While an analyst study the performance of organizations and industries, and fund managers handle equity funds along with other assets, investment bankers hold the responsibility of underwriting new securities issued by bank’s clients and help in raising funds in the capital market.
A career in investment banking has been a popular choice for fresh graduates from the finance field. It is a popular field well-known for lucrative salaries. To enjoy a career as investment bankers, applicants must have stellar academics and should be business-oriented. Despite the events that keep taking place, it also seems that the appetite for a position within the financial sector is insatiable.
Breaking into the investment banking career
The demand for talent in the financial sector may be increasing, but getting into investment banking isn’t just a cakewalk. Besides earning stellar academics, the candidate needs to possess expertise in the financial sector like regulatory work, risk management, insurance, and portfolio management.
Precisely, most investment banks favor internships as a hiring technique. This could be an ideal opportunity for a budding investment banker. Before becoming investment bankers, there are three basic factors you need to understand.
- Decide whether investment banking is the right fit for you.
- If so, you need to win a full-time offer.
- For early-stage interns – you need to start building work experience.
For instance, you’ve been hired as an intern. What should be your next step? Let’s have a look at the typical career progression as an intern in an investment banking firm.
- Interns
- Investment banking analyst
- Investment Banking Associate
- Vice President (VP)
- Director or Senior VP (SVP)
- Managing Director (MD)
This is how your career progression may look like, provided you get hired via the internship funnel.
Salaries and compensation
An investment banking career may have constant work pressure, but compensation is always high. Working in this field has its pros and cons, while investment bankers are also the highest paid profession in the finance sector.
Below is a summary of what aspirants in this field can expect – the total compensation in USD.
- Analyst (22-27 yrs.) – $150-$200K
- Associate (25-35 yrs.) – $250-$400K
- Vice President (VP) (28-40 yrs.) – $450-$700K
- Director / Senior Vice President (SVP) / Principal (32-45 yrs.) – $500-$1,000K
- Managing Director (MD) (35-50 yrs.) – $1,000K+
What exactly do investment bankers do?
Most investment bankers start their careers as analysts. And as an analyst, your job is to support senior bankers in winning a deal or closing a deal.
Here’s how an analyst job role might look like:
- PowerPoint and other presentation work – 50 percent
- Random administrative tasks – 30 percent
- Excel-based financial modeling and valuation – 20 percent
The job role as an analyst looks mundane because it is, nonetheless, this job role is not for the f senior long-term. It is a stepping stone to a senior-level role in private equity, investment banking, and hedge funds. As a beginner, you learn a lot and it also gives you the opportunities to exit the job role and hop into another wide range of sought after job roles.
How to land my first job in investment banking?
There are typically four pathways to enter the investment banking field:
- Undergraduate from top-tier universities
- A recent graduate
- An MBA graduate
- Beyond the MBA graduate
The highest probability lies in the first three options – at the undergraduate level, a recent graduate, or an MBA graduate.
Degrees in subjects like mathematics, computing, finance, business, physics, and economics are more than enough to attract employers.
However, some fresh graduates or professionals might work their way toward professional certification.
If you tend to do so, ensure you find the best investment banking certification program with the appropriate professional certification body.
The investment banking is a highly sought after and challenging field, are you ready?