Investment banking internships this summer and last: why so competitive?

[TheHouseofGirth]

Looking for some advice on IB internships. We are foreigners in the Uk and unfamiliar with the system, so please forgive any stupidity. DS is finishing his second year studying economics at a magnet uni, in the top five unis for economics. Not Oxbridge but close. He is in the top 1% of his class, with an average of 81%.. Also part of various relevant student societies. 4 Astars at A levels, including FM.

For the past two years, he has been trying to get a summer internship in IB. Applied to over 60 and made it to the interview stage in a few, but unsuccesful. We did advice him to apply more widely to thinktanks, consultances, and charities, but he said that applications are so time consuming he wanted to focus on IB internships as that is what he really wanted to do. I could see they were really complicated and he had tons of tests and interviews. So I let him do the best he could. Now he doesn't have anything for this summer, and it's too late to apply to other internships. In hindsight he should have set his heights lower, but it seems incredibly competitive this year. He is by no means shy or introverted; I think he presents well, but I guess he must be doing something wrong.

Would anyone have any advice? He seems certain that not having an internship this summer means he won't get a graduate job next year when he graduates and will have to do a Masters. It's harder for us as he is not yet a UK citizen ( though eligible for ILR next year).

Long hours can be brutal. My sons, the lawyers, in a way have dodged a bullet going in-house when qualifying in terms of hours but pay is less so it is always a difficult decision and life is very expensive. They have a friend who is a quant, another in a bank and another who is qualifying via ICAEW at a very big firm. I have a relative who is in IB.
I feel that so much time is wasted for students on applications and I wish there were a better way. May be we need a clever AI that allows a student do spend 30 seconds and apply for and be assessed in one hour for these jobs rather than having to spend day after day (never mind 2 week paid vacation schemes with law firms etc) which may get you nowhere.

The internships are extended job interviews for graduate roles.

There are more graduate roles available than internships though so all is not lost.

What sort of IB does he want to do?

I'm more familiar with the quant side and that tends to be computer scientists and mathematicians.

Does his degree have stats and mathematical modelling in?

University societies are not really going to be relevant.

He might find this helpful if he's getting mathematical questions.

www.amazon.co.uk/Heard-Street-Quantitative-Questions-Interviews/dp/0994103867?dplnkId=92ace8a7-75a9-4c57-8b72-b118ab8dfd96&nodl=1

I'd be interested to know if your son went to a private school before uni. I've heard that it's a very difficult time to find a graduate job as a privately educated, middle class man, because of the strong emphasis on diversity in recruitment.

Those with DC in this industry? How are the hours actually?

I work in an IB and help with graduate recruitment for front office and operations.

Sports are good.

Oxbridge and similar are not the draw they were unfortunately; we are actively encouraged to hire from a broad spectrum of universities nowadays.

He just needs to keep trying; but it is very difficult. Does he have any actual paid work experience? This is also important. Can be anything; retail, bar work. This is the main issue with Oxbridge grads; they’ve no work experience.

I work for a Tier1 US IB; schools aren’t really looked at, graduates are from all over Europe so schooling only matters as far as UCAS points (or equivalent)

This does raise a point though; you are also competing against graduates from all over Europe; Brexit has made no difference as IB’s are happy to provide sponsorship.

My previous employer (large consulting firm) the internship roles were harder to get than an actual grad job. That's how many people applied vs places. So by exclusively applying to banking he's probably just narrowing his field too much.
I'd suggest he tries for a few other role types perhaps in a less competitive area. Ultimately work experience helps even if it's not top tier work. So he should focus on getting a job not just a job in the desired industry. I could definitely tell those who were grads and had done virtually nothing else vs those who'd worked a bit and fwiw I was always happy if they'd had a stint in retail or something like that as actually they seemed kind of maturer

I wish there were some statistics on this. AI or someone with a lot of time could go through all the linked in profiles of graduates in the high paid jobs in London to gather those stats so we could see if that is so or not. People have a lot of anecdotal evidence eg I heard that in a few law firms where training contracts were withdrawn from people who had failed the new SQE exams the ones failing were the contextual candidates. That might be a lie or only relevant to one firm. I have sen photos of whole cohorts who were almost 100% female or BAME, but it is all anecdote and it might be the opposite - very hard to get in from any background other than being white male educated in private school who is middle class.

Echoing what others have said re joining a City firm with experience.

When I graduated - a few decades ago now lol - I applied for a number of City banks, as did a number of my college friends. We all had good degrees but the only one who was successful at this point, was the one who'd had a gap year and had worked part of it on the floor of the Chicago Futures Exchange as a runner.

Me, I got a job in a mid ranking professional services firm, got 2-3 years experience under my belt and then started applying again - the difference at that point between gaining interviews and offers was astonishing.

Obviously, times have changed, but experience is probably still definitely valued

https://www.evelyn.com/careers/early-careers/university-students-graduates/

Investment banks have slashed internship and graduate recruitment numbers this year. It is a global marketplace and is increasingly competitive.

There tend to be fair strict controls round this sort of nepotism these days as part of regulation of the banking industry

Or the going rate for the job if higher

I disagree. You can get your foot in the door easily if you know someone.

I interviewed candidates for internship programs before. They are competitive. On our program we did have 1 technical and 1 behavioral interview. For technical he would have to sit and study, no way around it..For behavioral he needs to again sit and study. All the questions we ask, we are looking for examples of his behaviour on certain situations. He needs sit and think and practice how he will answer behavioral questions so that he has examples at hand and he already knows what behaviour to draw attention to. We have a list of example behaviour patterns to know which behaviour to grade higher. Every interviewer grades the candidate at the end of the interview and recommend to offer a job or not. He needs to be graded either very strong or exceptional on both interviews otherwise he will not get an offer. Our graduate programs are usually mostly filled by summer interns but we still hire some graduates as well. Tell him to apply those programs as soon as he sees the job ads and not wait for the closing date. We start interviewing and offering the positions right away . If he waits until the job closing date there might not be any open role left.

Me too. I know a manager who made someone redundant and hired someone they know from 'home' in their place. It baffles me how they get away with these things.

Agree that top universities are no longer necessarily the draw they once were - Goldman Sachs’ interns this year aren’t even necessarily from RG universities.

Agreed, this really isn’t a thing now

Yes, firms are huge on diversity and inclusion. They want a broad range of people from all different backgrounds. They specifically look to encourage those from poorer backgrounds and not privately educated students with a first class degree.

Sorry I don’t have much advice beyond trying to maximise any kind of work experience on the CV - it will not only make the CV more competitive but it will also help dramatically during the interview process to illustrate answers to questions etc

I also wanted to mention a few facts based on my own experience.
I work in a big investment bank in London in a front office role and have been in this industry for 25 years. Went through the grad recruitment process myself but would never be hired today - some of the CVs we get today are astonishing (although I must say the reality in interviews can be very different and many times I have been disappointed by the IV performance of a candidate whose CV was very impressive).

I have been conducting grad interviews for the past 10 years (and summer interns beforehand but can barely remember). I confirm that we do get very clear guidelines from HR about the diversity profile of the candidates we can make an offer to. Over the past 3-4 years or so, I’ve been conducting interview sessions knowing that we would only be able to offer to a female candidate because the male quota had been exceeded in previous sessions or by other departments, even if the males were far superior in interviews. HR wouldn’t budge... We also have specific interview sessions for BAME students.
So I confirm being a white male can be a disadvantage in our IB application process. I don’t want to debate about the merits of these hiring practices but just wanted to share some facts.

As for the representation of Oxbridge grads vs other universities I agree we have less than we used to as HR have greatly broadened the pool however many of my colleagues (Oxbridge educated) still tend to look more favourably towards Oxbridge grads… I can see it clearly during and after interviews when we debrief.

Last but not least nepotism is forbidden - we do get compliance trainings every now and then about it.
What we are allowed to do is to direct these applicants to the bank’s careers website, and in some cases we can drop a line to HR to say we recommend the person who’s just applied. It might help them to get an IV with HR but then they will have to go through all the hurdles just like anyone else. I’ve never done it but I know some colleagues who have (and it didn’t work).

Good luck to your son

I’m surprised you ask why it’s so competitive. The same reason your DC wants to get in to investment banking, is the same reason thousands more do. It’s very competitive indeed because of how lucrative it can be.

It is very lucrative (my colleague earned 8 figure bonuses).

I can only speak for corporate finance but it's an extremely unforgiving environment. My younger son is quite keen to do an ACA and go into CF but I'm not sure he has the right temperament.

Your employer pretty much owns you so you end up constantly missing social engagements, particularly at the weekends. There's a hire and fire culture and it's very dog-eat-dog. The work is very interesting but your contacts are at board level which can be stressful when you're in your early 20s and trying desperately not to make a mistake. Promotion meetings were like a gladiator show.

I have some good friends from that job but when we get together, we laugh about how ridiculous it was at times. I'd rather my son worked for a big four in their M&A advisory as it's not quite so extreme in terms of culture and work-life balance.

I forgot to add that there has been a slowdown in the number of M&A deals and IPOs given higher interest rates and fears of a recession which probably doesn’t help the number of spots available for grads.

When your DS graduates he can take a gap year and do a couple of off cycle internships (yes, they are a thing) and apply for a Masters. If the off cycle internships go well, he may well do his Masters with a job offer in hand.