So, What Should You Do at Investment Banking Summer Training Besides Getting Wasted Each Night?
You’ve just been through a warzone to get your offer: 53 interviews, 3 weekend trips to New York, and so much time spent staring at Excel that you’ve developed a monitor tan.
But things worked out, you accepted your offer, and you’re about to start work in 2 weeks.
You just need to make it through the training program first.
But that should be the easiest part of the entire process, right? Right?
Does This Really Matter?
When I first got questions about training programs, I was confused: it seemed like a topic that didn’t warrant much advice.
“It would be about as stimulating as all those suggestions over the years to create a recommended reading list,” I thought.
But then I sat down to think about it in more detail and started asking around, and realized that there might be some important and not-so-obvious points to make.
Why Training Programs?
They’re a combination of marketing and education: banks pride themselves on offering “the best investment banking training” – even though banks use the same companies to train you – and they want to get people from non-finance backgrounds up to speed quickly.
Beyond just teaching you about accounting, valuation, and finance, lots of banks bring in speakers from different groups and use them to introduce you to their culture and how things work.
For some inexplicable reason, a few banks really like to tout their training programs and use them as a selling point when interviewing candidates, which might just be the strangest recruiting tactic ever.
No one joins Goldman Sachs because their training program is so great – they join because of the name “Goldman Sachs.” Their training program could disappear tomorrow and it wouldn’t matter.
The “education” from these programs is most helpful if you’re not from a finance background.
You will indeed have a tough time at first if you know little about accounting, valuation, and finance – but then it would also be difficult to get an offer these days without knowing those topics to begin with.
Even if you are completely new to finance, training programs are still not that helpful because different groups have different standards and it can be hard to focus when everyone is talking to each other and chatting online.
So don’t stress too much over all the content – there are more pressing concerns during training, beyond just getting enough bottles every night.
What is a “Training Program”?
Right before you start working, the bank will fly you and all the other incoming analysts and associates to New York or London (or wherever your bank is based) and spend 1-2 months “training” you.
Translation: You get to spend each weekday in a crowded room learning all about Excel, accounting, valuation, and finance from outside training firms and occasionally internal speakers from the bank.
You follow along on your screen as they instruct you, and you keep Facebook and Gmail open so you can chat with everyone else about how bored you are and how the instructor has a receding hairline.
You may also get tests and case studies to complete, and group exercises similar to what you find at assessment centers. And then there are those fun standardized tests you have to pass – the Series 7 and 63 back in the day, and the Series 79 in recent times.
You’re not working banking hours during this time – weekends are mostly free and you rarely stay late at night, which is the first and last time that will happen as long as you work in the industry.
If you’re going into an internship rather than a full-time job, you’ll get just a week-long crash-course rather than the 1-2 months that full-timers get.
Many boutique banks don’t offer training programs at all because it’s beyond their budget – you’re also not likely to go through training at private equity firms or hedge funds, because they’re small and they expect you to know everything you need once you start working.
If you’re going into sales & trading or another non-IB area at a bank, you’ll probably have some type of training as well but the material will be different and it might be shorter.
As you’ve probably guessed by now, the 2 most important words in everything I’ve written above are “crowded room.”
If you’re not meeting other people and networking during training, you’re wasting your time.
So How Do You Approach Training?
Ask most bankers about what to do during your training program, and you’ll get 1 of 2 responses:
- “Just get drunk every night! Party! It’s the best part of the analyst/associate program.”
- “Study hard and take all the homework assignments and case studies seriously! Oh, and if you don’t pass those exams, you’re screwed.” (This one usually comes from students who aren’t even in the industry yet)
Neither one of these is quite right.
On #1, yes, you should go out and have fun since this will be one of your last chances to do so in the next few years.
But you need to be strategic about how you do it and also make sure you meet the right people in the process.
On #2, despite rumors to the contrary, most of the work they give you does not matter that much. Just do reasonably well and pass what you need to pass – it’s almost irrelevant next to your deal experience in your first year.
But I Heard This Person Got Kicked Out for Slacking Off!!!
Most of these rumors are greatly exaggerated. Yes, if you do something incredibly stupid – kidnap the Managing Director’s son, start drinking at work, etc. – you might be removed from training, but that hardly ever happens.
If you already have your group placement, homework assignments and tests during training aren’t important – the senior bankers at your office don’t have time to read the details of what you did and then change your group based on that.
If you’re really concerned about not knowing enough or being disadvantaged next to everyone else there, learn some material before training starts.
If you’re reading this site you’re probably a Type-A overachiever anyway, so you’ve already signed up for modeling courses before you even got interviews.
Just dust those off and start going through all the material and you can doze off during training and still do well.
What About the Series 7, 63, and 79 Exams?
These are actually important to pass because some banks won’t let you start working for real until you’ve cleared the exams.
They’re horribly boring and you’ll forget everything you learned in about 2 days, but you need to pass them anyway.
I’m never going to produce a course on these because they’re too boring even for me – but I’ve heard that the Knopman materials are good.
Do not underestimate these exams because they are more difficult than you initially think.
There’s a lot of rote memorization (certain questions will give you choices of 5 days, 10 days, 15 days, or 20 days and you just have to know which one is correct), and it’s hard to cram and learn everything in a few days.
So yeah, make sure you pass these – but don’t spend every waking moment studying at the expense of networking.
OK, So Then What About Networking – What Do You Mean by “Make Sure You Meet the Right People”?
Going out and getting bottles every night is almost a good idea, but there are a few problems:
- You won’t have much money yet since you just started and may not even get a paycheck until training ends.
- It’s more helpful to know people in different offices and different groups instead of always hanging out with the same crowd.
If you don’t know anyone there, you’d be screwed – yes, you could just email the entire office and ask for someone to help you, but everyone is busy with their own fire drills and deadlines so they may ignore you.
But if someone sees your name and recognizes you from training, you’re in much better shape and you might actually get the answer you need.
It’s almost impossible to get to know people from every group and every office, so focus on 5-10 analysts/associates.
Get some geographic diversity (if you’re in the US, know people in a few different cities and also a few in Europe and Asia) and industry diversity (if you’re in an M&A group, get to know people in industry groups and also ECM and DCM).
Doing this is not difficult and I would feel silly writing a “guide.”
Each day there are plenty of breaks, and most banks throw lots of events and parties during training – take advantage of these and go up to meet new people there.
Just think of it as a big information session, only without seasoned bankers. And it’s even easier than information sessions because you have an enforced time limit and everyone else is new and wants to meet others.
Does It Really Help?
The main problem is the high turnover rate in finance – by the end of your first year, at least 50% of your incoming analysts/associates will be gone.
So it won’t help you forever, but it doesn’t matter too much because your first year is the most critical anyway – do well at first and you’ll get better work and better exit opportunities, and do poorly at first and you’ll get the MDs laughing at you and bottom-tier bonus.
During training, I made the mistake of constantly going out with the same group of people and not getting to know others.
Things still turned out OK (see: this site), but there were quite a few times when it would have been helpful to know people in different groups.
It’s not a question of life-or-death, but it will save you some headaches and possibly let you get 6 hours of sleep rather than 4 hours – at least on some nights.
So do what you need to pass everything and learn the material, but don’t take any of it too seriously at the expense of meeting other people.
If you’re concerned about not knowing enough when you start working, start preparing beforehand and learn as much as possible from classes or training programs.
And make sure you find out about your office and who makes decisions there before you start working as well.
Get to know 5-10 people well so you have contacts in other groups and other geographies when you need something and no one else in your office can help.
It’s tempting to befriend only the incoming bankers in your own office or your own group, but that defeats the purpose of training: you want to spread your net wide and meet people from all over.
And if you’re already doing all this and you know accounting, valuation, and finance like the back of your hand, have some fun and try to show up for training every day without passing out on your desk – they might actually notice that, especially if you’re in the front row.
Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews
Investment Banking Recruiting in Europe: London vs. Frankfurt vs. Milan
Will you really have to go through assessment centers and similar interviews in each place?
Are they only looking for locals or can you break in as a foreigner? What about language requirements and that all-important summer internship to full-time offer conversion rate?
Today a reader who has recruited across Europe – and won 2 internship offers – will share his experiences and answer all those questions, plus a whole lot more.
Q: Can you walk us through your background and how you first got interested in finance?
A: Sure. I was born and raised in Italy, and after high school I studied business administration and completed a BSc in Finance from a non-target Italian university.
During my 3rd year there, I took a few classes in corporate banking and first learned about investment banking, M&A, PE, and VC.
The professor was great and we had several financiers as guest speakers – I was most interested in private equity and how they look for small and mid-sized enterprises (SMEs) to invest in. There are so many SMEs here that I knew there would be a lot of opportunity if I could break into PE.
Q: So you tried to get into PE coming from a non-target university with no full-time experience?
A: No, not yet. I looked for information online and spoke with the guest speakers in our class and learned that most people in PE had MBAs, that you had to know accounting very well, and that you had to do investment banking, consulting, or auditing first to break in.
I knew I needed better access to recruiters and more accounting knowledge, so I looked for a 2-year MSc program in Accounting and applied to the only “target” university in Italy.
I moved to Milan to complete the MSc program and then found out about summer internships in investment banking – but my chances weren’t good since I was from a non-target university, hadn’t studied abroad, had no relevant work experience, and didn’t speak a 3rd language.
But I applied to all the banks anyway and ended up getting several interviews and assessment centers, and then won a back office internship in London – which I accepted, since I had no better options. I also figured that having a bulge bracket name on my CV would at least help me with recruiting in the future.
After finishing that internship, I applied to both full-time jobs and internships (internships work a bit differently here) in investment banking in the UK and continental Europe, and went through recruiting in London, Milan, and Frankfurt, finally winning 2 internship offers.
M&I Note: The audit to PE path is more common in Europe. It does happen in the US and other regions as well, but your chances are not as good unless you’ve done something like audit to Big 4 TAS first.
M&I Note 2: While I’ve been critical of the back office in the past, it’s not the end of the world if you accept a back office internship. It’s more difficult to move from the back office to the front office if you’ve already accepted a full-time offer.
Q: That’s quite a story – you must have had a great strategy for winning those offers, or at least something that made you stand out.
A: In high school I wanted to play football full-time at first, and I had also worked as a sports journalist for a local newspaper before.
That wasn’t prestigious, but it did give me something to talk about in interviews for my “interesting fact” – and I could reference that when they asked about leadership, managing stressful situations, and so on.
This story helped me get my first back office internship – I think the 2 IB internship offers were more about solid technical preparation, since I had focused on my corporate finance studies over the past year.
Q: That’s a good one – much better than those interviewees who tell you that their “hobbies” are learning Excel or doing statistical analysis.
So what was the recruiting process in these different cities like?
A: I always started by applying to London first – usually applications from continental Europe are checked by local offices first, even if you apply to London. Sometimes they’ll even call you and say, “There are no spots left in London – are you interested in Milan?”
Then, if you pass the initial CV / cover letter / competency question screen, you’ll get a first round in the local office (Milan in this case) and then the 2nd round in London, or maybe a phone interview and then the AC in London.
With one bank I did the 1st and 2nd rounds in London and was then sent to Milan for the 3rd round since they ran out of spots in London, but that was the exception and not the rule.
My overall experience looked like this:
- Bank A: Applied for the graduate program in London, did a phone interview, and then an assessment center in London (group work, then 3 interviews with 4 VPs).
- Bank B: Applied for the graduate program in London, did a 1st round interview there with 2 associates, and then also did the AC in London (business case and presentation to Director, then another 2 interviews with 2 other Directors). But then I was sent to Milan for 3 interviews with the local Directors there and also had to complete an Excel test as well.
- Bank C: Applied for summer internship in London and was then called and asked if I was interested in Milan – I did the 1st round in Milan with 1 analyst and 1 associate and then the 2nd round in Milan with 2 associates.
- Bank D: Applied for a 3-month internship in Frankfurt via email – they responded shortly after that, and I then completed 3 interviews in Frankfurt on the same day (with 2 associates and 1 analyst).
Q: Awesome, thanks for sharing that information – I’m sure everyone’s recruiting experience is different but it’s good to have data on what to expect in different places.
So it sounds like you didn’t do much networking to get any of these interviews?
A: That’s correct – I did not do much networking. I already knew one of the VPs that interviewed me at Bank A because I met him during my previous summer internship, so I spoke with him in advance and asked about recruiting, how to best position myself, and so on.
But then another guy won the offer from Bank A, so it wasn’t too effective for me.
Q: What about CV differences? Is there anything that banks in Milan and Frankfurt care about but which offices in London do not?
A: The overall structure of CVs is not that much different, but in local offices they tend to care more about your grades.
In Milan and Frankfurt they asked me specifically for my GPA, while in London HR just scanned it quickly when screening CVs.
Another difference is that for full-time recruiting, they pretty much expect you to have had a previous internship in investment banking – whereas for internships you can get in just by having strong technical knowledge and some kind of previous experience even if it isn’t directly related.
All the candidates that received full-time offers in my final round interviews were former summer interns who had worked in IB at other banks.
Q: Right, so standards tend to be higher for full-time interviews and it’s tougher to break in if you haven’t had that IB internship before.
What about the type of people who recruit in each place? How is that different, and what are the language requirements in those cities?
A: Overall there’s the least amount of diversity in Milan because you must be fluent in Italian. So it’s mostly Italian students who end up there – either voluntarily or because they didn’t get into the London office.
Most of these students are coming from schools such as Bocconi University, LUISS, Politecnico, or ESCP.
In Frankfurt, they didn’t care about language abilities for internships. I don’t speak German but still won the offer there – but for full-time positions it’s different and I was told that you must be fluent in German to do investment banking there.
In London you see the most diversity – people from all countries throughout Europe, Asia, and North/South America.
Obviously there’s no language requirement there except for English, but language skills are still viewed very highly and you’d be at a disadvantage if you don’t speak other European languages.
Q: What about differences with interviews? Did you find a different ratio of “fit” to technical questions, or were the questions themselves any different?
A: Overall, I had the most technical interviews in Frankfurt. They asked pretty much everything you could ask: standard questions about EPS, accretion/dilution, synergies, the control premium, the liquidity discount, what happens post-merger, how to value startup and bio-tech firms, how to adjust for pension plans, leasing and IAS 17, stock options, derivatives, and more.
They asked me to explain how a PE firm works, what the average debt-to-equity ratio in LBOs was, how to value a company, and then how to write down and change all the main items of a P&L, balance sheet, and cash flow statement.
In Milan they also asked a fair amount of technical questions (Beta, WACC, DCF, multiples, etc.) but they didn’t go nearly as in-depth as they did in Frankfurt. They also asked a lot of questions about consolidated statements – what the financial statements for a parent company plus its subsidiaries look like and how to combine them.
In London, the technical questions were the easiest – everything was pretty standard and consisted of questions you can find in most interview guides. They focused more on your background and how well you fit in with the rest of the team there.
Q: Interesting – I’m sure we’ll get a lot of comments from readers there who experienced slightly different (or maybe significantly different?) interviews.
Earlier you mentioned that you won several internship offers even though you’re set to graduate shortly and you said that internships in Italy are “a bit different.” How does that work exactly?
A: In Italy we don’t have structured summer internships like you see in other countries.
You might find them at a bulge bracket bank with local offices in Italy, but local banks here don’t have such programs.
So 6 months before you graduate, when you’re writing your thesis and exams are over, you can apply for off-cycle internships. If you’re good enough to get in and do well there, they’ll just ask you to keep working after the internship, effectively turning it into a full-time offer.
That’s much different from London, where you usually do the internship just before your final year and then you start full-time one year later.
I don’t know what the exact “conversion rate” is in these 2 places, but your chances might actually be higher in Milan since pretty much all full-time bankers at local banks started out by completing post-graduation internships first.
Another difference here is that some banks only want students who have already graduated when they search for interns – and the internships themselves last 6 months rather than 10-12 weeks.
Since banks don’t have structured programs, they just post job openings on their website or on the business school careers page and you submit your CV and cover letter without completing competency questions or numerical tests or anything like that.
You also see that for some international boutiques with offices in Milan, but it’s more common at local banks.
Q: You mentioned before that you applied to both full-time jobs and internships but ended up with the 2 internship offers – do you think it’s harder to get full-time offers in Europe?
A: I think in general it’s more difficult to get full-time offers because people with previous IB internships have a huge advantage, so Europe is no different in that respect.
Q: I see; it’s definitely getting more competitive every year. 10 years ago the people applying to banks for full-time roles had far less internship experience.
So what’s next for you? When do your internships start?
A: Originally I was planning to complete one of my internships over the summer and then start the next one in September, before graduating in December or May.
Recently, though, some personal problems arose and because of those I couldn’t join one of the banks in the summer – so I’m going to focus on my thesis for now.
That would at least give me the option to move back into academia if I decide that I don’t want to do investment banking or can’t stand the hours.
Q: Great. Thanks for sharing your story – I learned a lot!
A: No problem, hope you enjoyed it.
For Even More Practice…
For even more practice with numerical, verbal and logical aptitude tests and assessment centers in general, check out Job Test Prep and all their test prep offerings.
They have our highest recommendation for online tests and assessment center prep – and their courses are the single best way around to prepare for EMEA recruiting.
Free Exclusive Report: 57-page guide with the action plan you need to break into investment banking - how to tell your story, network, craft a winning resume, and dominate your interviews
You Didn’t Get Any Investment Banking Summer Internship Offers. Now What Do You Do?
Summer internship recruiting is over.
Bankers have come to your campus, conducted interviews, finished recruiting, and now they’re back to their pitch books.
But you don’t have any offers.
No Summer Offers vs. No Full-Time Offers
There are 3 main differences:
- Timing: You have more time to find your Plan B with full-time recruiting – sometimes a year vs. only a few months with summer internships.
- Options: You have more options if you come out of full-time recruiting empty-handed: delaying graduation, going for a Master’s program, moving to Thailand…
- Seriousness: While the lack of a good junior year internship will hurt you, it’s less of an emergency than having no post-graduation plans.
You find no real internship, so you become a life guard or work in retail for the summer.
So it’s not that bad.
But it also won’t put you in a good position for future internships, or for full-time recruiting.
Fortunately, it’s pretty easy to avoid this scenario – even if it’s the last-minute and you don’t appear to have options.
What Went Wrong… Does It Matter?
If you didn’t get a full-time offer, you need to look at what went wrong to plan your next steps: Was it your resume? Your (lack of) networking? Your interview skills?
You can still do this if you’re applying for summer internships… but it’s not as helpful.
A few problems can prevent you from getting summer internships:
- Your GPA, especially at more competitive schools.
- Lack of networking or lack of networking-in-advance.
- Interview skills / resume or too much preparation.
The first 2 are difficult to “fix” on 2-3 months’ notice.
And even if you can “fix” these 2 problems – or even #3 – you can’t get a second chance to prove yourself.
So don’t fall into the trap of analysis paralysis.
What NOT To Do
We’ll start with what not to do, because that’s easier to define.
I’ve run across some people who just expect an internship to fall into their laps even if the magic 8-ball points to “no.”
While miracles are possible, don’t hold your breath: the harder you work the more your “luck” will improve.
Study for the CFA / Get Other Certifications
You probably already know my views on the CFA, but just in case…
While studying is a better use of time than doing nothing, that’s like saying that death via the electric chair is better than drowning: you’re dead either way, but one is slightly less terrifying.
The problem with studying or getting certifications over the summer is that you can’t write anything on your resume under “Work Experience” to describe what you did – so you’ll have a big gap on there.
All you’ll get is another 1-2 lines at the bottom of your resume: not a great reward for 500 hours of study time.
If you’re really set on doing these over the summer, you could still do them – but only if you treat them as a side project and you spend the bulk of your time on something that you can actually list as “Work Experience.”
If you’re in your 1st or 2nd year in university, the back office isn’t as terrible as some would have you believe – if you can get a middle or back-office role at a well-known bank, that’s much better than a summer spent at Best Buy.
This one gets less attractive if you’re looking for junior year internships, because a back office internship won’t turn heads if you’re trying to move to front-office banking in full-time recruiting.
Filling the Gap: Possible Solutions
So how do you fill the gap, find something worthwhile to do over the summer, and make sure you don’t have a gaping void on your resume?
Delaying Graduation… Again
This is certainly one option – and if you have your heart set on a bulge bracket investment banking summer internship you might want to give it another shot.
But it doesn’t solve our original problem here – what you should do this summer.
So don’t make any decisions until you have summer plans in place – and keep pursuing Plan B options on the side.
If nothing works out, delaying graduation may actually hurt you because banks will say, “So, what did you do last summer? How have you improved since we saw you last time?”
Options Within Finance
If investment banking doesn’t work out, your next best option is something else in finance – sales & trading, prop trading, wealth management, public finance, or corporate finance – to give a few examples.
The only issue here is that many of these also finish summer recruiting the same time that investment banking groups do – so if you didn’t get into investment banking at Morgan Stanley and it’s March, your chances of getting an S&T summer internship there aren’t much better.
The further away you move from large investment banks, the easier it gets to find something else in finance at the last-minute: I’ve been conducting dozens of interviews with readers, and many of them pulled this off against all odds.
How do you find these options?
Outside of Finance
These options are a notch below the finance ones, but they still beat studying for the CFA or working at Best Buy by a long shot.
In this category, you might think about marketing, sales, or accounting-type roles at “normal” companies, Big 4 firms, or anything else that’s out there.
I’m not going to “rank” any of these because it’s impossible to quantify and because “ranking” is one of my least favorite topics (just after the CFA and GPA rounding).
So if you do accounting at a Big 4 firm, working with financial services companies or helping out with due diligence on transactions is better than auditing Wal-Mart’s 10-K.
At F500 companies it’s still hard to get something at the last-minute, but overall competition is far less than in investment banking.
Keep At It But Adjust Your Focus
You should be doing this no matter what option you decide to pursue – it’s still worth spending at least a few hours per week cold-calling banks and emailing alumni just to see if anything turns up.
If it’s May and you still have nothing, you shouldn’t decide to suddenly spend 80 hours per week cold-calling – at that stage, no amount of effort will produce miracles.
But if you still have a few months left, continuing to network is always worth it.
Go Off the Beaten Path
This is a great idea if you have some time before you start your full-time investment banking job, but it’s not so great if you’re looking for a solid internship.
Banks are biased toward anyone with previous corporate finance experience – so if you’ve done something that looks completely unrelated they’ll be suspicious of you.
If you really want to start your own surf shop or you want to spend the summer climbing mountains, go ahead – but be aware that it’s not much better than the “doing nothing” option in the eyes of investment banks.
This is stupid and unfair because you often do more work and get more responsibility with these options, but that’s just how banks work.
The one exception here: if you can spin this experience into sounding relevant to finance, it may be a good idea. Certain fellowships, study abroad programs, and research opportunities may qualify.
Brand Name vs. Quality Experience
One issue that comes up with all these options is the the brand name of a firm vs. your experience.
Some people think it’s all about brand name, while others say it’s more about the experience you get.
If you’re interested in investment banking (or private equity, or hedge funds…) then you should think about it like this:
For summer internships, brand name within the same role matters more than your exact experience.
So a front-office internship at a boutique will still beat a back-office internship at Goldman Sachs.
But a front-office internship at Goldman would beat a front-office internship at a boutique, even if you work on a dozen deals at the boutique and learn advanced modeling and all you do at GS is fetch coffee for people.
It’s just the way things work: bankers scan resumes very quickly and have a strong bias for brand names and anything that reads “Investment Banking Analyst.”
So, what’s your plan of attack?
First, figure out how much time you have left before internships begin and what the lowest-hanging fruit is: Have you already done a lot of networking in one industry? Do you have good contacts at one firm, or are there a lot of alumni in one field of finance?
Then, start reaching out to your contacts in other fields while you continue to spend at least a few hours per week calling and emailing bankers. You can up this if you have a few months left.
If you’re not getting good results, keep broadening your search to consider anything that’s even tangentially related to finance.
And if nothing works out, find something else cool to do and spin it into sounding relevant to finance.
Or you could just work at Best Buy.
(Kidding, don’t do that).