Home » Certificates For Investment Banking: Are They Useful Or A Complete Waste Of Time?

Certificates For Investment Banking: Are They Useful Or A Complete Waste Of Time?

If I received a coin every time a student asked about the utility of finance certificates, I would be richer than Jeff Bezos.

It appears that candidates are obsessed with online certificates. They see it as a way to build value on their CV and increase their chances in IB recruiting processes.

But are these certificates really useful? Do they make any difference in helping you stand out from your competitors? Or are they just “cash grabs” made by large EdTech companies that are taking advantage of applicants’ desire for social recognition to make a profit?

That’s what we’re going to see in this article, in which I will, as usual, remove the gloves and share what you need: the truth.

Online certificates: useful or useless?

No need to beat around the bush: certificates are, in the vast majority of cases, useless when it comes to helping you stand out from other candidates. They are highly unlikely to make any difference on your CV.

Right now, you probably feel bad. Especially if you’ve already invested hours of your time completing the BMC, or spent your Saturday evenings learning about the various finance certifications that exist on the market. But that’s what it is.

Candidates who spend lots of time completing certificates are usually doing so to compensate for a lack of experience. They think that adding these certificates to their CV will make them more competitive.

But aside from making you feel like you’re taking steps to improve yourself, it won’t really impact your chances.

I’ve worked in the investment banking industry for years, I’ve been involved in recruitment, and I can tell you that no recruiter will ever think “wait, I really like this candidate but he didn’t do the BMC!”

There are several reasons that explain why finance recruiters couldn’t care less about certificates:

There are no barriers to entry to completing these certificates, making them very easy to obtain. Anybody with time can finish these online courses and receive their “Certificate of Completion”, with a fancy serif font, an official-looking stamp, and their name copied and pasted digitally at the center… Since virtually anybody can get these certificates, barriers to entry don’t exist, meaning that they have no intrinsic value, meaning that recruiters don’t pay attention to them.

The assessment methodology of these certificates is not recognized by any credible, widely known entity, which makes their legitimacy questionable. You can be very bad at financial modelling, and yet hold an “Expert Financial Modelling” certificate after sufficient test attempts. Most of these certificates say little to nothing about your real degree of competence in a certain area (with a few exceptions, as we’ll discuss later). Recruiters know this too well, which is why they don’t attach much importance to these certificates.

Certificates don’t say anything about your ability to be a competent investment banking analyst. There are no certificates to prove your capacity to present data compellingly, deliver complex demands within tight deadlines, and get along with ultra-competitive, overworked, sleep-deprived co-workers.

“But Aurelian, if all other applicants are doing these certificates, wouldn’t I put myself at a disadvantage if I didn’t pursue them?”

No you don’t. I know where you’re coming from. You think that since so many candidates are loading up their CVs with certificates, recruiting standards have increased, and as a result, candidates who don’t pursue these certificates will fall behind. Having been involved in recruiting, I can tell you that this is false.

Recruiters don’t care about these certificates, they care about other, more tangible indicators of potential, including your former professional experience, your educational background, your leadership accomplishments, your interests, and the way you convey your personal story.

What are the main types of certificates, and what are they worth?

There are several types of certificates you can do:

Finance MOOCs: online courses offered by educational platforms like Coursera or eDx. These courses are available to everyone, many of them are free (although they often offer you an option to pay to get a certificate of completion), and are not particularly challenging to complete provided that you have time.

My view on these courses: useless in 99% of the cases, no intrinsic value, only good if you’re interested in learning about a new subject and want a brief introduction.

Financial modeling certificates: these certificates are typically offered by established finance prep providers, and are designed to improve your skills in financial modelling.

My view on these courses: the best quality ones are indeed useful to develop your financial modelling skills. Good idea if you feel like your modelling skills are subpar for interviews.

University online certificates (Continuing Education): these certificates are paid online programmes offered by universities on a variety of subjects, including finance and investment banking. Some of these courses are offered by top-tier universities and are extremely well made, diving into learning topics with great depth.

My view on these courses: Some of these courses can help you acquire high-quality knowledge in a variety of finance-related topics. They go into much greater depth than MOOCs, and can be a good investment if you’re strictly interested in the knowledge that these courses provide. Don’t do these certificates if you’re only interested in the brand name of the university that offers them. Completing an online finance certificate at Cambridge doesn’t make you a Cambridge grad in any way. Recruiters are not stupid…

Professional certificates: technical certificates provided by widely recognized institutions. The CFA, CPA, and CAIA fall into this category.

My view on these courses: I won’t go into too much depth here as I’ve written about the CFA already, but in short, they can be very useful to get a job in certain specific industries (CFA for Equity Research, CPA for Accounting, ARGUS for Real Estate).

When should you consider completing a certificate?

You’ve optimized your market value as a candidate on all the critical aspects that truly matter: you’ve networked extensively with senior bankers, you’re extremely well prepared on the fit and technical side, you have a strong education background with top grades, you have plenty of impressive leadership experiences, you have a few IB-relevant professional experiences under your belt that are properly marketed, etc. If you still have free time after all of this, go for it.

You’re looking to break into an industry that places a high value on certain professional certifications. If you want to work in Equity Research on the buy-side or sell-side for example, pursuing the CFA is a great idea. Recruiters will value you if they see that you’ve completed some or all of the CFA Levels. Note however that these professional certificates require a considerable amount of time and dedication, so you shouldn’t see certificates as a priority if you’ve not yet “maxxed out” your applicant value in important areas.

You have a genuine intellectual desire to learn about a specific topic on which it’s difficult to acquire reliable information. For example, if you want to learn about private equity in emerging markets, it’s arguably a superior option to pursue an online course on the subject than randomly googling articles on this topic.

In all other cases, stay away from these certificates.

Finally, note that there is a difference between a certificate, and a course. A certificate is what you may get after completing a course. A course is a learning resource which enables you to develop your knowledge in one specific subject. In this article, I’ve been arguing that most certificates are useless, but I’ve never said that most courses are useless.

For example, we provide a course that helps students secure prestigious job offers in investment banking. This course is in itself very valuable, as it significantly increases your chances of getting a top IB role. But we don’t issue any “certificate” for that course, that would be useless.

My point is: what matters is the knowledge you gain from a course, not the piece of (virtual) paper you get after completing it…

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A word about the author

Aurelian Tran is the founder of Alpha Lane and an ex-Goldman Sachs analyst who has spent 4+ years working in the investment banking industry.

He founded Alpha Lane to help students and young professionals achieve their highest professional ambitions, by securing offers at top-tier financial institutions.