A Comprehensive Guide to Career in Investment Banking

When municipalities and corporations wish to raise finance for funding their operations, they head over to an investment bank. The job of an investment banker is to work with these organizations and help then in underwriting or finding buyers for securities like stocks and bonds in order to raise the capital needed by the entities. Apart from underwriting securities, investment bankers can also assist corporations through complex procedures such as acquisitions and mergers or even initial public offerings. In order to do this successfully, an investment banker has to be well-versed in the workings of the financial market and in the legal requirements that need to be fulfilled.

A career in investment banking is considered quite prestigious and can also be rewarding. However, you should be aware of what is involved and what to expect before you become an investment banker. Here is a complete guide that provides you details about the different aspects you need to think about in order to start a career in investment banking:

Training

You can join the field of investment banking regardless of your background, but you have to have a strong foundation in mathematics. A prospective investment banker can have a bachelor’s degree in mathematics, accounting, and finance and can also come from other fields such as physics or computer science. Your employer provides you with a great deal of training. Graduates who have just earned their bachelor’s degree usually begin with an analyst role and undergo a training program before starting a job. These training programs are spread over several weeks and introduce you to new principles of risk markets, financial modeling, and accounting and financial statement analysis.

You also learn presentation, communication and negotiation skills. After completing your initial training, you may also take part in continuing education provided by the employer. In addition, you need just a bachelor’s degree for the entry-level investment banking analyst positions, but you will need graduate degrees like Masters of Business Administration (MBAs) and law degrees can also prove to be useful if you want to move to other positions.

Certificate and Licensing

You will be required to register with the Financial Industry Regulatory Authority (FINRA) as a representative of your bank when you decide to join the field of investment banking. You may also be required to pass an examination, depending on your job responsibilities. Moreover, you can also get voluntary certifications such as Chartered Financial Analyst (CFA) credential, which is offered by the CFA Institute.

Time

While you can become an investment banking analyst immediately after getting a bachelor’s degree, you need to have working experience of two to three years and a graduate degree in order to reach the associate status at an investment bank.

Earnings

The investment bankers are grouped with commodities, securities and financial services agents and they earn salaries of $70,000 and more. Furthermore, investment bankers don’t just get base salaries from their employer; they are also eligible for bonuses so it is possible for you to earn substantial sums of money in this field.

Job Prospects

According to statistics and predictions, the job prospects in the investment banking industry are expected to rise by 11% by 2020. While there will undoubtedly be additional jobs, it is also predicted that competition for these positions will be intense and people with voluntary certifications like CFA and graduate degrees will be in a better position to land jobs. You will start your career at the analyst level and then move onto an associate position with additional education and experience.

After associates, you can advance to the position of vice president with experience. Once you have spent some time supervising associates and analysts and interacting with clients, you can also become principals or directors at your investment bank and focus on building and developing relationships with new clients. Managing director is the highest position in the field of investment banking and at this level, your work is just to bring clients to the table. As you move up the hierarchy, your earnings will increase.

You can also visit websites of top investment banks for learning more about the requirements and training process that are involved in starting a career in investment banking.