Investment Banker Career Information
An investment banker is responsible for raising capital and equity for corporations. Many college graduates with an emphasis in finance and MBA students choose to enter the investment banking industry as their first job. The profession is typically very lucrative but also requires an intense commitment to work. In fact, investment bankers often report working in excess of 70 hours per week. As a result, many recent graduates and other people employed in the profession simply do not last. That being said, investment banks and corporations are constantly hiring investment bankers who possess the quantitative abilities and work ethic to thrive.
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Job Duties
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Since the investment banker position covers numerous facets of finance, there are many different job duties the position is responsible for. An investment banker must provide mergers and acquisitions advice for the buyer and seller. Furthermore, using stochastic calculus and other advanced mathematical models, the investment banker must be an expert in derivatives and convey their expertise to clients. In addition, the position requires valuations and intensive analysis to be performed on various companies. Depending on an investment banker's level in the firm, a fair amount of spreadsheet work will also be expected.
Salary
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Although being an investment banker requires an incredible amount of work, the pay is well worth it for many people. According to PayScale.com, an entry-level investment banker can expect to earn between $40,000 and $95,000 a year, based on the school they went to and general experience. An investment banker that has five to nine years of experience will earn between $70,000 and $100,000 per year. Finally, an investment banker with 10 or more years experience has the potential to earn more than $100,000 annually.
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Education
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Investment banks and other financial institutions typically look to fill their investment banker positions with recent MBA graduates. Specifically, they are looking for MBA graduates who have experience as an analyst or a background in finance, economics or accounting. However, candidates only possessing an undergraduate degree may still be considered if their academic credentials are impeccable and their major had a strong focus in quantitative models and processes. Certifications such as CFA (Certified Financial Analyst) can also be a boost to candidates.
Top Firms
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The most competitive investment banking positions are located within the top banking firms. Landing a job as an investment banker at a prestigious financial institution all but guarantees a lucrative base salary, significant bonuses and an impressive resume filler. The majority of the top firms in the U.S. are located in New York City. Some of the most highly respected firms include Goldman Sachs & Co., J.P. Morgan & Co., Citigroup, UBS, Credit Suisse, Morgan Stanley, Bank of America, Barclays Capital and Deutsche Bank.
Considerations
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An investment banker's work/life balance can be highly skewed to the work side. This is especially true for entry-level investment banker analysts or associates. Therefore, candidates should be prepared to work more than 70 hours a week when they begin their career in investment banking. Unsurprisingly, investment banking is not for everyone. Many highly capable employees simply get tired of working long hours and doing the "leg work" for their boss. Thus, a career in investment banking should be carefully considered and weighed against the personal and social goals of an individual.
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References
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