Compared to other professions, an investment banker's role is considered the most reputed one, even though you will get several opportunities to be placed in this profession according to your desired posts in the banking sector, which is financially lucrative.
But still, investment banking is one of the toughest and most daunting career paths to choose from, for its stressful environment and long-duration work schedule. For banking associates or analysts in investment banks, 80-100 hours of work duration within a week is not exceptional.
There is still a bit of uncertainty and no clear idea of investment banking. Many people have certainly heard about the term "investment banking" but don't have such a great understanding of the details regarding this.
In the financial markets, investment bankers give several ideas to the government and corporations instead of personally engaging with individual investors.
They do so. Investment bankers are helping their customers secure funding in capital markets, offer numerous financial consultation services, and enable convergence and acquisition.
In this article, we will simplify investment banking and explainhow to become an investment banker. Why should you go for investment banking? The job role of an investment banking analyst! And what are the most important skills in investment banking?
What is investment banking?
Investment banking is a separate sector that facilitates acquiring, distributing, and providing financial advisory services to people or organizations.
They play an intermediary role among investors and security issuers to promote the publication of new entities. Therefore, they can purchase all available shares from their advisors at an approximate cost. On behalf of an issuer, try to resell them towards the public.
Investment banking is one of the world's most dynamic finance processes.
They handle multiple objectives and firms, financial services, for example, private equity or trade securities, a consultant on acquisitions and mergers involving the assistance for M&A organizations; leveraged finances involving the borrowing of capital to entities and investments; redefinition involving the enhancement of frameworks for companies to make business more competitive and profitable.
Moreover, it supports increasing revenues and emerging problems or IPOs that support new firms going public through banks.
How to become an investment banker?
It is not easy to enter investment banking, and the approval rating for large companies is 4%, reflecting the degree of prominent MBA courses.
But you can enter this field and begin your career path through dedication and appropriate skills. There are several steps you need to follow to become an investment banker, including,
• Build decent capabilities:
You will get the opportunity to stand as an applicant for the investment banker's post if you successfully hold a degree or MBA credential. Hiring managers will realize you have real-world business experience and acquired knowledge to become an investment banker.
To become an ideal investment banker, each applicant needs leadership skills, creative attitudes, analytical abilities, networking abilities, and global and entrepreneurial thinking.
• Prepare yourself to pursue the requisite knowledge:
In addition to your MBA degree in business, you might have to take rigorous investment banking examinations, including the Standardized Investment Advisor Law Exam and the Investment Banking Delegate Examination. When you reach an interview, ask the hiring experts which abilities they are obtaining.
• Internship in an investment banking company:
You will undoubtedly have the chance to do an internship during your MBA. Choosing an investment banking corporation will suit you, whether you want to become an investment banker.
Practical experience and knowledge from direct firms would provide you with a valuable edge in the hiring phase.
• Networking abilities:
Networking is crucial in every sector and is still an excellent starting point when you want to serve specific sectors.
Ensure that your LinkedIn profile is updated completely and that you attend as many networking activities in reality or virtually as needed. It's the perfect path to make significant attachments.
Why investment banking?
There are many reasons behind choosing investment banking as a career, such as,
• Research on assessment and financial modelling
Investment banking includes the chance to become a professional at the early stages of your career, creating big, complicated economic projections.
Although banking companies aren't inherently major investors, they only deal with time-leveraging work, which will be a perfect path to begin your job life.
• Visibility of high-amount transactions
Any banking department will be extremely confidential before it gets public, and it is generally on the front line of the business segment when it is revealed.
If you tell anything in this sense, the interviewer's morale will possibly be hit, and it is quite persuasive that the sector should be targeted.
• A severe complexity and a good gradient for researching
Whenever you admit that IB needs incredibly long shifts and inspires you throughout the task, it would make you an interesting career seeker.
It is important to compare your career as a competitive competitor, a performer, or even a very complicated issue.
Investment banking analyst
Investment banking analysts greatly assist clients and investment bankers as entry-level specialists when dealing with assessments, debt and equity proposals, preferred shares, mergers and acquisitions, securitized transactions, and corporate consulting service Investments.
They construct economic projections and interpret diligence, reporting, and testing.
• Industry research review
Investment banking analysts are typically classified into business divisions: infrastructure, output, developing markets, and investment.
They will meet with management and investors to create arguments for or against acquisitions in particular businesses or sectors.
• Establish models for financial assessment
A strong service with virtual figures and investment prototypes is crucial for an investment analyst.
The latest analysts will watch financial patterns, different industries, and sales and calculate the output on highly challenging international financial markets and larger concentrations.
• Create online as well as off-line fund presentation
A successful communicator is considered to be a new investment banking analyst for the audience of both retailers and organizations.
The core work of banking analysts is to study, survey, prepare and update research reports, progress sheets, presentation slides, and information sheets.
Rapid and arbitrary time frames for processing these documents are equivalent to an investment bank analyst's regular activities.
Investment banking skills?
Become an ideal investment banker requires a few basic skills those are,
• The ability of Innovative thinking
Banking investors enjoy creativity. In the interview, hiring managers search for candidates willing to supply the organization with fresh thoughts and unique experiences.
Also, to a degree, you would be an advantage to the bank if you could find innovative ways to develop a method or proposals for expansion.
• Analytically thinking ability
Can you excel under pressure to turn your mind quickly over new knowledge or a new idea to implement? This type of ability hiring managers usually assume to be 'analytical thinkers' to assess.
• Intellectuality
That may be the most apparent attribute. Broad knowledge and special attention to analytics, statistics, accounting, and finance contribute to various employments.
• Perseverance and resilience
In investment banking, perseverance and resilience are essential skills to develop. There will certainly be high intensity, heavy workload, strict deadlines, serious risks, and long working hours in investment banks.
The willingness to recover whenever times get difficult is necessary for good investment banking with significant individual resilience and perseverance.
• Efficiency in fluent communication
If you work for a company as a back or front office manager, you must have the skills to succeed in an investment bank! The huge hurdle of working in banking is that you must always reassure audiences who do not share your optimism or appreciation of the prospects, IPOs, or detailed data on the financial markets about complicated economic facts.
• Build relationships
This last ability is probably the most elusive but is considered of supreme importance, specifically when investment bankers are gradually promoted in their careers.
Communication qualities and social and behavioural qualities, such as possessing a high intensity and constructive personality and a personality of "I appreciate your concerns," establishing and sustaining consumer relationships, are attributes that bankers must embody to excel.
What do investment bankers do?
In simple terms, we sometimes need advisors to maintain or balance our finances. Now, these advisors are represented as investment bankers.
The primary role of investment bankers is to provide advice regarding financial investment and guide people on ways to raise money in these competitive markets. Moreover, they also focus on increasing the revenue for the desired task they have undertaken.
Most traditional banks venture into investment banking while leading Barclay ventures into global markets through such proposals, where the analysts and bankers devise an algorithm to deliver the highest profitability to the investors.
The area requires a wide knowledge of global economic procedures and markets. It is a financial advisory offered to high-net-worth individuals to enable them to sustain financial growth, and companies can borrow money to invest through such banks to get lucrative returns, which can be offered to others for a hefty markup.
These firms may buy loans from German units to sell to Russians and forecast areas with the highest prospective growth.
They need to follow regulations to prevent information from passing, as happened during the financial crisis where the US financial watchdogs found the Goldman Sachs head had misled buyers to invest in poor options.
Deutsche Bank and Barclay were institutions that started their business in the area from scratch, and Goldman and Morgan Stanley were only about such funds. Since the crisis, these firms lost authority, and politicians proposed to split it to restrict the loss of clients caused by their risky ventures.
What is the salary of investment bankers?
Among all the professionals who are highly paid, investment bankers are one of them. To provide detailed information, if you start your career as an investment banker, you can at least expect $100,000 initially.
However, another process of the salary of an investment banker is on an hourly basis. However, in this case, the payment is not that high. Therefore, most investment bankers prefer to use the monthly salary.
If you are wondering why investment bankers are highly paid, they deal with investments and transactions that are quite risky.
In the UK, an independent body handles the procedure of splitting.
Even Credit Suisse, one of UBS's biggest rivals, faced the blow of crisis and required a rescue package following the 2008 downturn.
Many of these are investment banks in London that are too large, have grown unmanageable, and have faced criticism.
There are many positions for a banker in investment banks in London that do not hold customer deposits but buy and sell securities on behalf of their customers. The job requires an understanding of global factors that can influence markets.
These offer alternative investment opportunities in the UK and play a significant role in helping institutions get capital.
Many companies want to issue bonds, and they do it through firms that help to conduct acquisition or stock buyback, manage capital, and make contact with partners looking for capital or gain through investment in the exchange.
Previously, firms hired people who had studied in top management schools and those who appeared smart outwardly with the right presentation, looks, and behaviour. Still, these days, such roles are handled by people who can deliver maximum profits through their ideas since securing clients by delivering the highest for their money is very important.
Most organizations require a basic degree in management; other subjects that are part of the job are economics, mathematics, accounting, and computer science.
Even those with law school degrees get to work in these areas where legal aspects of investments are scrutinized. Since the work is related to numbers and calculations, the person should quickly handle statistics, data and figures collected from multiple sources.
The job requires 80 to 100 hours a week, and one may not get many holidays. Earnings can be lucrative if one can prove one's competence in the field.
Is investment banking worth it?
We have already been aware that investment banking is among the highest-paid jobs. You can even start your career with a prestigious salary if you have the desired qualifications.
But, along with the high salary, there are complicated challenges that you are bound to face. They have to dedicate a maximum amount of time to their profession.
For example, you might sometimes have to spend 100 hours per week. As the task is related to finance, higher transactions are involved. Hence, the pressure is also quite high. You might face constant work pressure to meet the deadlines given by your organization or company.
Therefore, if you are eager to work long hours dedicatedly, this can be an excellent job. People in this profession will admire you for the task you are doing.
People here do not notice the time while doing the task. And if you are a reliable banker, you will be given more workloads that are tough to manage.
To describe the work environment, it is simply very tiring. People working here are sleep-deprived, and leads to various health issues. To overcome the work pressure and busy schedule, most employees use alcohol, caffeine, etc., to get out of the stress.
Now, if you are the one who can handle work, pressure can surely go for this profession as the salary is maximum in this case.
But if you need a cushy job where you can easily create a proper balance between your personal and work life, then investment banking is not the right place.
Sales and trading vs. investment banking
Well, investment banking can differ from sales and trades in various aspects. The primary thing they differ is the type of work and the time needed to complete it.
Investment bankers work as advisors for their clients to help them grow their finances in the capital market. The duration of investment bankers' work is not limited to hours; they work for months and years, so they get the desired salary for the dedicated work.
On the other hand, the traders and sales function on deals, thereby entertaining their clients. Here, the time required to complete a transaction is quite less when compared to investment banking.
The lifestyle is another important aspect that differs from investment banking, sales, and trades. In the investment bank, the trading and sales professional is the foremost in and out.
The trades and sales professionals begin with a field job to keep pace with the market standards. Another added benefit is they do not work on weekends. On the contrary, investment bankers have in-house jobs.
But the work pressure is quite high when compared to sales and trades. They have to work even on weekends and some holidays as well. The work for investment banking is always never-ending as the sector is finance.
Hence, the workload is maximum. However, the sales professional also has pressure or target work, which is relatively low compared to investment banking.
What degree do you need to be an investment banker?
In the lucrative finance field, investing in a banking job is a good way to flourish your career. When starting an investment banker job, you will likely get a six-figure salary that is quite satisfying or worthy.
Therefore, this position's eligibility involves a combination of skill, hard work, education, experience, etc. Here are some tips that will help you know about the degree required to become a successful banker. Hence, take a look below:
Obtain a college degree
You will need a college degree in economics or finance to make yourself eligible to apply for an investment banker position. Another degree that could help you is a degree in business and accounting. So, it would be best to start with a college degree.
Graduate from top schools
Most of the companies and organizations that are well-reputed prefer hiring candidates from top universities. However, this does not mean you cannot have a good career if you cannot afford to be admitted to highly reputed universities.
All you need to do is select the right degree and school. If you can maintain a standard grade, you are good to go to an established organization. Therefore, no matter which college you choose, having good grades will grab the attention of the one hiring.
Besides, these two are also other ways by which you can be an investment banker getting an MBA certificate in finance. However, this would be an advanced degree. You can choose anyone according to your preference.
How long does it take to become an Investment Banker?
There are certain eligibility criteria that you need to complete to be an investment banker. Now, the duration of becoming an investment banker depends on the time required to attain the degree.
After completing the desired degree course, you will require at least two years of experience to get a job in a well-reputed company. However, you can grow according to their hierarchy after getting an investment banker job.
If you can perform well, there is a senior investment banker position, which is quite prestigious and well-salaried than an associate.
So, if you have the patience to stick in this sector for 3-5 years, you can become a successful investment banker without any further doubt. So, remember the hard work and pressure you will get in this profession and then proceed accordingly.
You only need dedication and a mental set-up to handle your organization's pressure. Moreover, it is needless to mention that the better you perform, the more work pressure will be provided to you. So, be prepared to give the best of yours.
Conclusion:-
Therefore, if your dream job is to get one of the highest-paid, along with an extravagant lifestyle, then you can unthinkingly choose investment banking as your career.
But, it would be best to sacrifice your personal life a little because of the stressful work environment. The challenges you will face daily in this field will make you an expert in this role.
Moreover, you will get enough opportunities to sharpen your skills and knowledge to help you grow in the long run. Working dedicatedly can also provide you with rapid growth.
Therefore, consider choosing this as your career, be accustomed to the sector's pros and cons, and proceed.
