The life of an investment banker looks glamourous from the outside.
The mental persona of an investment banker – wearing a well-fitting suit, walking on the floor of a stock exchange, crunching numbers, and convincing businessmen and high-net worth individuals to invest their hard-earned money, looks unenviable.
As much as the job of an investment banker looks glamorous, it is challenging and stressful — meeting profit targets, convincing clients, researching and proposing good investment deals – an investment banker does a lot.
Andrew Gutman, Author of ‘How to be an investment banker: Recruiting, interviewing, and Landing the job’ says, typical investment banking associate or analyst can expect to spend 90-100 hours on work in a week. A typical day ranges between 10:00 AM to 2:00 PM.
Investment banks pay handsome packages to bankers. At an entry-level, the salary of an investment banker could reach to $107, 334 per annum. This is more than the salary of any job across the BFSI sector. That alone, however, shouldn’t be a criterion for choosing a career in investment banking. Apart from excelling in finance and strong analytical aptitude, investment bankers need to be capable of working under stressful times.
It, therefore, requires more to be an investment banker than thought, which is usually strong finance knowledge, negotiation skills, and interpersonal skills. Investment banks hire for investment banking positions from a wide array of background including MBA, finance, economics, mathematics, etc. Certified investment bankers, irrespective of their background can find well-paying opportunities in the industry.
What do investment bankers do in a day?
A day in the life of an investment banker can be summarized as —
- Perform extensive research on trends and develop financial projections
- Create promising research reports and provide investment recommendations to clients
- Build financial models to predict debt and raise capital
- Build relations with new clients and grow existing relations
- Pitch clients with profitable investment opportunities
- Facilitate M& A and IPO for client organizations.
What skills do investment bankers need?
To deliver to the expectations of an investment bank, an investment banker must have–
1. Strong knowledge of capital market, corporate finance, accounting, and related skills.
2. Strong interpersonal and communication skills
Proficiency in working with spreadsheets and building financial models, specifically, three statement model, DFC model, M&A model, LBO model, and more.
4. Ability to prioritize work under tight deadlines
5. Ability to perform under pressure.
6. Result-oriented and growth driven mindset.
7. Presentable and charming personality
A career in investment banking is exciting. Compared to any career in finance, it witnesses more highs and lows. So anyone looking forward to making a career in investment banking should be ready to tackle this challenge. On the bright side, they enjoy sponsored international family vacations. Luxurious stay, five-star food, and other sumptuous perks for visiting clients.
Growth in investment banking
Growth in investment banking is steep. After 2-3 years’ experience, junior investment bankers are promoted to senior Associates, and further, 1-2 years’ experience can be become partners.
Further, 1-2 years’ experience in investment banking leads to becoming vice president.
After 5-6 years’ experience, investment bankers can start their own firms or go for consulting.