10 myths about investment banking and why they're not true

Michael O’Dwyer is managing director and head of Morgan Stanley’s EMEA natural resources group in the firm’s investment banking division. Here he tells the truth about getting into investment banking and building a successful career in the industry.

Myth 1: You need a maths or economics degree

When it comes to hiring recent graduates, there’s almost no subject or discipline we won’t consider. Many of the roles in investment banking require strong numerical and quantitative analysis skills, but the fact that someone hasn’t graduated in a quantitative discipline is by no means a deal-breaker.

We want intelligent people working here, but as long as a candidate meets our basic educational criteria we don’t care what degree they have. It’s more about seeing what they’re capable of, which is what the interview process is for.

I came from an engineering background, but it was my previous experience in the oil and gas sector that lead to me getting my first role in investment banking, not my degree certificate.” 

Myth 2: Only Oxbridge graduates need apply

We only have time to visit a few university campuses during the recruitment season, so these tend to be the ones with the best academic reputations.

But we’re by no means limited to just looking at people from these schools and there’s no way we’d pass up an outstanding candidate just because they didn’t go to a top university.

We give all applicants the same amount of initial consideration. If your academics and professional experience meet our criteria, you’ll have every chance of getting through to the interview stage.  

Myth 3: Investment banking is completely male-dominated

I don’t think there’s currently any industry with a greater focus on ensuring an increase in diversity! It’s true that the industry has historically been quite male-dominated, and the media likes to play up this “alpha male” image of banking with characters like Gordon Gekko and Jordan Belfort from the The Wolf of Wall Street. But things have changed dramatically over the past 20 years and there's a huge push across the industry to focus on recruiting, retaining and developing more women to ensure continued and increased innovation and diversity of thought.

At Morgan Stanley we’re running a number of activities and innovative initiatives both for university graduates and experienced-hire candidates to let them know that we’re an attractive employer for women. We're actively encouraging more women to apply to the firm and we continue to strive to improve the balance in numbers between male and female employees.

We assess individuals on their merits and want the best people working here, irrespective of their gender, ethnicity, national origin, sexual orientation or any other characteristic.”

Myth 4: Investment banking is all about trading

There's a misconception within some sections of the media that the “trading floor” environment is what the whole of the banking industry is like. In reality, the role of many people working in investment banking bears little resemblance to trading.

The role of an analyst working in mergers and acquisitions (M&A), for example, is actually not all that far removed from that of a junior management consultant. It requires the gathering and analysis of different data sets and information, which is then used in advising a client on how best to proceed with a particular deal or transaction.

While a strong understanding of finance and capital markets is required, there's much more to working here than that. We’re assembling views and making qualified judgements, often over a long stretch of time. 

Myth 5: The hours are horrifically long

People here work hard. However, it’s important to stress that the majority of employees do so because they want to – they’re motivated by what they’re working on and want to show they can do a good job.

I remember my first day as a junior investment banker: I looked at my watch and I couldn’t believe it was already 10pm. There was so much I wanted to do and achieve that going home was the last thing on my mind. I believe this is very much the mindset of the people in our profession.

As one of our more senior employees at the firm, I don’t want our juniors “burning out”. We encourage them to spend as little time in the office after hours as possible, and there’s a real effort among the managing directors, executive directors and vice presidents to respect people’s time and to ensure a balanced workload. Some of it is also down to time management; if you’re efficient and don’t waste time in the office it makes it easier to leave at a reasonable hour.

Myth 6: Forget about having a life outside work

You can be an investment banker and still have a great social life – no question. Admittedly, working in an investment bank can make it harder to do the things you enjoy outside of work than in a 9am-5pm job; if you want to go to the gym after work or meet up with friends or family you may need to actively schedule your workload to allow you to do so.

But I want my colleagues to be able to do the things they enjoy and are good at. If we have a great tennis player or musician in our ranks, for instance, we try to make sure they’re not letting their talent go to waste.

To label investment banking as “all work and no play” is inaccurate: people still manage to have a good time.”

Myth 7: Expect to be constantly stressed

Working in an investment bank is often about your ability to multitask and juggle lots of different things at once. You rarely find yourself just working on a single activity or project. This can be stressful, of course, but it can also be extremely rewarding.

Also, it’s a client-driven industry and that can sometimes mean tight deadlines and other pressures that are outside of your control. But you can manage these effectively by being disciplined and productive with your time.

Investment banking can be a great way of challenging and pushing yourself. If you’re attracted to the kind of environment where you’re constantly learning and you’re never bored, then you’ll certainly enjoy it here. 

Myth 8: You’re in competition with your colleagues and won't make any real friends

The review system here is a 360-degree process, which means evaluations are based on the feedback individuals receive from their peers. So if someone isn’t a team player and not willing to help out their colleagues, it will quickly come back to us and is likely to put a black mark against their name.

The bond between team members here is incredibly strong; you’re all facing similar pressures as a team, and want to succeed together and achieve the best possible results for everyone.

Seventeen years on, the colleagues I had when I first started out in banking are still some of my best friends. 

Myth 9: It’s very hierarchical – you can't approach a senior person

In my experience, investment banking is one of the least hierarchical professions out there. I think I speak for all senior people at Morgan Stanley when I say that we actively welcome input and participation from our junior colleagues. Most days I’ll have analysts and associates passing by my office to ask me questions and I’ll always make time to speak to them.

The way we work at Morgan Stanley involves setting up project teams to work on each deal as it comes in. I’m normally working directly alongside a vice president, an associate, and one or more analysts. So to do my job effectively I have to listen to the people in my team and understand their side of things. I can’t afford to be aloof and unapproachable, not that I’d want to be.

I sometimes even think that junior employees here aren’t quite as vocal and outspoken as I’d like. Just because you’re new at Morgan Stanley doesn’t mean you can’t have good ideas and people here will want you to share these

Myth 10: It’s not a long-term career 

People who join investment banks tend to be ambitious, highly-motivated individuals. There’s so much here to keep you inspired.

I’ve been in this profession for seventeen years and am still learning, both professionally and personally. Investment banking is constantly changing, so there are always new challenges needing focus and energy.

But, as with any career, some people realise that what we do here isn’t for them. If someone wants to pursue other options we’ll respect that and try to help them find a new career if we can. But I’ve really found these kinds of cases to be the exception.