Why Investment Banking? 43 Sample Answers

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I have only heard standard cookie cutter answers before, and I am curious how best to answer this investment banking interview question.

The Safe Answers

Of course, your desire to stand out and leave a strong impression is justified. Interviewers have more applicants than they know what to do with. And yes, they're looking for people that display intelligence, confidence, and certainty in their future career path. But sometimes it's best to stick to the safe answers and just go with what works.

Here is a collection of the best standard responses to this common question from WSO users.

  • CompBanker - Private Equity VP: Stick with cookie cutter -- Don't try to be special or unique; stick to logic and passion.
    • Kyc133enydc - WSO User: Steep learning curve. Result driven environment. Enjoy working under pressure. Significant responsibility.
    • Ideating - WSO User: The best answers would typically be some combination of experience working on big deals, the caliber of your colleagues, gaining a strong financial foundation, and a strong interest in finance.

    Detailed Why IB Answers?

    While cookie-cutter responses are safe, sometimes a little more substance is appropriate/appreciated.

    WallStreetPlayboys:
    I want to work in investment banking because I understand it has a steep learning curve and will allow me to establish a strong foundation for valuation, Excel modeling skills, and understanding the XXX sector. I know the hours will be long, but the time spent understanding and learning about XXX space would give me the opportunity to remain in finance over the longer term.

    Why Investment Banking AnswerThis answer does a few things:

    1. You left him 'bait.' Now he will ask, "Oh really? So what hours do you expect?" So you simply answer 80 low-end and 100+ if a lot of going on.
    2. By mentioning valuation/Excel, you're showing you know what you'll be doing, and you have pitched why it is valuable 'a strong base of skills for *future* on Wall Street'.
    3. Because you never want the interviewer to think you're interested in anything besides banking."

    The Wrong Answers

    While there are very few "correct" answers, there are plenty answers that are just plain wrong. Here are a few examples and how to avoid them:

    • Answers that somehow indicate you are going into the profession to earn large amounts of money or because you eventually want to go to business school/private equity/hedge funds. Even if this may be true, you want the interviewer to think that you are committed to the industry even though he/she knows that, more than likely, you'll decide to leave after two years of service.
    • Why Investment Banking

    • Marcus_Halberstram - Industry CEO: Don't say anything about client interaction. Period. Any interviewer that's said anything about 'CEOs, executives, clients, management teams, and (cringe) the C-suite' are immediate 'this kid doesn't know what we/he will do here' dings.

    What If You Are a Non-Business Major?

    Great answers to this question focus on skill-building, networking, and a love for difficult challenges. You want to emphasize that:

    • Being a non-business major, you are excited to learn the complex accounting and finance skills involved on the job and eventually transform into an analyst that has potential to significantly impact the group.
    • You are excited to work with driven, smart, and motivated colleagues and are looking forward to pushing your limits from a work standpoint.
    • You ultimately want to come off as a positive, 'go-getter' type."

    Law to Investment Banking

    Jbarret34 [Second Year Corporate Associate] outlines why the move from big law to investment banking makes sense for him:

    • I know that I love transactional work, like working in a fast-paced, demanding environment, don't mind long hours, and eventually want to be the one making the deals, rather than a lawyer/banker who only facilitates them.
    • Investment banking makes sense because I can develop valuation/pitching/modeling skills.

    Consulting to Investment Banking

    "WallStreetOasis.com" noted the following if coming from consulting.

    • If you're interviewing for an entry-level junior role, then your response to this question could be, "While I have gained some great experience working in consulting that translates well to investment banking, I feel that I could learn a more useful technical skill set at an investment bank working on live transactions at [XYZ Firm]."
    • For those trying to get into more senior roles post-MBA, a more appropriate response would be, "I like long projects and getting to know clients; however, the transactional nature of investment banking is very appealing to me because you see the results of your work much more quickly. Whereas consulting engagements can last for years, especially when implementation is involved, the average investment banking mandate typically lasts for several months, so you are getting exposed to more scenarios and the learning curve is faster.

    Commercial Banking to Investment Banking

    Onemanwolfpack [Investment Banking VP] Gives those coming from a background in commercial banking some solid advice:

    • 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, "Because I look around at 5 pm 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."

    Asset Management to Investment Banking

    Started your career in AM and want to make a move to IB? Here's some insight on whether or not it's the right choice for you, and if so, how to convince a potential employer you'd be a fit.

    • MandAisOkay [Investment Banking Analyst: If you don't feel you have an actual passion for AM, I would make the switch to IB because it gives much broader exit opps. If you actually enjoy your work in AM and can see yourself in this business for a long time, just stay.
    • WallStreetOasis.com [WSO CEO]: With a background in AM, a strong response to the 'why' question could be, "Although Asset Management allowed me to analyze companies and financials and make trades based on that analysis, where I really feel that I would excel long term is working more directly with these companies and in transactional work.

    Interested in Investment Banking - Breaking In

    The fact of the matter is you won't improve unless you practice. To have any chance at the technical questions, you need to prepare yourself with legitimate questions. The WallStreetOasis investment banking interview course is designed by countless professionals with real world experience, tailored to help you break into investment banking by acing the technical questions.

    IB Interview Course Here

    Comments (416)

     
    Feb 11, 2009 - 11:00pm

    This question has a great deal of really bad answers, and a few safe answers. Stick with cookie cutter -- they are cookie cutter because they work.

    CompBanker

     
    Feb 11, 2009 - 11:08pm

    I always went with, "Three reasons: the work - it's the type of stuff I enjoy, the experience - learn more in two years than anywhere else, you can take your experience with you anywhere, and the environment - I excel in fast-paced, competitive, intense environments." It worked pretty well.

     
    Feb 11, 2009 - 11:53pm

    Yea, you really can't blow anybody away with this answer, you just need to not screw up. All you can do is check the box and move on.

    Nobody has ever gotten an offer with an answer to this question, but plenty of people have blown offers they already had in the bag...

    • Capt K
    - Capt K - "Prestige is like a powerful magnet that warps even your beliefs about what you enjoy. If you want to make ambitious people waste their time on errands, bait the hook with prestige." - Paul Graham
     
    Funniest
    Feb 12, 2009 - 2:45am

    Bottles and Models?

    Jack: They’re all former investment bankers who were laid off from that economic crisis that Nancy Pelosi caused. They have zero real world skills, but God they work hard. -30 Rock
     
    Dec 11, 2009 - 6:26pm

    ul8492:
    can someone pls explain what would be a cookie cutter answer for someone who has experience in ib/pe? thanks in advance.

    A) Do a search
    B) If you have interviews coming up or just want to learn more, try getting the WSO behavioral guide. It includes all the cookie cutter answers to the most common questions.

     
    Dec 11, 2009 - 6:54pm

    Answering "why investment banking?" in an interview if you're a liberal arts major (Originally Posted: 02/17/2012)

    In today's blog, I wanted to share our take on answering this question if you are a liberal arts major. As always, we'll follow a simple template: 1) a brief description of how to think about these questions, 2) what represents a poor answer, 3) what represents a good answer, and lastly, 4) an actual example of a great answer.

    I see that you are an art history major, so why finance?

    Investment banking offers liberal arts majors one of the few relatively well-defined and challenging career paths available to "smart but skill-less" undergrads. Obviously, many also enter the industry with the obvious intention of making a great deal of money. Of course, answering this question in an interview begs for a little nuance. This question, regardless of whether it is posed to a liberal arts major or business major, should also always be looked at as an opportunity to tell your story.

    Below are some sample answers (poor/good/great)

    Poor answers
    Poor answers to this question would be answers that somehow indicate you are going into the profession to earn large amounts of money or because you eventually want to go to business school/private equity/hedge funds.  While all this may be true, you want the interviewer to think that you are committed to the industry even though he/she knows that more than likely you’ll be one of the analysts that decides to leave after two years of service.  As an interviewer, it is better to hear the “reassuring” answer rather than the brutally honest one even though the interviewer knows you are being political.

    Great answers
    Great answers to this question focus on skill-building, networking, and love for difficult challenges.  You want to emphasize that being a non-business major you are excited to learn the complex accounting and finance skills involved on the job and eventually transform into an Analyst that has potential to significantly impact the group.  You also want to relay that you are excited to work with driven, smart, and motivated colleagues and are looking forward to pushing your limits from a work standpoint.  You ultimately want to come off as a positive, “go-getter” type.

    Sample great answer

    “I do not regret majoring in art history.  That said, my interests have evolved towards more analytically challenging pursuits.  This past year, I have taken more quantitative classes like computer science, economics, and accounting, and believe that investment banking is an exciting challenge that marries my interests in critical thinking and quantitative analysis.

    Specifically, banking interests me because it presents an opportunity to develop substantive analytical skills, while developing a close network of colleagues. While working long hours is scary to some, to me, it is in a strange way exciting. I have a very strong work ethic and I am excited to be involved in work that helps companies be better off strategically and financially.”

    Matan Feldman Founder, Wall Street Prep Learn Financial Modeling
     
    Dec 11, 2009 - 7:37pm

    Why IB over Private Equity? (Originally Posted: 03/29/2012)

    Hey guys

    Ok short story is I have worked part-time in private equity for final 2 years of my degree.

    I am now about to graduate and am in final round interview at a BB.

    My feedback from my 2nd round interview was that I need to stress my commitment to M&A and advisory over private equity?

    So far I have got the following points:

    1. Advisory exposes you to much higher deal flow
    2. Advisory allows you to build a broader foundation in finance.

    Please help me for a few more.

     
    Dec 11, 2009 - 7:42pm

    Why would someone pick investment banking over consulting? (Originally Posted: 09/18/2007)

    Besides the higher pay, is there really any reason to choose i-banking over consulting? If I'm not mistaken, they are both considered "finance" careers thus require similar skillsets, although a consultant requires more leadership skills whereas an analyst just gets bitched at to crunch numbers and perform excel monkey tricks all day. And consulting provides a better quality of life, better exit opps, and a better chance at a top MBA program. Top consulting firms are also harder to get into than top banking firms, thus more prestigious, in a way.

    I would really like some thoughts on this, because as a sophomore who still has time to shift focus on future career paths, I'm wondering if there's really anything i-banking has to offer over consulting besides a higher salary (obviously an important selling point). But if I'm asked in an interview "Why i-banking and not something else like.. say, Consulting?" I seriously have no idea what the hell i could say besides "I'm a greedy bastard and want the bragging rights of making six figures at the age of 22." Any other entry-level career I could find genuine reasons for why I'd prefer i-banking, but consulting has me stumped.

     
    Dec 11, 2009 - 7:52pm

    Why Banking? - How to answer this? (Originally Posted: 08/17/2011)

    Guys, I have been preparing for ib interviews and have prepared fit questions well (atleat i think so )....however, the basic question in every interview is why IB?

    i have spent ages on this question, but somehow can't get the unique and spark factor...ofcourse telling the truth that i am interested in money will be suicidal in the interview...

    can people share their stories that recruiters bought?? I can draw some parallels on those and create my unique

    Thanks monkeys

     
    Dec 11, 2009 - 8:19pm

    The dreaded... "Why Banking?" Question (Originally Posted: 02/08/2008)

    Guys, I'm get slaughtered by this question... My work experince consists of one successful company I started (operating revneues of $200,000 in 3 quarters) and working in the expansion process of another company (raising $600,000 in capital through angel investors and a state-wide loan). Here's the questions I ALWAYS get:

    "You seem to have an entrepreneurial background, why not continue working at these successful businesses.. why go into banking??"

    followed by

    "You understand banking isn't as exciting as what you've done right? Most of it is pretty boring, monotonous work..."

    When I told an interviewer I enjoyed working with the financial asepcts of the company and not so much the operational side, and that I wanted to immerse myself in fiancne and to learn as much about it as possible, he said... "if you're really interested in finance, why not look to go into derivatives or futures? That's more finance that what a banker does. A banker focuses more moving business and pitching ideas" and at some point he said, "have you considered research? why banking?"

    What is a good way to answer the questions to completely set the interview back on the right track? The standard "I want to learn a lot," "I like the fast-paced environment," "I'm in it for the excitement" answers haven't been working well. Could you guys aid me tailoring an answer that dominates?

    Thanks

     
    Dec 11, 2009 - 8:24pm

    Why Middle Market Investment banking (Originally Posted: 11/06/2007)

    This is for folks who want to be in or in banking:

    I am curious if everyone could share why did or do you want to be in I banking?

    Folks who have chosen BB or Middle Market or vice versa, why did you make or want to make that descision?

    All constructive comments are welcome..

     
    Dec 11, 2009 - 8:28pm

    Am I wrong about why banking? (Originally Posted: 06/20/2014)

    Had an info interview with a banker and I said one of the reasons I was interested in investment banking was I liked the client interaction aspect of it. However, he said that this was the wrong reason to like banking because junior bankers would not be given the opportunity to meet any client. He said that if I were asked the question I should respond with something along with steep learning curve and exciting work. Would I have gotten dinged if I even mentioned about client interaction? Should I just go with what he said?
    Can someone with interviewing experience shed some light on the topic? Thanks.
    @"SSits"
    @"Marcus_Halberstram"

     
    Dec 11, 2009 - 9:02pm

    How do you guys answer the why questions in Investment Banking? (Originally Posted: 02/27/2013)

    I think it happens to most of you. I was trying to reach out to some of my alumni these days. We talked a lot about the finance and investment banking. However, when it comes to why you wanna do it? I sometimes said well, I want to make most of my time as a young man and I like challenging works. Plus, I has a lot of good exit opportunities...blah blah blah......I know it's been a tricky question, you can't just say well I am greedy and I love green, right? So what's your answers?

    Live like an artist and work like an analyst......
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