Wondering How to Kickstart a Career in Investment Banking? Here’s a Guide to Help You

The global investment banking market is projected to reach $171.29 billion by 2027 at a Compounded Annual Growth Rate (CAGR) of 9.6%. As a result, an investment banking career path has emerged as extremely rewarding. Not only is it professionally challenging, but it also offers high earning potential with an average salary of $85,150 per year. However, to earn this level of compensation, candidates need to meet the finance industry’s expectations in terms of skills and knowledge. If you are among those looking to travel far on an investment banking career path, read on to know more about the skills needed, roles, and responsibilities.

Who is an Investment Banker?

Investment bankers are financial professionals who help institutional clients with mergers and acquisitions as well as raising capital, among other activities. They draw on their industry expertise, analytical skills, and persuasive communication abilities for best results.

A wide range of clients, including start-ups, large corporations, and in some cases even governments, are served by investment bankers’ corporate financing services. Whether these professionals work for an investment bank or the investment banking division of a firm, they are significant contributors to the financial growth and development of a company, organization, or any other corporate entity.

Why a Career in Investment Banking?

Apart from being a lucrative choice, an investment banking career path provides professionals with the exciting challenges of the financial industry, such as creating extensive and intricate financial models for important company transactions. Although new bankers may need to start their career with more basic tasks such as printing and binding pitchbooks, they learn many useful financial skills such as valuation work and auditing asset portfolios for clients. 

Investment Banking Responsibilities

To pursue a career in the field of investment banking, learning about investment bankers’ key responsibilities is imperative. These include:

• Creating different financial models for mergers and acquisitions and fund-raising transactions
• Executing valuation methods to determine the value of an asset, firm, or investment
• Cultivating relationships with current and new clients for business expansion
• Performing research, analysis, due diligence, and documentation of real-time business transactions
• Designing and creating pitches and presentations of portfolios to help clients
• When required, assist clients to find the best opportunity for investment 
• Analyzing investing trends and recognizing potential risks associated with particular projects

Investment Banking Career Path

A bachelor’s degree in finance is a minimum requirement to start a career as an investment banking analyst. Although a master’s degree is recommended for growth, you have the option to enter this field by gaining experience through internships as a financial analyst for a wealth management company, bank, or hedge fund. 

The typical investment banking career path progress looks like this:

1. Analysts

They are entry-level professionals who are engaged to support investment banking associates and bankers in different areas such as valuation, private placements, equity and debt, and merger and acquisitions.

2. Associate

Associates are responsible for preparing cash flow models and draft memorandums and various other important communications with clients. They are in charge of helping clients and ensuring high-level efficiency and satisfaction. 

3. Vice President (Account Manager)

They are responsible for communicating the progress of the deals or transactions to their clients. They also design the financial models for them. Further, the vice president manages the employees in junior positions in their firms. 

4. Director

The director works directly with clients on important transactions, such as capital raising and merger and acquisitions. Further, they are also responsible for creating powerful pitches and presentations for clients as well as strategies for the reallocation of resources for them.

5. Managing Director

They are at the top of the investment banking career path. Their prime responsibility is to build relationships with clients and generate revenue for the firm.

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How Can You Start a Career in Investment Banking?

To get started on an investment banking career path, candidates must possess adequate financial, analytical, communication, leadership, project management, and time management skills. Additionally, skills such as strong networking and an international outlook are also important. 

In this section, we will cover some crucial steps to help aspirants land their dream job as investment bankers. 

1. Evaluate the Job Role

To start a rewarding career in investment banking, an in-depth understanding of the responsibilities and job descriptions is important for determining if the role is aligned with the aspirant’s interests in the long run. 

2. Choose Preferred Specialization

Investment banking has a wide range of specializations. For instance, an investment banking operations professional is in charge of processing and settlement of financial transactions. To become successful in such a role, candidates need strong analytical and numerical skills. 

On the other hand, corporate investment bankers offer businesses different kinds of financial services such as lending, mergers, and acquisition. Therefore, the preferred skill sets for such applicants include strategic thinking, the capacity to manage stress, and strong negotiation skills. So, identify the preferred specialization to pursue and then concentrate on acquiring the necessary skills for it. 

3. Intern for a Reputed Organization

Interning at prestigious financial and banking firms is a great way to develop key technical skills and obtain real-world knowledge. During internships, aspirants can gain real-world experience that can help them develop the skills they need for future employment. Moreover, for top interns, several internship programs even extend full-time job offers, assisting them in starting their careers. 

4. Attend Industry Events and Networks

Interacting and engaging with peers at industry events and on social media can help aspirants learn new information and keep their skills up to date. Hence, they should consider attending conferences and seminars to stay updated on recent industry advancements and develop skills through networking with senior executives to advance their careers. 

Different Roles in Investment Banking

Professionals can choose different roles in the investment banking field, and some of the common ones are mentioned below. 

1. Certified Management Accountant

A certified management accountant possesses knowledge of financial planning, analysis, control, decision support, and professional ethics. They work for companies of all sizes and across all industries, including manufacturing, services, nonprofits, government agencies, educational institutions, and global conglomerates. 

2. Credit Manager

Credit managers specialize in managing and regulating credit management and determining appropriate credit limits. These professionals are in charge of overseeing each step of the credit-granting process, including the ongoing application of credit policies.

3. Financial Advisor

Financial advisors are investment experts who work with companies and individuals to meet their long-term financial goals. These professionals determine an appropriate class of investments for their clients after consulting with them about their investment objectives, risk tolerance, and stages of life or business.

Salary of an Investment Banker

Although most investment bankers draw a six-figure salary, the average compensation depends on several factors such as role, experience, and the expertise that professionals bring to the table. Here is a list of salaries of investment bankers at different levels in the U.S. 

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Is Investment Banking a Good Career?

An investment banking career path is extremely rewarding in terms of the nature of work and it is also very lucrative. However, it is important to know that with hefty pay cheques come hectic work schedules and tough market competition. So, if you are driven by the challenges of the job as well as the financial rewards, investment banking is a suitable career option for you. 

Boost Your Career with Emeritus

Are you interested in honing the in-demand skills related to investment banking and other finance-related roles? Explore a wide range of online finance courses on the Emeritus platform to gain access to world-class learning opportunities from top global universities. 

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