Investment banks arrange financing for private companies. Investment bankers are responsible for matching businesses that require financing with investors who are willing to provide capital in exchange for bonds or stock. Generally all investment bankers pursue advanced education and receive specialized training in the field. There is stiff competition for investment banking jobs, but those who are successful tend to enjoy high salaries and comprehensive benefits.
Depending on the client's situation, an investment banker's duties vary. They sometimes act as sales agents for their clients. They advise companies on their financing options, such as issuing stock or bonds, and find buyers for the securities. When clients wish to arrange large financial transactions, such as a merger, acquisition or sale of a subsidy, an investment banker may negotiate the deal. Investment bankers also consult when companies are experiencing financial difficulties, and attempt to find solutions. If clients decide to offer new stock, investment bankers may arrange for their bank to underwrite the stock, so the client will not have to assume financial liability. In addition, investment bankers may oversee their clients' investments.
Most investment bankers earn a master's degree in business administration (MBA). Those who enter the field without an MBA generally have a bachelor's degree in finance, business, economics or accounting, and begin as analysts with an investment bank. They receive training on the job, during which they have limited interaction with clients and instead focus their efforts on creating information books that are used to sell products to clients. Training also includes instruction in the specific products and services that the bank offers, effective sales techniques and securities analysis. Most analysts work toward an MBA while employed if they plan to stay in the field. After several years, analysts either receive a promotion to associate or are let go. Candidates who already have MBAs usually begin as associates.
Most investment bankers work in comfortable offices, though the environment is often quite stressful. They usually work long hours, including nights and weekends, and face extreme pressure as they try to negotiate mergers, acquisitions and corporate financing. Many investment banks have a large number of international clients, so investment bankers are often required to travel around the world. Bankers at the junior level usually face the greatest pressure as the job tends to become more manageable with experience.
According to the Pay Scale, a salary information website, the median salary for associate investment bankers with less than a year of experience ranged from $47,778 to $96,102 as of May 2010. Those with one to four years of experience were paid between $57,617 and $96,682, while those with five to nine years earned between $69,855 and $101,636. Associate investment bankers with 10 to 19 years of experience earned as much as $106,283.
The Bureau of Labor Statistics estimates that employment for securities, commodities and financial services sales agents, including investment bankers, will increase by nine percent between 2008 and 2018, which is the same rate as the average for all occupations.Recent global financial problems coupled with industry consolidation will be the most significant factors in limiting job growth. Investment bankers may face sharp competition as jobs dwindle, so those with MBAs will enjoy the best prospects.
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