Top 3 CIBC Wealth Management Interview Questions

CIBC, like several other of the “big six” Canadian banks, has made a significant push into wealth management both in Canada and in the US over the last decade (even if they have a smaller retail footprint in the US relative to their Canadian peers like TD and RBC).

With that said, and as would be expected, Canada is still the primary market for CIBC, and as both Canada and the United States have entered into a more volatile time that should translate into enhanced revenue for CIBC’s wealth management business (in volatile times clients tend to become more active – although, at an extreme, if clients begin to rotate from wealth management services to “hoard” cash then that could lead to wealth management revenues declining to a degree as AUM compresses in).

On the economic front, Canada is in a tenuous, but yet precarious, position. Because despite the raft of tariffs announced on April 2, Canada and Mexico both came out relatively unscathed with no new tariffs announced. However, as it stands now, there are still significant tariffs on Canada (an effective rate of somewhere between 5-5.5%) since it’s estimated that only 80-85% of Canadian exports are eligible for a USMCA exemption and there are still 25% tariffs on steel, aluminum, and autos (although as it relates to autos there is a carve out for American-made content).

Thus, while the Bank of Canada and most forecasters anticipated a 2.0-3.0% hit to GDP in 2025 and a 1-2% rise in CPI from the 25% broad-based tariffs (with no carve outs) previously contemplated by the US under the current tariff regime it’s estimated that there’ll be a hit to Canadian GDP of 1.0% in 2025 and that prices will rise a modest 0.3%.

But things are never so simple: due to the still significant shock to the Canadian economy from the tariffs that have been implemented, combined with the overall uncertain environment Canada finds itself in, there may be significant spillover effects that push the hit to GDP to more than 1% in 2025.

Further, since Canada’s economy is so reliant on US exports, as evidenced by how severe the anticipated Canadian recession would be under 25% tariffs, if the US economy begins to slow from the more aggressive tariffs that have been applied against the rest of the world then that’ll feed back into lower growth in Canada too (in other words, even if the direct impact from this new tariff policy is modest, Canada might still feel the indirect impact from slower global growth).

In fact, we’re already beginning to see some preemptive slowness feed through into the Canadian economy due to the sharp rise in uncertainty from what the direct impact of tariffs will be, how Canada will be impacted by the indirect impact through slower US and global growth, and whether all of this will change in the near- or medium-term...

But if we largely ignore these second order impacts, Canada should be in for a sluggish – but not devastating –2025 with GDP of around 1.0-1.5% and CPI of 2.5-3.0%. And this may lead to even more preemptive Bank of Canada rate cuts to try to soften the growth blow (markets are currently pricing in around a 2.25% terminal rate compared to the current rate of 2.75%).

CIBC Wealth Management Interview Questions

When it comes to wealth management interviews at investment banks, a familiar script will unfold in which you’ll go through a few structured interviews that put a significant emphasis on your market knowledge and your ability to communicate what you know in an in-depth but also digestible way (i.e. in a way that would impress, but not overwhelm, a client that wanted to hear your thoughts on markets).

• If markets began to further price in a recession, how would you shift allocations between cash, bonds, credit, equities, and commodities?
• Based on the current economic backdrop and policy mix, is a 60/40 portfolio vulnerable?
• Do you think it’s likely that the US will be in a recession over the next 12 months?

If markets began to further price in a recession, how would you shift allocations between cash, bonds, credit, equities, and commodities?

Since the reciprocal tariff announcement, the one point of consensus across all banks is that macro conditions have deteriorated – which has led to sharp revisions down in anticipated growth, increases in inflation expectations, and tremendous volatility across asset classes as people position for a “new normal” (although, as seen with the April 9^th pause on the reciprocal tariffs, the new normal can be changed in a moment’s notice).

While the year began with an almost unprecedented level of enthusiasm for risk assets in the US – with most managers overweight equities, especially tech-focused equities that have seen over a decade of outperformance – we’ve seen a sharp reversal in sentiment (which could change as quickly as the tariff policy itself has over the last few weeks but does appear to have a level of stickiness to it).

And this reversal has largely been based on the fear that recession odds have increased (most banks have their odds at 50-50 right now, with some like JP Morgan seeing a recession as more probable than not even if new trade deals are quickly struck and tariff levels come down significantly from their current lofty heights).

Given this, if markets began to further price in a US recession – or significant global economic weakness occurred, since remember that tariffs will be a net negative for all countries impacted whether to a greater or lesser extent than the US – then we’d see further flight from risk assets (especially US risk assets that started from elevated levels to begin with) and commodities that don’t have a safe haven status (we’ve already seen this with significant declines in oil and copper – commodities that are quite closely linked to global economic growth expectations).

On the other hand, if further economic weakness is one’s base case then you’d want to be overweight cash (for obvious reasons) and overweight investment grade credit (to pick up a bit of yield over what money market funds can offer while also playing it safe – one might want to be neutral, or even overweight, high yield credit if one’s base case is that a more shallow US recession occurs that won’t lead to significant corporate defaults).

When it comes to sovereign debt, this would be another obvious area to be tactically overweight if one believes that central banks will respond to a mix of higher-than-expected inflation and lower-than-expected growth by cutting rates (since tariffs should represent a temporary increase to inflation, not the start of a self-perpetuating cycle of inflation that would require rates to permanently reset higher).

However, for central banks that already have their rates at low levels, like Japan, the response function might be different and this is why Goldman is tactically underweight the JGB 10 year because there’s more room (in yield terms) to the upside (relative to other large developed economies) which means there’s more room (in price terms) to the downside.

Based on the current economic backdrop and policy mix, is a 60/40 portfolio vulnerable?

In my last blog post we discussed how a classic 60/40 portfolio (60% equities, 40% bonds) had been on a remarkable run through 2024 as equities powered higher while at the same time inflation came down alongside rates.

But the whole concept behind a classic 60/40 portfolio is that there should be a natural insulating quality to it: when equities perform poorly due to lower economic growth expectations, that should lead to easier monetary policy and a fall in rates (i.e. yields down, prices up) and vice versa. Therefore, over time a 60/40 portfolio is volatility (and return) dampening – you won’t necessarily benefit fully from the wild upswings in equities but also won’t suffer major drawdowns since each “segment” of the portfolio will more often than not move in opposite directions.

However, there’s nothing written in stone that this needs to be the case, and in 2024 we saw an economic recipe such that the 60% and 40% of a classic 60/40 portfolio moved in the same (positive) direction which led to the outsized returns discussed. Likewise, in 2025 we’ve see a bit of the opposite: upon the announcement of the tariff policy we saw an immediate, visceral reaction from equites to the downside but because of concerns about whether this policy mix would lead to significant inflationary pressure and cause the Fed to keep rates even higher for even longer, we’ve seen strength in yields (even though some forecasters have begun to anticipate 3-5 rate cuts later this year when the full impact of tariffs are felt).

This has all been a recipe for significant 60/40 underperformance where the only real “protection” this asset mix has offered is that yields haven’t risen as much as equites have fallen – but, importantly, they’ve both moved in the same direction in price terms (down) no different than how they both moved in the same direct in price terms (up) in 2024.

While this is an obvious concern, we could begin to see a bit of a reversal in the coming months if we begin to see tariffs actually have a material negative impact on the economy – because the Fed will be forced to choose which side of their dual mandate to focus on, and most believe that they’ll be willing to stomach a bit higher inflation in order to protect the labor market (thus yields should fall, and prices should rise). And if we do see a material negative impact on the economy, then equities are likely to decline (so it’ll be back to a more historical norm of equities and bonds moving in opposite directions in price terms).

It's important to note that few now see a “no landing” scenario as likely (one in which rates remain elevated because growth is elevated above trend). Instead, people are now divided into two camps: the “hard landing” camp in which rates come crashing down because economic growth does the same, and the “soft landing” camp in which growth slows, but not to recessionary levels, and rates can then be gently eased down (which will be a benefit to at least the 40% side of a 60/40 portfolio although in this scenario equities probably wouldn’t perform overly well).

Do you think it’s likely that the US will be in a recession over the next 12 months?

There’s been no shortage of hot takes on how the current tariff policy will roil not only the US economy, but also the global economy (in fact, it’s certain that the tariff policy will have a larger impact on some major US exporters than it will on the US itself due to how reliant on exports to the US some countries are and how much of a services-based, internally driven economy the US is).

But, regardless, there’s no doubt that the anticipation of economic weakness in the US has shot up (although the last time it reached these heights, in November of 2022, that economic weakness didn’t materialize in earnest despite the anticipated consequences of the Fed’s aggressive rate hike cycle).

Further, after inflation expectations began to fall in 2024 after a prolonged period above trend, in a matter of weeks inflation expectations have risen significantly which now places the Fed in an incredible bind (having to navigate around potentially higher inflation and slower growth and thus needing to choose which to focus on).

However, it’s important to recognize that consumer expectations of higher inflation (as captured by uMich surveys) have not always proceeded actual higher inflation – there have been lots of head fakes along the way with the exception of the inflation episode of 2022-23 which, ironically, did not show up well in inflation expectation surveys.

With all that said, with the rollback of the reciprocal tariffs we’ve now entered an environment where the consensus is for 1-1.5% GDP growth in 2025 and around four 25bps cuts by the Fed (although, as MS suggests, and as Powell’s comments on April 16^th seemed to confirm, the Fed might act on a delay that could exacerbate economic weakness – providing a salve after the wound has begun to fester).

Which, to be fair to the Fed, is almost unavoidable as no one has a crystal ball to see what kind of real economic fallout, or imported inflation, will come from these tariffs (not least because no one knows what the ultimate tariff level will be). As such, what is “behind the curve” is based on what is to come, which no one can predict – and what we do know now is that we’re coming off a strong jobs report and solid, soft inflation data.

However, what all will watch to see which side of the recession / non-recession coin we land on is whether uncertainties in trade policy continues to translate into weak soft data such as employment expectations and capex plans (all of which could lead to actual negative hard data in a few months).

Further, another sign of if a recession will occur is if the data we’ve received around new orders and announced job cuts continues for several more months and thus represents a trend as opposed to a temporary disruption due to these policy uncertainties.

If we do see a continuation in the current trend on these measures – and a feed through from soft data like employment expectations to hard data like nonfarm payrolls – then a recession will begin to be priced in much more, and risk assets (like equities) will probably have more to fall (since we’re still above levels consistent with a recession).

But, on the other hand, we’ll probably begin to see more rate cuts priced in and the Fed may begin to soften their tone around keeping rates higher for longer which could buoy markets. (Remember that most of the damage to equities typically comes before a recession has been determined to have begun, as opposed to in the midst of the recession itself.)

Conclusion

CIBC, like RBC and TD, have placed a consistent emphasis on their wealth management business in Canada for decades and have begun, over the last decade, to make a more concerted effort to break further into the US market.

As mentioned earlier, the structure of the interview itself will mirror those of other investment banks with large wealth management divisions: multiple rounds that’ll include questions on where markets are now alongside more traditional behavioral and technical questions.

With that said, if you’re interviewing for a role in Canada then you’ll have the additional challenge of needing to be able to talk about what’s happening in both the US and Canada since Canadian markets are so tethered to US markets (i.e. rates have historically been quite correlated) and, more importantly, US markets are heavily allocated to by wealth managers in Canada. So, know the growth and inflation trajectories for both the US and Canada, how both the Fed and Bank of Canada are anticipated to respond to the current environment, have a view on where you see equities going in both the US and Canada, etc.

In the end, it’s a bit more homework to get up to speed on two separate economies and two separate sets of markets – but, at the same time, having a bit of knowledge (even if it’s a mile wide and an inch deep) on what’s happening in both countries will make you stand out from the crowd and more than impress your interviewer.