Being a high-paying job right from the beginning, becoming an investment banker is a dream profile for any student with the finance, commerce or engineering background. If you wish to kickstart your career in this field, there are some basic things such as love for maths, numbers and analytical setup and more that we will find out in this article.
This article covers:
- What is an investment bank?
- What does an investment banker do?
- Jobs at an investment bank
- Pros and cons of working at an investment bank
- Qualifications to get a job at an investment bank
- Skills to become an investment banker
- How to get a job at an investment bank?
What is an Investment Bank?
An investment bank is known to be a financial intermediary which provides various services relating to financial transactions. These services are underwriting, facilitating mergers and acquisitions (M&A), sales and trading etc. Investment banks are not the ones which receive/accept deposits from the public. They guide the investors and provide capital investments to firms or organizations. Also, they provide investment services to provide benefits to investors.
Investment banks are different from commercial banks in that the commercial banks support large corporations and businesses with several activities such as opening a checking or savings account, borrowing money, getting access to credit facilities etc.
Let us move ahead and find out the role of investment bankers.
What Does an Investment Banker Do?
An investment banker, at the entry-level, usually finds himself/herself wearing many hats as a fresh graduate. People who enjoy challenges and love to find solutions as they go, can aspire to become an investment banker.
In general, investment bankers:
- Advise clients on financial decisions
- Analyse the performance of the firm on operational as well as financial basis
- Coordinate operational process
- Train or supervise the junior bankers or team members
- Perform valuation of securities
- Help clients restructure debt
Now, to be more specific, let us find out the jobs at an investment bank.
Jobs at an Investment Bank
The career of an investment banker advances fairly enough from bottom to top and is quite straightforward and simple to understand. Specific jobs for you from the junior level to the senior level at an investment bank are:
- Analyst
- Associate
- Vice President (VP)
- Managing Director (MD)
Analyst
Any fresher in investment banking begins with the role of an analyst and is also known as an investment banking analyst. They are the ones who are responsible for the majority of the tasks which help them gain the required experience in this domain.
Analysts are at the entry level and their main tasks on a daily basis are taking care of the analysis, presentations and administration. Investment analysts are the ones who find their niche and become specialists in a particular chosen field.
For the role of an investment analyst, you will basically require a bachelor’s degree in finance or business administration. Moreover, it is also common to see the freshers or graduates in accounting, statistics, mathematics and economics making it as an analyst. After this position, an investment analyst usually moves up to the position of a senior investment analyst or portfolio manager. The step after this is Chief Investment Officer (CIO). The average base salary after investment analyst position ranges between $1,26,000 and $1,74,000.
The average base salary of an investment analyst is $75,815 according to glassdoor.
Associate
Associates are above analysts and work very closely with them. Associates mainly check the work of analysts and assign the tasks to them. Associates do an in-depth review of the analysts’ tasks and go through models, inputs as well as the outputs to find out if the numbers make sense.
Associates are also directly recruited apart from some analysts having had been promoted. If an associate stays in this position for three and a half years, he/she will be promoted to the Vice President level. But it can also take more than three and a half years for the associate to be promoted in case the requirement at the VP level is not there.
For becoming an investment associate, you need a bachelor’s degree and in some cases a master’s degree also in the same subjects required of an investment analyst. The average base salary for an investment associate in U.S is $72,002 according to glassdoor.
Vice Presidents & Managing Directors (VPs & MDs)
The VPs & MDs come under the senior management or the senior bankers’ category. They play a vital role in making sure that the industry landscape is dealt in a detailed manner. They help to anticipate the deals in the investment sector.
The senior bankers reach this stage with a background that ranges from investment banking to corporate executive management. They mainly build relationships with the clients and source deals. Also, they are the ones who find out the capital requirements of the firm as well as the need for strategic discussions.
VPs and MDs are appointed up the ladder only after serving as the investment associate. VPs are appointed after three and a half years of being investment associate whereas, MDs are appointed after about ten years.
The salary range of a VP and MD goes upto $114000.
Next, you will explore some of the pros and cons of working at an investment bank.
Pros and Cons of Working at an Investment Bank
Pros
- Generous compensation
- Attractive bonus
- Elevated standard of living
- Good professional knowledge about industries, markets etc.
- Quick promotions and leadership roles
Cons
- Highly stressful
- Long hours of work
- Risky job as it is dependent on capital market
- Dependent on business sentiments and investors perception
- Not a very nice balance between work and leisure
Now, let us find out the qualifications to land a job at an investment bank.
Qualifications to Get a Job at an Investment Bank
For getting a job at an investment bank, anyone who is passionate about mathematical and analytical setup can aspire to become an investment banker.
Since investment bankers at the entry level are hired from undergraduate programs like B.Com or B.A. from a recognised university, it is not mandatory to have a degree in a special course.
Although, MBA (Finance) or a commerce background is good to kick start your career in investment banking.
Some diploma and certification courses as the background for investment banking is appreciated in the following subjects:
- Financial control
- Financial analysis
- Equity research
- Portfolio management and security analysis
- Banking and finance
- CFA or Chartered Financial Analyst
Out of all the above mentioned subjects, CFA is the exclusive qualification for being able to grab a senior position in the top investment banking firms.
Next, we will see the skills required to become an investment banker.
Skills to Become an Investment Banker
So, if you are thinking about getting a job at an investment bank because of your strength in the area of numbers, it is not the only skill/strength to rely upon.
Although the word ‘quantitative’ makes it evident that the numbers play a significant role in this job profile, there are some other skills you will need to be successful.
Some of the general qualities/traits you must possess are:
- Being able to thrive in a fast paced environment
- Being ambitious
- Remain willing to be a hard-worker while achieving your goals
- Willingness to work long hours
- Good work ethic
- Competitive nature
- Excellent writing as well as communication skills
- MBA from a recognised university
- Confidence with numbers is undoubtedly a skill which you should not underestimate
- Having financial knowledge and being ambitious about gaining daily
- Excellent team leadership skills
For getting a job at an investment bank, there is no particular or special study that you are bound to invest your time and efforts in. If you are interested in a field which requires mathematical and analytical understanding, you are on the right track.
Going forward, let us discuss getting a job at an investment bank.
How to Get a Job at an Investment Bank?
Investment banking is one of the rare fields that welcome fresh graduates from MBA background and pays really well. For such a lucrative job profile, you must be willing to take on challenges in this career path.
Moreover, to get the job at the investment bank, these steps are important:
- Finding out the gaps in skills
- Listing down career opportunities
- Networking and preparing for the interview
- Professional development
Finding out the gaps in skills
For finding out the gaps in skills, you need to see if you are missing out on some personal skills even after being really good with mathematics, finance or economics. In case you need to develop the same, it is extremely crucial to take it seriously and build upon the same.
You can avail the benefits from courses offered online such as Machine learning and deep learning in financial markets and Automated trading using Python for gaining further expertise.
Listing down career opportunities
Listing down career opportunities is another important step when you are aspiring to become an investment banker. These are the top investment banks where you can apply for the job:
Networking and preparing for the interview
It is highly recommended that you take professional help by gaining knowledge from an existing investment banker or prepare for interview questions. For this, networking can really help you. By using platforms such as LinkedIn, you can help yourself get an interview by showing your skills and talents. Getting an experience with the interviews a couple of times can also help prepare you for better opportunities.
Professional development
Last but not least is the professional development which implies keeping yourself updated all the time even after you have a job that you can rely on. Keeping up with the new opportunities and finding ways to better yourself professionally will help you enhance your capabilities. Also, you will be able to contribute exceptionally well to the company you are working for.
Conclusion
Being an investment banker is undoubtedly a high paying job with a lot of benefits. Still, when you aspire to become a part of investment banking, there are a lot of commitments associated with it as well. As an investment banker, you need to be a dedicated and ambitious self with a mathematical and analytical mind. Right from the start, this field provides you with endless opportunities to grow and succeed if you do it right.
If you are looking for a job that requires you to find the impact of risk with the help of analysis of historical data, the role of risk analyst might be the one for you.
If you are looking to pursue and venture into algorithmic trading then you must explore our comprehensive algo trading course. The algo trading course is a course taught by industry experts, trading practitioners and stalwarts like Dr. E. P. Chan, Dr. Euan Sinclair to name a few - is just the thing for you! Be sure to check it nout now!
Disclaimer: All data and information provided in this article are for informational purposes only. QuantInsti® makes no representations as to accuracy, completeness, currentness, suitability, or validity of any information in this article and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.
