Investment Banker Career Overview
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When a company needs money to launch, continue operating, or plan for expansion, investment bankers help them find funders. These professionals connect investors with promising ventures that match their needs and facilitate the sale of stocks. They also assist clients with mergers and acquisitions. Investment banking offers an exciting and potentially lucrative career path for those interested in the world of finance. According to PayScale, investment bankers earn a median annual salary of $100,000.
Investment bankers work in the financial industry, typically for banks and investment corporations. The job requires analytical skills to assess company assets; customer service and communication skills to work with clients; and a willingness to travel.
This guide provides in-depth information about investment bankers, including day-to-day tasks, necessary skills, and detailed salary data.
What Does an Investment Banker Do?
Investment bankers strategize with client corporations to determine the best route for funding new projects or continuing operations. Often working with a team, they analyze financial data to form a proposal for selling bonds or stocks. They may also suggest taking on loan debt or combine these solutions into a comprehensive plan. Once they decide on a strategy, the investment banker creates a full company profile and shifts to the sales side of the job.
Entry-level investment bankers usually participate in post-hire training that can last several months. They plan with clients, analyze data, write reports, and facilitate sales, building experience at each stage of the process. Within 2-3 years of working for a company, investment bankers can advance to lead teams and oversee client accounts.
Successful investment bankers need the educational background to assess an organization’s financial standing and the tenacity to engage in high-level sales. Aspiring professionals should consider the competitive nature of the field and make sure to network extensively. The section below outlines some important skills for investment bankers.
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Key Soft Skills for Investment Bankers
- Decision-Making: Investment bankers must make decisions about the value of a company’s stock. They also decide which investors to approach.
- Interpersonal Skills: Investment bankers work with clients, investors, and colleagues on an ongoing basis. They must listen well, express themselves clearly, and engage in sales-related activities that require first-rate interactions with others.
- Detail Orientation: When assessing the needs of a client organization, investment bankers sift through each detail of the company’s financial data. They explore every bit of data to better serve the client and potential investors.
- Initiative: Investment banking tasks include securing new corporate clients and reaching out to new investors. Successful investment bankers must engage in self-motivated work and demonstrate confidence.
Key Hard Skills for Investment Bankers
- Mathematics: Investment bankers need superior math skills to perform the in-depth financial analysis their clients require. They apply high-level algebra, calculus, and statistics to their daily tasks.
- Economics and Accounting: Employers often expect investment bankers to understand economics and accounting at an MBA level. These professionals use knowledge of financial markets, banking, and accounting foundations regularly.
- Tech Savvy: Investment bankers use many different financial analysis software programs, such as Bloomberg Professional and Triple Point Commodity XL. They must also demonstrate proficiency with Microsoft Excel.
- Risk Analysis: Funders rely on investment bankers to help balance the uncertainty of investments against their potential return. Investment bankers use their knowledge of the market and financial analysis to provide this information.
A Day in the Life of an Investment Banker
The CFA institute also licenses financial professionals through the certificate in investment performance measurement (CIPM). The program lasts about 18 months and consists of two exams. By obtaining CIPM credentials, investment bankers can develop their skills and demonstrate proficiency in investment performance evaluation, manager selection, and investment reporting.
Required Experience for Investment Bankers
Employers often expect investment bankers to enter the field having completed some work as an intern. Internships often provide important networking opportunities that lead to potential job opportunities. Undergraduates and MBA students can take part in internships. A typical internship takes place over 8-10 weeks, often during the summer.
Investment banking follows a fairly rigid advancement structure. Employees can expect 2-3 years of entry-level work before advancing to the next level. With an MBA, a new investment banker may advance more quickly or qualify for further job opportunities. By pursuing an online MBA, students can gain crucial work experience and complete their studies at the same time.
Frequently Asked Questions
How long does it take to become an investment banker?
The educational requirements — a four-year bachelor’s degree plus a two-year MBA — could take students six years or more to complete. Some students enroll in accelerated programs and graduate early, while others attend part time and graduate later.
What degree is needed to be an investment banker?
Aspiring investment bankers should complete a bachelor’s degree in some area of business. Most employers also require workers to possess an MBA.
Do I need a master's to become an investment banker?
Many employers prefer to hire investment bankers with an MBA. Some bachelor’s graduates may find entry-level work, but an MBA is often necessary for advancement.
How much does an investment banker make?
According to PayScale, investment bankers earn a median yearly salary of $100,000. Salary potential varies based on experience, location, and education.
What requirements are there to become an investment banker?
In addition to the educational requirements, some employers expect investment bankers to obtain professional credentials such as CPA, CIPM, or Series 7 certifications.
Is it hard to become an investment banker?
Investment bankers must demonstrate proficiency in math, strong knowledge of economics and market trends, and excellent attention to detail. Some students may find this more difficult than others.
Is investment banking stressful?
Investment banking careers can include long hours and high-pressure situations. Prospective investment bankers should consider their interest in sales, which is an important factor in the job. This aspect is exciting to some but stressful to others.
Professional Organizations for Investment Bankers
Based in North America, AAFA helps recruiters and job seekers to connect with one another. The association hosts a network, hiring resources, and extensive job listings.
This community of banking experts provides members with professional resources, including policy advocacy, webinars, continuing education, and on-call expert assistance.
The AFA devotes itself to the academic study of economics and connects financial scholars through an online directory, an annual conference, and an academic journal.
This career-focused organization provides job resources, including training and certification, career advice, networking events, and coaching.
An international organization, FMA bridges the gap between financial scholarship and practicing professionals through publications, conferences, and an extensive library of online resources.
FSP focuses on professional networking, connecting financial professionals with lawyers and insurance agents across industries. The organization hosts social events, provides a professional online library, and produces journals and newsletters.
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