Investment bankers are experts that evaluate the financial risks connected with company operations. These financial risks can help save time and money for firms like banks and non-profit organisations. Additionally, they help in acquisitions, mergers, and sales. They also curate data, paperwork for businesses, investment planning and pricing. Investment banking is a high-profile financial profession. To become an investment banker, you will need high-level analytical, quantitative, and critical thinking abilities. The job typically necessitates the high-profile talents and business acumen that only an MBA can provide.
As of January 2023, the average salary of an investment banker is $82,215. However salary may range from $44,000 to $185,000.
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Investment banking is one of the careers with high-paying salaries in the United States. An entry-level in this field can earn as high as a six-figure salary. In the same way, senior investment bankers earn tens of millions of dollars annually. However, it is crucial to note that getting to the top isn’t an easy feat as it requires education, ambition, skill, experience, and above all, connections.
How to Become an Investment Banker
While a career in investment banking may pay well, you must ask yourself if the job is best for you. You must also be certain that your capabilities are compatible with the profession since this will decide your success throughout the course of your career.
The profession requires a person who is not only good with numbers but also understands banking and financial instruments. The person must also possess meticulous attention to detail, multitask and thrive in high-stress environments. Furthermore, as an investment banker, you will have to work 90-100 hours weekly and 14-hour daily.
Once you’ve decided to pursue a career in investment banking, knowing what’s expected of you as an investment banker will help you stay focused on maximising job experiences. It will also help you advance in your career faster.
Essentially, there are two types of an investment bankers; the corporate investment banker and the operational investment banker. You will need to decide what side of investment banking you would want to pursue
Corporate Investment Banker
A corporate investment banker provides a range of financial services. They manage corporate, financial and strategic opportunities such as acquisitions, bonds and shares, lending, mergers and privatisations. Additionally, they advise and lead management buyouts, raise capital, provide strategic advice to clients and secure new deals.
Corporate investment banking operates in three categories. They are debt capital markets, corporate finance and equity capital markets.
The corporate investment banking career is a high professional standard job and therefore considered a graduate career job. Recruiters will likely look for people with an MBA to raise the competitiveness standard.
Furthermore, some companies offer associate investment banking internships. These internships are taken during the course of an undergraduate degree and last for up to 10 to 12 weeks. However, some companies offer shorter internships during the spring and are available only for first-year students.
Gaining this internship experience is essential as it demonstrates a long-term commitment to working within the industry.
Additionally, an accountant or lawyer can become an investment banker after training.
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Operational Investment Banker
Operational investment bankers are in charge of processing, clearing, and settling financial transactions in an investment bank or management organisation.
The operational investment banking career is also a highly professional standard job and considered a graduate career job.
An applicant must possess a minimum entry requirement grade of 2.1. However, some recruiters may increase their competitiveness by searching for candidates with a first-class degrees.
1. Acquiring a Bachelor’s Degree
Getting a bachelor’s degree in banking and finance, accounting, economics, business, and mathematics is a good starting point for a career in investment banking. Recruiters may consider a bachelor’s in other disciplines, preferably degrees grounded in mathematics. Choosing the right school will help tip the odds in your favour in the labour market. Graduates of top profile schools such as the London School of Economics, the University of Oxford, the University of Warwick and many more are more likely to land jobs faster than a regular school.
Nonetheless, graduates from a less prestigious institution can also start a career in investment banking.
2. Earning a graduate degree or MBA
Many companies prefer associate bankers and those in mid-level positions to have a graduate degree. Earning a master’s degree in a financial subject, such as business administration, corporate finance, or any related financial degree, can further help you scale your career.
You should ensure to enrol in graduate schools that offer high hiring rates for their graduates. This is because such schools have internship programs and strong banking organisation networking structures already in place.
Nonetheless, a lesser-known institution will still provide you with an MBA or graduate degree, but they may not portray an impression on prospective employers.
3. Obtaining certification and registering with a financial body
It is important to register yourself in a financial banking or finance body at the start of your career. Furthermore, you will need to enrol in a course study and pass a specific exam before joining some of these bodies. A job seeker can also pursue optional certifications, such as:
- Chartered Financial Analyst (CFA) certification
- Chartered Alternative Investment Analyst (CAIA) certification
- Financial Risk Manager (FRM) certification
- Certified Financial Planner (CFP) certification
- Certified Fund Specialist (CFS) certification
- The Chartered Financial Consultant (ChFC) certification
- Certified Government Financial Manager (CGFM) certification
- Chartered Investment Counselor (CIC) certification
- Certified Private Wealth Advisor (CPW) certification
- The Certified Investment Management Analyst (CIMA) certification
- Certified International Investment Analyst (CIIA) certification
4. Network
Investment bankers spend their time selling financial products. As an investment banker, your first task is to sell yourself to every client you meet. Because part of the clientele base of the investment banks is fortune 500 companies or high-profiled people, you will need to mingle more and relate with clients. Every opportunity with a person counts as they have the power to hire you or recommend you to people who do the hiring.
It is also important to wear good clothes, let your dressing make an impression. You must dress and look the part, so you can fit into the crowd of rich people who are likely your potential employer.