Investment Banking Careers: what are they and how to get one?

An exciting career at an investment bank offers plenty of opportunities for personal development and professional advancement. An investment banker’s job isn’t always dependent upon previous experience and hard work. You as an investment banker will be challenged by some new experiences and will encounter various obstacles. Before deciding which career path to take for an investment bank job, you need to be familiar with the field itself.

Functions of an investment bank

  • An important function of an investment bank is acting as an intermediary between companies looking to issue stocks and bond offerings, and investors willing to buy shares in these firms. Investment bankers play an important role in this process. Banks benefit from charging fees and commissions for offering investment banking services and other types of financial advice.
  • Risk management is also a vital investment banking function that involves managing risks continuously throughout the trading period, which means setting limits for losses.
  • Merchant banking is an investment banking function that provides consultancy services to its clients. They guide in the areas of finance, marketing, law, and management and function as a financial engineer for a company.

Investment banking career requirements

Those who are interested in pursuing a career in investment banking must be:

  • High achievers who are willing to work long and grueling hours to attain their goals.
  • Dedicated to the smallest of details.
  • Equipped with solid reading, writing, and math skills, however not exceptional in either area due to the lack of “real math” requirements.
  • Interested in agreements than in following the markets or investing in public companies or other assets.

Typical qualifications and work experience required

Investment banking firms recruit junior investment bankers who typically come from elite academic institutions such as Harvard University, Yale University, Princeton University, Columbia University, Stanford University, MIT, and so on. After completing their undergraduate degree, they go through an internship program at a financial institution where they learn everything that is to know about finance before returning for a full-time position at one of these institutions.

Professionals could also get into finance by doing something else first. For example, they might start out valuing companies before moving onto corporate banking. Those who are from an elite business school and have got the right work experience, then they could break into management consulting at the MBA level.

Professionals, regardless of their level, will always require the following to enter into the investment banking industry:

  • work and leadership experience that appears to be extremely useful for investment banking jobs
  • academic credentials (grades, exam scores, and reputation of the university)
  • a great deal of networking and interview preparations

An entry into the investment banking profession (analysts or associates) typically requires having either an undergraduate degree in finance (or) an MBA in finance or some relevant financial background.

Salaries of IB analysts and associates

According to the latest reports by Glassdoor:

  • an IB analyst earns an average of USD 95,000 – USD 130,000 per annum.
  • an IB associate earns an average of USD 150,000 – USD 300,000 per annum.

Investment banking certifications

The nature of these jobs is fast-paced, dynamic, and ever-changing, so is the demand for professionals in this field. Due to the fierce competition, several candidates are rejected. Professionals and graduates who want to break into this field should focus on their networking skills as well as earning investment banking certifications to set themselves apart from their peers and coworkers. Some of them are:

  • Certified Financial Modeling and Valuation Analyst  (FMVA) by the Corporate Finance Institute (CFI)
  • Chartered Investment Banking Professional (CIBPTM) by the Investment Banking Council of America (IBCA)
  • Certified Mergers and Acquisitions Professional by the Institute of Financial Consultants (IFC)

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