed up for a class outside of my college curriculum that focused exclusively on investment banking, which is how I first learned about and decided this is what I wanted to pursue. I also took a financial modeling course as well. The following summer, I landed an analyst internship at a small boutique bank, and dealt mainly with private placement deals. Going into my junior year, I had the chance to interview with 2 BB, but did not get a second round. Around the same time, I was interviewing at Big4 valuation groups, as I saw this type of work very comparable to IB. I ended up getting an internship and full-time offer and accepted. Long story short, in my case, I never got to apply to most of the IB firms I had intended to because of the timing of when I received my offer and when IB recruiting at certain firms began. I thought about turning down the offer and trying my luck with full-time IB recruiting, however, my risk tolerance was not that high. During my time before full-time employment, I have been networking with recent grads and people in the industry to hopefully, put myself in a good position when it is time to lateral into IB.

Aug 9, 2016

I used to lead the campus recruiting team at my BB for my school, which was a semi-target. We'd generally get 250 - 300 resumes from qualified candidates through the school's application system - you had to be a business, econ or engineering student with at least a 3.5 to even apply. From that pool we'd pick 30 candidates for on-campus interviews and generally invite 4-5 kids back for final rounds, yielding 3-4 offers. So for one bank you could say that we had about a 1% success rate from qualified and interested students. What I can't account for is how many of those 250 - 300 (or the 30) were able to get jobs at other banks. From my interviewing experience as a student the 30 kids who got interviews were pretty consistent from bank to bank.

Aug 10, 2016
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