When it comes to breaking into the competitive world of investment banking, one of the most pressing questions on aspiring professionals’ minds is: “What major do I need to get hired?” While there’s no one-size-fits-all answer, understanding the most common majors held by investment bankers can give you a significant edge in the job market.
The Most Common Majors Among Investment Bankers
Investment banks typically attract top talent from a diverse range of academic backgrounds. However, some majors are more prevalent than others. Here are the most common ones:
Economics
Economics is a clear favorite among investment bankers. This major provides a solid foundation in microeconomics, macroeconomics, and econometrics, which are essential skills for analyzing market trends and making informed investment decisions. According to a survey by eFinancialCareers, 34% of investment bankers hold an economics degree.
Economics majors learn to think critically, analyze data, and understand the intricacies of economic systems. These skills are highly valued in investment banking, where professionals must navigate complex financial models, forecast market trends, and provide strategic advice to clients.
Finance
It’s no surprise that finance majors are also well-represented in the investment banking industry. A finance degree provides a deep understanding of financial concepts, instruments, and markets, which is essential for success in investment banking. Finance majors account for around 25% of investment bankers, according to the same eFinancialCareers survey.
Finance majors learn about corporate finance, investments, financial management, and financial markets, which prepares them well for roles in investment banking. They develop skills in financial modeling, data analysis, and financial planning, making them a natural fit for the industry.
Business Administration
Business administration majors, particularly those with a concentration in finance or accounting, are also common among investment bankers. This major provides a broad understanding of business principles, including finance, marketing, and management. About 15% of investment bankers hold a business administration degree.
Business administration majors develop strong analytical, communication, and problem-solving skills, which are valuable in investment banking. They learn to think strategically, manage teams, and make informed business decisions, making them a good fit for the industry.
Computer Science and Engineering
In recent years, investment banks have increasingly sought out talent from computer science and engineering backgrounds. This is due to the growing importance of technology in finance and the need for professionals who can develop and implement complex financial models, trading algorithms, and data analytics tools. About 10% of investment bankers hold a computer science or engineering degree.
Computer science and engineering majors bring a unique set of skills to investment banking, including programming languages, data structures, and software development. They are well-equipped to work with large datasets, develop predictive models, and create innovative financial solutions.
Other Relevant Majors
While the above majors are the most common among investment bankers, other degrees can also be relevant to the industry. These include:
- Accounting: Accounting majors develop strong skills in financial reporting, auditing, and taxation, which are valuable in investment banking.
- Mathematics: Mathematics majors bring a strong analytical mindset and skills in statistical modeling, which are useful in investment banking.
What Matters More Than the Major
While a specific major can provide a strong foundation for a career in investment banking, it’s not the only factor that determines success. Here are some key skills and qualities that investment banks look for in candidates:
Strong Analytical Skills
Investment bankers must be able to analyze complex financial data, identify patterns, and make informed decisions. Strong analytical skills are essential for success in the industry.
Excellent Communication Skills
Investment bankers work with clients, colleagues, and other stakeholders, so effective communication is critical. They must be able to articulate complex financial concepts clearly and persuasively.
Strong Work Ethic and Attention to Detail
Investment banking is a demanding industry that requires long hours, careful attention to detail, and a strong work ethic. Candidates who are organized, efficient, and able to work well under pressure are highly valued.
Commercial Awareness and Business Acumen
Investment bankers must have a deep understanding of the commercial world, including market trends, regulatory environments, and industry developments. They must be able to think strategically and make informed business decisions.
Breaking into Investment Banking Without a “Traditional” Major
While certain majors may be more prevalent in investment banking, it’s by no means a guarantee of success. Candidates from non-traditional backgrounds can still break into the industry with the right skills, experience, and attitude.
Here are a few examples of individuals who have succeeded in investment banking without a traditional major:
| Example | Major | Investment Banking Role |
|---|---|---|
| Mary | Physics | Quantitative Analyst at Goldman Sachs |
| David | History | Investment Banking Analyst at Morgan Stanley |
In both cases, the individuals developed strong analytical skills, gained relevant experience through internships, and demonstrated a passion for the industry.
Conclusion
While certain majors may be more common among investment bankers, it’s not the only factor that determines success. By developing strong analytical skills, excellent communication skills, and a commercial awareness, candidates from any academic background can break into the industry.
Remember, investment banking is a highly competitive field that requires dedication, hard work, and a willingness to learn. Focus on building a strong foundation in finance, developing relevant skills, and gaining practical experience. With persistence and determination, you can succeed in this exciting and rewarding industry.
What is the most popular major for investment bankers?
The most popular major for investment bankers is economics. This is because economics provides a strong foundation in quantitative skills, financial modeling, and data analysis, which are essential skills for investment bankers. Additionally, economics majors learn about microeconomics, macroeconomics, and econometrics, which helps them understand the complexities of financial markets and make informed investment decisions.
Most investment banks recruit economics majors because they possess a deep understanding of financial concepts and are able to analyze data to make informed decisions. Furthermore, economics majors are often familiar with financial modeling software and are able to create complex financial models, which is a critical skill for investment bankers.
Do investment banks only hire economics majors?
No, investment banks do not only hire economics majors. While economics is a popular major among investment bankers, many other majors can also be successful in investment banking. In fact, many investment banks actively recruit students from a variety of academic backgrounds, including finance, business, engineering, and computer science.
Investment banks value diverse skill sets and perspectives, and students from different majors can bring unique strengths to the role. For example, finance majors may have a strong understanding of financial instruments and markets, while engineering majors may possess excellent analytical and problem-solving skills. Ultimately, investment banks are looking for talented and motivated individuals with a strong work ethic and a passion for finance, regardless of their major.
Can I become an investment banker with a non-quantitative major?
Yes, it is possible to become an investment banker with a non-quantitative major. While quantitative skills are important for investment bankers, they are not the only requirement. Investment banks also value strong communication, presentation, and interpersonal skills, which can be developed through majors such as liberal arts, humanities, or social sciences.
In order to be competitive, non-quantitative majors should focus on developing their analytical and problem-solving skills through coursework, internships, or other extracurricular activities. Additionally, they should be prepared to demonstrate their understanding of financial concepts and their ability to learn complex financial models and software. With hard work and determination, non-quantitative majors can be successful in investment banking.
What skills do investment banks look for in a candidate?
Investment banks look for a combination of skills in a candidate, including strong analytical and problem-solving skills, excellent communication and presentation skills, and the ability to work well under pressure and meet deadlines. They also value teamwork, adaptability, and a strong work ethic.
In terms of technical skills, investment banks typically require proficiency in financial modeling software such as Excel, as well as knowledge of financial concepts and instruments. They may also prefer candidates with programming skills, such as Python or R, and experience with data analysis and visualization tools. Ultimately, investment banks are looking for candidates who are smart, motivated, and able to learn quickly and adapt to new situations.
Can I become an investment banker with a degree from a non-target school?
Yes, it is possible to become an investment banker with a degree from a non-target school. While many investment banks recruit heavily from top-tier universities, they also recognize that talent can come from a wide range of academic backgrounds.
To be competitive, students from non-target schools should focus on building strong relationships with alumni, networking, and gaining relevant internship or work experience. They should also be prepared to demonstrate their skills and knowledge through rigorous interviews and assessments. With persistence and hard work, students from non-target schools can break into investment banking.
What is the typical career path for an investment banker?
The typical career path for an investment banker begins with an analyst position, which can last for two to three years. After completing the analyst program, investment bankers are typically promoted to associate, and then to vice president or director.
As investment bankers gain experience and seniority, they may specialize in a particular industry or product group, such as M&A, equity capital markets, or leveraged finance. They may also move into leadership roles, such as managing director or partner, where they are responsible for generating revenue, managing client relationships, and leading teams of bankers.
Is an MBA required to be a successful investment banker?
No, an MBA is not required to be a successful investment banker. While many investment bankers hold an MBA, it is not a necessary requirement for success in the field.
In fact, many investment banks offer internal training programs and opportunities for professional development, which can be just as valuable as an MBA. Additionally, experience and skills gained through on-the-job training can be more important than formal education. That being said, an MBA can be beneficial for investment bankers who want to transition into leadership roles or start their own businesses.