Any way you slice the numbers, more people fail in their investment banking career than succeed. It’s competitive enough to make it through the door, but the number of people stagnating at VP level or exiting the industry after a few years as an analyst far exceeds those people enjoying the fruits of their labour at managing director level.
So, how do you survive and thrive? A trio of senior bankers, Diego de Giorgi, co-head of corporate and investment banking at Bank of America Merrill Lynch, Camillo Greco, head of M&A advisory at JPMorgan and Jonathan Rowley, chairman of M&A for EMEA at UBS, gave their tips to a roomful of students at the LSE Investment Banking Conference this week.
You won’t make it through the door if you don’t have good academics, but success in investment banking isn’t just about being the stereotypical ‘smartest guy in the room’.
“What I lack in brains, I make up in energy,” says de Giorgi. “You need to be energetic, enthusiastic, persistent and dogged. Most pitches won’t be successful and you could have spent hours working on a presentation, but so will have the competition. We don’t sell a physical product, we sell what we can do for clients and you need to show intellect, but also doggedness.”
Pitching to clients as an investment banker is largely about selling a similar product to your competitors better than your competitors. That product is advice, and it can take years of developing relationships before a client will actually take you on – you need to understand people.
“A successful investment banker is part salesman and part lawyer – it’s a package of qualities rather than any one key skill,” said Rowley. “If you don’t have that ability to influence people then you have to question whether it’s the right career for you, because in the long term it’s not going to be easy.”
Again, investment bankers should be focusing on long-term relationships, said Greco and this means not taking clients for granted or focusing purely on a single deal.
“Clients like loyalty and consistency – it’s very important,” he says. “You can develop long and complicated relationships before business comes into fruition. It takes years to build trust.”
Yes, you’re competing against anything up to 40 other people for every available position, but lying about your abilities will only land you in hot water. “It’s best not to have mutually incorrect expectations about your abilities. Be honest about what you can and can’t do,” says Rowley.
At the junior end, investment banking can easily hoover up any semblance of life outside of work. 100-hours weeks and sadistic MDs dropping work on your desk at 5pm on a Friday leads to cancelled plans and broken relationships with anyone outside of banking, according to recent studies. However, you need to maintain a support network out of work, said one of the panelists.
Essentially, they suggested, having a life outside of work ensures that you can connect with clients on a human level, something very important during often stressful periods. "If you only want to talk about the next deal, you are never going to build a relationship with the client, they said. "If you don’t have human empathy, you are never going to be a good investment banker, or anything else
There’s no point in only being an expert in your narrow field of expertise. A good investment banker should be able to stay informed across a wide array of topics, says Greco. “You need to keep up with the world of finance, politics and the economy and realise how these events connect to the advisory environment. Stay informed, there’s no excuse not to in the current age of information.”