A Conversation on Selective Eligibility –Investment Banking

Updated: Jul 18, 2020

What if I told you that a student who studies classics at Oxbridge is more likely to join an investment bank than one who studies economics or any other numerical related degree at a university at the bottom half of the league tables. Absurd, right? Some may say, how can students of nill mathematical calibre be employed to deliver the deals of tomorrow?

Well, I thought the exact same, until very recently to be quite frankly honest. But when you break down what it is that makes a company flourish, you start to notice how heavily reliant it is on soft skills; however, we will come to that in due time.

To start with, what is investment banking? Most people cannot answer that question beyond the financial crisis of 2008. Still, it is more than 'A Big Short', investment banks help companies and governments raise capital by issuing stock or borrowing money. They also act as advisers and go-betweens on mergers and acquisitions. The capital markets are a fast-paced, high-stakes, and highly regulated environment. What we have just spoken about is principally front office related; the middle office is essential in supporting the front office by typically managing risks and calculating profits and losses, being less customer-focused. Back office 'investment bankers' are receptionists, but they won't tell you that because it doesn't make them feel as notable as eating in the work cafeteria at 9 pm, after a long shift, with the actual deal closers... the shade is uncalled for, but essential to understand why an Economics degree from a lower-tier university requires you to organise everyone's name in chronological order instead of facing clients regarding their capital. If you have picked up on anything from what I have just said, it would be that front office investment bankers make an abundance of wealth compared to the other offices. The salary of a first-year analyst in a front-office role can range from £60-90K after bonuses. Pretty impressive if you ask me, and first-year associates' pay is anywhere between £140-190K, depending on where you work.

Which universities do Canary Wharf banks target? Apparently, nowhere specific, so the question of 'does it exist?' can be debated, but stats and reports prove in favour of 'target universities' being a genuine thing.

A survey was carried out on LinkedIn ranking, which universities are the most common amongst investment bankers.

The rankings were as follows:

1. London School of Economics and Political Science (LSE)

2. University College London (UCL)

3. University of Cambridge

4. University of Oxford

5. University of Warwick

6. Durham University

7. University of Manchester

8. University of Nottingham

9. University of Bath

10. University of Bristol

The majority of banking recruiters screen applicants without their names, university and any other identification. Still, students from the top 20 universities end up finding themselves in a busy tube heading straight for Canary Wharf station at 7:45 am, reconsidering all acts of hope for a fuller sleep from the previous night, not to mention whilst ingesting the strong smell of dark coffee from the breath of others.

The application screening involves a series of games and tests to examine the way candidates think and approach tasks. So, if it is a matter of obtaining strong results in the tests, then inevitably there is a bigger picture? I am sure you remember when I mentioned the term 'soft skills'.

"Soft skills relate to how you work. Soft skills include interpersonal (people) skills, communication skills, listening skills, time management, and empathy, among others. Hiring managers typically look for job candidates with soft skills because they make someone more successful in the workplace. Someone can be excellent with technical, job-specific skills, but if they can't manage their time or work within a team, they may not be successful in the workplace."

Your 'soft skills' are tested from the very first stage of the application process. The situation judgement test is a leading example. Situational Judgement Tests assess how you approach situations encountered in the workplace. They are built around hypothetical scenarios. Based on your answers, a score will be calculated on how well your competencies align with the company. Bearing in mind front office roles require you to speak to clients, your communication must be to the highest level.

Not to generalise, but students at top universities tend to communicate better, orally and in writing. For this reason, they are at an advantage when completing the early-stage tests and interviews. Their style of approaching and answering questions is competent. And when in client meetings or over the phone discussions, this skill is to the utmost benefit. But that is not to say you cannot become a front office banker unless you attend one of these 'top' universities. The truth of the matter is it comes down to the individual - how you are as a person and your character. Motivation and talent will never go unnoticed. So by chasing experience opportunities, from a target university or not, you will be putting yourself in an ideal position when applying for internships/placements.

Now that we have identified the problem, how do we solve it? How can one improve their soft skills? There are several cost friendly strategies that you can

apply to your day-day routine to heighten your speaking ability. My preferred one would be to watch Netflix actively. Yes, you heard that, right! By 'actively watch', I do not mean binge-watch your favourite show hours on end. Watch a show that you believe good English is spoken in, and try to mimic what they say. A good show to do this with is Suits.

A few more ideas:

1. Request feedback from colleagues, friends/family.

2. Practice having a 2-minute conversation and record them.

3. Read consistently, even if it is 20 minutes a day.

4. Experiment with what works for you!

The connection is established! We now understand why applicants from top universities are more successful than those who are not, and it has got nothing to do with prejudice. Here is a little food for thought before we end our conversation for today, "We can teach you how to be investment bankers, but we can't teach you how to effectively use your soft skills" - Paula Humphrey, JP Morgan Recruitment.

By Ali Hussain - BA Economics at University College, Durham University

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