How To Start an Investment Banking Career in 4 Steps
By Indeed Editorial Team
Updated November 5, 2022
Published October 18, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
If you have professional interests in finance and helping clients raise capital, you can consider a career in investment banking. This field offers job opportunities for professionals with diverse qualifications, especially as more start-ups and established companies explore investment options. Learning how to start a career in investment banking can help you determine whether this field suits you and plan your career. In this article, we outline the steps for starting an investment banking career, list available jobs in investment banking, present essential skills, and discuss responses to helpful questions about investment banking.
What is an investment banking career?
An investment banking career involves providing financial services to organizations looking to raise capital for operations. Whether as an investment banker, analyst, associate, or representative, there are various careers in investment banking to explore. Investment banking also involves helping organizations handle mergers and acquisitions and providing financial advisory services. This field can be rewarding because it involves positively impacting a company's ability to create capital.
How to start an investment banking career
If a career in investment banking excites you, follow these steps to get started in the field:
1. Earn a bachelor's degree or a diploma
Completing a degree or diploma is typically the first step to start a career in investment banking. Majors to consider include business, finance, accounting, and economics. Seeking formal education can help you learn how to provide financial services effectively. Regardless of the university or college program you choose, consider taking statistics, finance, and calculus courses because the concepts taught can help you prepare for various investment banking roles. For example, a risk analyst typically applies various statistical modelling techniques.
2. Gain professional experience in investment banking
You can complete an internship to learn more about your preferred role in investment banking. Becoming an intern can also help you learn the skills of successful investment banking professionals. For example, you may learn how to assess investment portfolios and analyze assets as an intern. The professional connections you build during your internship can also help you secure a job after graduation. Aside from internships, you can also consider training programs and earn certifications in financial modelling, wealth management, or investment banking.
3. Consider registering with the IIROC
The Investment Industry Regulatory Organization of Canada (IIROC) regulates companies that provide financial advice and trade securities. If your desired role involves performing these duties, you can consider registering with this professional organization. Employers may see you as a more valuable candidate if you register with the IIROC because the organization evaluates your background in finance and trading securities.
4. Network and consider advanced degrees
Once you develop useful skills and gain practical experience, you can start looking for investment banking job opportunities. You may join professional organizations related to your investment banking role. For example, if you want to become an investment banker, you can consider the Canadian Bankers Association (CBA). Joining a professional organization can help you network with other investment banking professionals. You can also attend graduate school and earn relevant degrees, such as a Master of Science in Finance. Engaging in continuing learn can help prepare you for senior roles in investment banking, such as chief financial officer (CFO).
5. investment banking jobs can you get
There are several possible career paths in this field, each with different skills and responsibilities. Here are five jobs with details on their duties and salaries to consider in investment banking:
National average salary: $30.38 per hour
Primary duties: An investment banker helps corporate entities raise money in capital markets. They offer advisory services to clients and provide guidance on mergers and acquisitions. Investment bankers develop different financial models and recommendations for product offerings, private equity transactions, and valuations. They also prepare and review investment memoranda and management presentations.
Read more: How Much Do Investment Bankers Make?
National average salary: $82,849 per year
Primary duties: An investment banking analyst evaluates financial data and assists clients in creating portfolios. As entry-level professionals, they create and revise presentations, provide market updates to clients, and assist in valuation calculations. Investment banking analysts also complete administrative tasks and may work on financial models.
National average salary: $61,345 per year
Primary duties: An investment underwriter helps a company determine the price of shares, called initial public offerings (IPO). They contact investors to evaluate public interests in investing in a company. Doing this helps them predict the company's stock performance and evaluate its worth. Investment underwriters ensure investors purchase shares at a set price.
National average salary: $93,668 per year
Primary duties: Mergers and acquisitions managers evaluate an organization's opportunities for mergers and acquisitions, then oversee these changes. They perform due diligence, financial planning, scoping, closing, and integration for an organization. Mergers and acquisition managers also develop financial models to estimate cash flow and determine the potential for profitability. Depending on where they work, they may take part in negotiating mergers and acquisitions.
National average salary: $64,178 per year
Primary duties: An investment advisor recommends investment opportunities for clients. By managing a client's assets and evaluating written publications, they help clients make informed investment decisions. Investment advisors also analyze securities and present reports of their findings to clients.
Skills to succeed in investment banking
Here are some of the most important skills you can develop that apply to investment banking roles:
In investment banking, you typically analyze data, marketing trends, and product offerings. By developing good critical thinking skills, you can evaluate investment opportunities objectively and act based on your findings. Applying critical thinking skills involves asking thoughtful questions about investment opportunities.
Communication is the ability to exchange information with others. When working in investment banking, you can expect to communicate with clients, explain financial models to executives through reports, and recommend investment opportunities. Developing excellent written and communication skills can help you convey investment opportunities to stakeholders accurately.
As an investment banking professional, you want to follow all applicable regulations and find creative ways to solve challenges. For example, suppose you're an investment underwriter. You'd want to follow financial laws on determining prices for a company's shares and also help it remain productive. Applying your innovative thinking skills can help you develop new solutions or ideas.
Throughout your career in investment banking, you can expect to work as part of a financial team. For example, you may collaborate with bankers, risk analysts, and directors to prepare reports. Developing and showing teamwork skills can help you thrive in collaborative work environments.
Attention to detail
Handling financial records typically requires you to be detail-oriented. For example, showing attention to detail can help you identify investment opportunities, risks in market trends, or issues with loan options secured. You can improve your attention to detail by engaging in tasks that require focus, such as completing puzzles.
Financial literacy refers to the ability to understand and use various financial concepts, such as financial management, budgeting, and investing. As investment banking is an aspect of finance, this skill is important for providing investment services. You can improve financial literacy by completing online courses, workshops, and training programs in finance.
FAQs about working in investment banking
Here are useful answers to questions about getting an investment banking position:
What are the types of investment banking?
There are two primary types of investment banking to consider:
Industry coverage: involves working in groups to cover specific market sectors or industries. A managing director oversees the industry coverage team and stays current with news, trends, and competitors.
Corporate finance: involves helping clients find funding for new or ongoing operations. Professionals identify opportunities for companies to gain capital by analyzing equity, stocks, and bonds.
Where does a professional in investment banking work?
Investment banking professionals can work in various settings. Aside from investment banks, they may work in hedge funds, asset management firms, and commercial banks. In these professional environments, they may work as employees or independently as contractors.
What is the difference between investment banking and wealth management?
Those with investment banking careers focus on providing investment opportunities, financial services and advice to companies. In comparison, wealth management focuses on providing financial services primarily to individuals, especially those with a high net worth. Many companies provide investment banking and wealth management services.
Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organization and a candidate's experience, academic background, and location. Please note that none of the companies, institutions or organizations mentioned in this article are affiliated with Indeed.
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