by Brian DeChesare Comments (22)

What’s The Best Major For Investment Banking?

Investment Banking Majors Compared
Many high-school and university students with an interest in finance naturally want to know, “What’s the best college major for investment banking?”

The answer to this question has changed over the years. And these changes have made your university major both less important and more important.

Let me explain…

Investment Banking Majors: Assumptions and Constraints

In this article, I am making a few important assumptions:

  1. You have to pay for your degree, either upfront or by borrowing money.
  2. You are attending a relatively expensive school that will cost at least tens of thousands of dollars in total.
  3. University degrees will continue to be required for jobs in finance, especially in the most competitive fields, such as investment banking and private equity.
  4. You are interested in a finance career, but you also want a good “Plan B” in case you graduate during a market crash or recession, or you decide against finance.
  5. You are a practical, logical person who wants to achieve a decent ROI on the time and money you spend on the degree.

Some of these assumptions may not be true for you.

For example, maybe you have wealthy parents who are paying for your degree, or you’re in a country where higher education is free or very cheap.

Or, you have a philosophical objection to this concept because you believe that a university education should offer “learning for the sake of learning.”

Or, you believe that the entire university system will collapse, so official degrees will no longer be required, and trade schools will take over, similar to what’s already happening in software.

If that’s you, please stop reading right here. You might be right, but this article is not for you.

Instead, we’re going to focus on the average person’s reality:

Why Does Your University Major Matter At All?

Back in 2005 or 2010, your university major mattered because:

  1. undergraduate-level recruiting took place later, so more of your grades came from your major, and
  2. there were fewer ways to learn accounting and financial modeling independently.

But as of today, both of those – and more! – have changed.

The IB recruiting timeline is now hyper-accelerated, there are far more self-study options, and careers in “high finance” have become less unique compared with ones in technology, sales, or even real estate.

And even if you start early and do everything right, the randomness and timing of the recruiting process mean that you might end up without an IB offer.

So, your major matters for three reasons in the short term:

  1. You need to earn a good GPA – at least a 3.5, and ideally over 3.7 if you’re at a lesser-known school – to have the best shot at winning interviews. A low GPA is the most difficult weakness to overcome in interviews, so you don’t want to pick something that makes your grades plummet.
  2. You want to signal that you’re competent and intelligent, and a major that’s at least moderately difficult will give this impression.
  3. Your major is now more important for “Plan B” options in case you graduate into a market crash or recession, or you decide against finance.

A few other important points include:

  • If you’re an international student studying in the U.S., you want a degree that qualifies as STEM so you can stay in the country and work for 36 months after graduation. Many degrees count as STEM (Google it), including some that are a bit of a stretch.
  • Regardless of your official major, you should take classes where you learn practical skills that you can apply directly to high-paying jobs.
  • Finally, you don’t want a major that crowds out your time for other activities, such as networking, internships, and student groups.

Based on all of that…

Here’s my recommendation for the Best Investment Banking Major” (or “Study Plan”):

  • Major: Accounting/finance (or, if your university doesn’t have these specific majors, something that has coursework in these areas).
  • Minor: Computer science, math, or statistics.
  • You should also consider taking at least 1-2 writing or communication-intensive classes because plenty of students are good with numbers, but many of them cannot communicate with other humans.
  • If you’re an international student, you may have to flip the order so your major qualifies as “STEM.”

Why This Major/Minor Combination?

This combination is special because it:

  • gives you the skills required for finance careers
  • makes you seem competent/intelligent, and
  • gives you good “Plan B” options in case you decide against finance.

It should not be overly difficult to earn a decent GPA, and if you run low on free time, you can drop the official minor and make it a few extra classes instead.

Also, you can front-load the easier classes in your first 1-2 years to boost your GPA by the time you apply for internships.

If you want to be a quant, you can flip the order and pick math or CS for your major and accounting/finance for your minor.

Here’s why each specific component in this plan matters:

  • Significant Accounting Coursework: Accounting is, by far, the most important “technical skill” for investment banking, private equity, and many hedge funds. And a lot of mid-level and senior bankers don’t understand it that well!
  • One or Two Corporate Finance Classes: Most universities do not offer courses that delve into the real “corporate finance” work done in IB/PE roles (i.e., valuation and modeling transactions), so you should stop with the basics of corporate finance before getting into the weeds.
  • Math/Statistics/Computer Science Background: You don’t need to be an expert, but these skills will be applicable in almost any field. You should understand basic programming concepts (control structures, data structures, recursion, memory, etc.) and math through calculus and linear algebra.
  • One or Two Writing/Communication-Intensive Classes: You spend a lot of time reading and writing documents, calling people, and conducting meetings in finance and also in sales, product management, and real estate.

Finally, if you decide against finance after completing a sequence of internships or an official IB internship, this plan will give you other options:

  • Tech Companies: Product management, sales, data science, or potentially even programming (but you may need a deeper background for the latter two).
  • Finance-Related Areas: Fintech and real estate are always solid options. Maybe even consulting, if you feel like earning less and living in hotels. Then there are Big 4 firms and others in “professional services” that look for similar skills.
  • Non-Finance, Non-Tech Companies: You could also join a normal company in a corporate finance, corporate strategy, or project management role.

You won’t be the ideal candidate to win the most technical jobs with this combination (e.g., working on Google’s search algorithm), and you also won’t be in the best position to win the most sales-y jobs (e.g., enterprise sales at Oracle).

But you will have a lot of flexibility for roles in between those two extremes.

“But Wait! I Want to Study Literature! Or History! Or Gender Studies!”

I hear you.

Even though I was a Computer Science major, I almost picked History or Literature, and I’ve been rereading all of Shakespeare’s plays this year (for fun).

But I don’t think it’s a great idea to pick something in the liberal arts or social sciences if your goal is a high-paying job immediately after graduation, and you don’t want to be “forced” into law school or another degree.

If you’re at an elite university (the Ivy League and similar schools in the U.S.; Oxbridge in the U.K., etc.), you might be able to pull this off because your university’s reputation is far more important than your major.

But if you’re at even a moderately-lesser-known school, whether a “semi-target” or a complete non-target for banks, it’s a bad idea.

Bankers might be able to vouch for an English Literature major from Harvard, but they’d be a lot more skeptical about a similar candidate from Podunk U.

Other Investment Banking Major Mistakes to Avoid

Double and triple majors are bad ideas because they will drag down your GPA and reduce your free time.

Bankers will not be impressed if you earned a 3.1 cumulative GPA and had lower grades because of a triple major – they’d rather hire someone who earned a 3.7 with one major and who also had good internships.

Finally, Economics is not a good choice unless your school offers absolutely nothing else related to Accounting or Finance.

Not only is it questionable to call macroeconomics a “science,” but it has very little to do with the daily work in IB, PE, or tech careers.

Maybe if you are interested in asset management or portfolio management or something broader, Economics could be more applicable…

…but it’s still more useful to know accounting and the financial statements like the back of your hand.

How To Combine Your Major With Activities And Internships

We have a few examples of how to combine your major with activities and internships in the article on how to prepare for investment banking summer internship recruiting.

In short, you need to win finance-related internships early (Year 1 and Year 2) so you can set yourself up for IB and related roles – or rule them out quickly.

You don’t need to commit to a specific major in the beginning; you just need something by the time recruiting for Year 3 internships begins.

Investment Banking Majors: What Next?

Questions about the “best” major never go away, but most advice about this topic is somewhat off.

Banks indeed hire from all majors, and some majors are more relevant to finance than others.

But those points ignore the true importance of your major: allowing you to earn good grades while appearing competent and intelligent and gaining a useful skill set that gives you alternate career options.

But as I said in the beginning, if someone else is paying for your degree, your education is “free,” or you don’t care about practicality, feel free to do what you want.

I hear the Gender Studies department is recruiting.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. How important really is your degree course these days. Seen as all big firms in IB or anywhere else in finance run their own psychometric testing to determine how you think as well as your numerical and analytical skills. That said, what are your thoughts on a hard science degrees, chemistry and physics, to get into the finance sector and IB in particular?

    1. It is still important because psychometric tests can only say so much, and your degree represents what you accomplished over many years. It’s also quite easy to game the tests or practice repeatedly to get high scores. Also, people just tend to assume that a math/science/engineering degree is “harder” than a liberal arts or social sciences one, which can give you an advantage.

      I don’t think a degree like Chemistry or Physics is a great idea for getting into IB because the material isn’t that relevant, and it will be harder to earn a high GPA in those fields. Maybe as a minor, but probably not as a major unless you want to keep open the option of a science career instead.

      1. So do you think that someone with a high GPA (or 2:1 or 1st in the UK) in a science degree is a competitive applicant to the finance sector if they are able to show their interest in finance in other ways?

  2. Hi, I’m a math major, economics minor at a top school. What are some of the best careers for very quantitative and analytical minds? Do you think Quant-Funds are still a good long-term-career? I want to deal with complex issues and i would like to talk to people. Should I pursue an quant research career? What job at a HF/ AM would suit me?

    1. It all depends on what you want to do. Quant funds can be very lucrative, but you will be sitting by yourself doing stats/math/programming all day and you will not have that much team interaction or gain a broad skill set. But I’ve seen people who perform well in those roles make a small fortune over 5-10 years.

      If you want a role where you have more social interaction, you should probably look outside of quant funds and probably also outside HF / AM because even at most fundamental-based hedge funds, you’re still a lone wolf, finding ideas and vetting them on your own (with less math/stats/programming and more due diligence and reading).

      I don’t know of anything that has a lot of math/stats in it and also a high degree of social interaction. You sort of have to pick one or the other. If you’re more interested in meetings, building a network, etc., then roles like IB, PE, or corporate development are better.

      1. Thanks for your response
        I am very curious, analytical and I have good problem solving skills.
        On the one hand I love to investigate Datas like a Detective to get the answer of the question. But on the other hand I would like to talk to smart people. But to be honest, I think, I don’t fit the mold of a “typical banker”. What would you recommend me to do?

        Should I pursue an quant research career or IB/PE? What job outside of Finance would suit me? It’s not necessary that the job has a lot of math in it, but the job should be intellectually stimulating.

        1. I don’t know, I would probably recommend quant research roles or programming at a top quant fund if that’s the case. Outside of finance, roles like data science at tech firms and even normal companies might be appropriate (but be careful because “data science” is a vague term, and roles with that title can be anything from simple regressions to a real ML/AI focus).

  3. I am an international student. I want to be an investment banker and work in the US. My major is finance right now but I’m planning on adding either applied mathematics or Computer science and get a dual degree. Which one do you think is more beneficial. I am in IU kelley

    1. Assuming that both of those qualify as STEM and therefore let you take advantage of the OPT program, either one could work. It just depends on your personal preferences: Applied Math is more useful for quant / data-science type roles, while CS is a bit more general and could be useful in roles like product management and even sales as well.

  4. Out of curiosity, I am currently in undergrad at a non target, I have a high gpa (3.9-4.0). I want to start in IB for 2 and eventually work in either PE/VC or preferably a global macro fund. I’m currently majoring in Economics and Finance. I am minoring in Math. Is the math minor necessary for the route I just explained or should I drop it? Also, as far as the economics major goes, I only added it to Finance because it interests me and it is only 3 added courses to the required curriculum for finance.

    1. I don’t think a Math Minor is necessary for PE/VC, but it could help for hedge funds. If you can maintain your high GPA, keep it because it will give you more options in case you decide against a pure finance role later on.

      If Economics only takes 3 additional courses, sure, keep it. My point here is just that Accounting is far more useful than Economics because it’s a field with clear, well-defined rules and practices that all businesses worldwide use… whereas the “rules” in Economics are much fuzzier.

  5. Hi Brian

    What will be the best postgraduate qualification to break into sell-side M&A for a person with 6 years of work experience coming from Big 4 Audit + Commercial/Corporate Accounting experience ? I’m thinking along the lines of CPA, CFA or MBA, but however i am unable to study all due to time constraints and I only graduated with a double degree in Accounting and Finance with no honours at all. Looking forward to hear your advice if possible. Thank you!

    1. Certifications like the CPA and CFA will not be helpful and are generally not helpful for IB/PE and other roles that involve working on deals. See: https://www.mergersandinquisitions.com/degrees-certifications/

      If you already have 6 years of work experience, you pretty much need to complete a top MBA at this point to get in. See: https://www.mergersandinquisitions.com/how-to-get-into-investment-banking/#Path3

      1. Thanks Brian!

  6. Avatar
    OR Major

    Personal opinion: I think a really great major that is a huge deal in certain schools (like mine) but a little overlooked in general is Industrial Engineering/Operations Research/Financial Engineering etc. It may be a little too in depth for someone who only wants an introduction to CS/Math, but I think it does a great job combining finance, math and cs to prepare someone for almost any finance role. Sure quant research requires a MS/PhD, but I think it’s also a great undergrad to be prepared for a variety of masters or PhD programs for someone interested in that route. At least at my school, you can tailor your program to more intensive finance, math or CS depending on your interest. It’s very heavily recruited for IB and intro jobs at quant shops, but I’ve also seen a lot of people use it to go into management consulting, data science, and traditional big tech firms. Even though it’s not easy, I think the curriculum is extremely practical.

    1. Yup, that is a good one as well. It’s pretty much a combination of the suggestions here. It might potentially be “too difficult,” but if you can customize it, that’s less of an issue.

    2. Second that. What about a combination of some of what you just said and the technical actuarial material?

      1. An actuarial major could work, but I think it might be overkill for the types of roles featured on this site, and I’m not sure how much the technical details of actuarial work apply to, say, quant roles at hedge funds… or even normal programming or engineering roles. But I don’t know much about it, so can’t really say.

        1. An acquaintance of mine once had an interview with a hedge fund, and an interviewer did remark that people with an actuarial background can wind up as good fits for their quant role due to the modelling work they do.
          I also know that a Vietnamese quant used to work as an actuary before becoming a quant.

          1. Interesting, thanks for sharing. I know very little about actuarial work other than the fact that it makes insurance financial modeling very complicated, but yes, I could see that background appealing to quant funds.

        2. I did come across a hedge fund interviewer who remarked that actuarial majors are a good fit for their quant role because of the modelling work involved.

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