1. Research the Profession
Before you commit, you should always research any potential decisions thoroughly. This will enable you to get a clearer, more unbiased picture of what you’re getting in to, as well as give you a better idea of how to get involved.
Corporate investment bankers work with large businesses, institutions and even governments to manage corporate and strategic activities, including mergers and buyouts, the issuing of bonds and shares, and the raising of capital.
Typically, corporate investment bankers are split into three main areas:
- Corporate Finance – Primarily advising organisations on strategic plays and transaction processes. Corporate finance bankers are usually experts in a particular industry.
- Debt Capital Markets – Designing and restructuring the debt obligations of organisations.
- Equity Capital Markets – The how, when and where of raising capital through research and analysis of markets.
Investment bankers work alongside other business professionals, focusing on specific projects across different market sectors. Their main responsibility is to advise organisations on how to achieve their short- and long-term goals. They do this by:
- Conducting in-depth research and analysis of market trends and developments
- Identifying and suggesting potential business opportunities
- Building financial models and presenting the results to clients
- Liaising with the chief financial players of client organisations
- Coordinating project teams of other business professionals, including accountants, lawyers and PR consultants
Essential Skills and Qualities
In investment banking, employers usually require you to demonstrate commercial awareness and a knowledge of financial markets and sectors. You will also need to possess the following:
- Strong numerical and analytical skills – usually backed up by a relevant degree
- Excellent teamwork and leadership skills
- Effective communication and interpersonal skills
- The ability to manage time effectively
- The self-confidence and decisiveness to make difficult decisions
- The ability to work within a stressful environment and remain calm under pressure
Working Hours and Conditions
The demands on investment bankers – especially for the first few years of your career – are notoriously high. Hours are often long and unsociable, and it is not uncommon to work 15-hour days (including weekends), especially during the critical stages of a deal. While the financial rewards can be great as you progress up the ladder, it’s worth bearing in mind that corporate banking requires a lot of commitment and personal sacrifice.
For corporate investment bankers, the average starting salary is around £35,000 ($48,720), reflecting the longer hours put in. After around three years of experience, salaries can reach the £50,000 ($69,600) mark, while those with significant experience can easily earn six-figure base salaries. The majority of an investment banker’s income is through performance-related bonuses, though; these can be as much as four times the base salary, with exceptional performers earning even more.
2. Get the Qualifications
In the UK, most banks offer graduate recruitment programmes. Although a finance-related degree is not a requisite, courses such as economics, business studies or mathematics may increase your chances of getting hired, while you should be realistically looking at a minimum of a 2:1 due to the competition for places.
In the US, the criteria are essentially the same, although, again, due to the fierce competition for places, it is advisable to complement your existing education with a relevant postgraduate degree. Investopedia highly recommends that potential candidates obtain an MBA before applying, too.
3. Land Your First Job
As mentioned, banking is a hugely competitive sector to break into. It is vital to gain industry experience and, as a result, most applicants complete an internship towards the end of their degree.
Even if this doesn’t directly result in a permanent role, it is still a good opportunity to build a network of contacts; indeed, networking is a hugely important driving factor within the banking industry. Make an impression on as many people as you can, and demonstrate your commitment and suitability for a role when applying for jobs.
Many of the top investment banks are multinational; some of the most sought-after roles are at:
- Bank of America Merrill Lynch
- Barclays Investment Bank
- Credit Suisse
- Deutsche Bank
- Goldman Sachs
- JPMorgan Chase
- Morgan Stanley
4. Develop Your Career
The opportunities to progress in investment banking are plentiful, although the size of your employer may dictate this. For example, larger banks may offer exposure to more exciting opportunities, but smaller banks may offer less competition for promotion. Also, consider the specialisms of each institution; some have better track records in certain areas, and if you want to progress in a particular field, this can significantly enhance your prospects.
Most graduates start in analyst roles before progressing into client-facing positions. Exceptional individuals who can demonstrate strong leadership qualities and judgement capabilities can then progress into more executive roles, usually after around 10-15 years. High-performing individuals are often headhunted by competitors or firms in related industries, with banks paying out enormous financial incentives in order to persuade them to leave or stay.
Due to the multinational nature of banking, there is also the opportunity very early on in your career to work abroad. Indeed, as your career progresses, overseas travel is requisite; this will typically be to the world’s main financial hubs such as London, New York, Frankfurt, Singapore, Paris, Tokyo and Abu Dhabi.
Additionally, it is worth noting that the industry as a whole is heavily regulated. In the UK, investment bankers are required by law to complete Financial Conduct Authority (FCA) exams, as well as obtain additional continuous qualifications through the Chartered Institute for Securities & Investment (CISI). In the US, investment bankers are required to complete the Investment Banking Representative Exam (IB), better known as the ‘Series 79’ and administered by the Financial Industry Regulatory Authority (FINRA).