In theory, investment banks hire front office employees from a variety of disciplines. On-the-job training in the first few weeks is enough to get any aspiring investment banker up to speed on the technical aspects of the job.
In reality, the fact that hundreds of undergraduates apply for every available role means that both experience and an understanding of finance sets you apart from the competition. Using the eFinancialCareers CV database, which includes more than 1.5m resumes globally, we sought to find out which undergraduate university majors are most common among investment banking professionals in North America.
The results are illuminating, if a little predictable – the majority of people on our database majored in either finance, economics or business administration. Accounting came in fourth, with 13.52% of the total, and marketing was at 16.47%, but other degree disciplines are in the minority.
Five majors are heads and shoulders above the field
Around 50% of the investment bankers on our U.S database majored in economics, business administration and management, or finance.
“From what we’ve seen, if you look at these kids that are coming straight out of school, the undergraduate majors that seem to be the ones investment banks put a higher degree of emphasis on would be economics,” said Mitchell Peskin, partner and executive vice president in the financial services recruiting division at The Execu|Search Group.
“Some of the active candidates we’re working with now, economics is the top major I see these firms going with – economics is one with the most focus,” he said. “Past that, mathematics, engineering, finance or an accounting degree are also desirable.”
Accounting is the other most popular major among the U.S.-based investment bankers in our database, but many of those professionals work in the middle office. Marketing was a popular keyword on investment bankers’ resumes but is more likely to be a second major or a minor rather than a primary course of study.
Best of the rest
Mathematics was the fifth most popular major, and political science came in sixth. History came in seventh, followed by engineering and literature. Computer science placed 10th.
While the totals for these majors were minuscule compared to the top three, it is certainly not unheard of for someone with an out-of-left-field subject-matter concentration to have a successful career in investment banking. And while your undergraduate major certainly matters, there are other criteria that are more important in the eyes of banks’ hiring managers.
“There are a number of factors that hiring managers consider when assessing recent graduates’ potential: their intelligence, their drive and their personality traits that would enable them to thrive in finance,” said Michael Karp, the CEO and co-founder of Options Group, a financial services recruitment firm.
“While finance or quantitative degrees help, it’s not the defining criteria,” he said.
It’s now near-essential for any student wishing to enter investment banking to sandwich work experience within their degree. Most of the students securing roles in 2016 interned with the bank they ended up in. The vast majority had at least one internship, but it’s not unheard of for students to cram in nine internships over the three or four years they’re in college.
How does your major fit into the whole package?
Still, there are various other factors that investment banking recruiters and hiring managers consider in addition to undergraduate major.
For example, a candidate with an undergraduate liberal arts degree from an Ivy League school would be a more desirable candidate than a math major from a low-ranked college, according to Karp. On the other hand, a Wharton undergrad with barely passing grades wouldn’t be viewed more favorably than someone from a state university on a full academic scholarship who graduated summa cum laude and played a division I sport, he said.
GPA is critical. If it’s not strong, then a lot of managers doing the hiring for investment banks will drop your resume to the bottom of the pile. The absolute minimum is a 3.3 for students from top-notch schools, while a 3.8 or higher may be required for students with a B.A. or B.Sc. from a less-prestigious university.
“For candidates with either the right background or good credentials, undergraduate majors matter less,” says Karp. “Granted, if a candidate was a music theory or 18th century art major, they would have to make a greater effort to sell employers on why they are interested in finance and how their studies can be applied to the role.”
Photo credit: iStock via Thinkstock