Investment Banker

A passion for finance is key in the investment banking industry. It’s a role for ambitious individuals, keen to take a risk and work well with a diverse range of people. Investment banking can be exciting and provides promising prospects overall for career development and future success.

Corporate finance jobs are an opportunity to discover the banking world and become an expert in the field.

What is an investment banker?

An investment banker’s role is to help businesses raise funds for expansion and wealthy people to invest their money better. Essentially, you are an advisor for money, informing them whether to invest in a business project or use their money elsewhere. The clientele of investment bankers ranges from rich people, searching for investment opportunities or large companies. Your goal is to create projects for succession and gain more money back than originally invested. You may also work on raising capital, and identifying and securing new deals.

Another example is when a business attempts to take over or merge with another company. You would examine the proposal and ensure that the client profits from the deal. It’s all about maximising the best out of deals for various clients.

• Mergers and Acquisitions (M&A): These specialise in providing strategic advice for companies or individuals when they either merge with a competitor or acquire a smaller film.
• Proprietary trading: This is when banks trade on their account to generate in-house profit. Proprietary traders help prevent exposing the bank to dangerous risk levels, by taking an analytical stance and looking after the profit.

Responsibilities

An investment banker has a range of different responsibilities, and they involve:

• Examining a deal’s potential, using financial models to map out outcomes.
• Negotiating details of a potential deal and liaising with other team members.
• Identify new business opportunities for a range of clients.
• Work with project teams in a deal to acquire specialist information and input.
• Research the market and its developments.
• Collaborate with chief executives of large organisations.
• Carry out financial plans and present solutions to clients.
• Collaborate with other professionals including lawyers, PR consultants and accountants.
• Analyse different types of numerical data and share results with clients.

Salary

The salary of an investment banker can range depending on location and experience. On average, the annual investment banker salary for entry-level is £40,000. For those with several more years of experience, around 1-4 can expect to earn about £48,000. Expert investment bankers with 5-9 years of experience average around £72,000, and over 10 years, the banker salary can see you earning £93,000+^[1].

Qualifications

Investment banking is a graduate career and requires at least a 2:1 degree with a strong academic performance throughout your education. Graduates with various degrees are considered to enter this profession, although, certain subjects will provide more of an advantage. For example, mathematics degrees, accounting degrees and finance degrees, business management degrees and economics degrees.

Postgraduate degrees, however, aren’t essential, although could come in handy to set you apart from your competition. You can consider many relevant subjects including the Master of Business Administration (MBA). It’s an advantage in terms of in-depth knowledge, insight and higher-level qualifications but isn’t a guaranteed route into investment banking jobs. Competition is fierce in the investment banking world - and the more qualifications and experience, the higher your chances are for succession.

Training and development

As a trainee investment banker entering the corporate investment banking world, the company offers induction programmes. Senior professionals and industry experts lead these programmes and provide an overview of the sector. They’ll cover various areas including economic, financial modelling, accounting, capital markets and more. These programmes aim to bring together all new trainees and start your training off on a good note.

Training through the development of your role can involve in-house courses and seminars to gain further insight. Some employers require further qualifications and can request you study them as part of your role. The Chartered Insititute for Securities & Investment (CISI) has many qualifications, approved by the FSA.

Your employer can advise on the further studies you can take and invest in depending on your career goals and your current level in the job. Corporate investment banking has plenty of continuing professional development() (CPD) opportunities.

Skills

As an investment banker, skills can vary from numerical to working with others. These are the top skills to show:

• Strong numerical and analytical skills.
• Ambitious, energetic and committed to the role.
• Works well within a team and is confident as a leader.
• Excellent communication and interpersonal skills.
• Calm at working under pressure and dealing with stressful situations.
• Great ability at project and time management.
• Self-confident when making difficult decisions.
• Great at problem-solving and adapting to new changes.
• Knowledge and insight into financial markets.

Work experience

Industry experience is essential as an investment banker before applying to the role. With the selection of summer corporate finance internships and voluntary experience available, you can easily find the right work experience. Many placements showcase the realities of an investment banker role and teach you an insight into the industry.

Internships typically take place in the summer and can last between 10 to 12 weeks, an ideal time to use during your summer holidays at university. It’s crucial to secure your internship as soon as possible to give you time to be accepted before the summer. These programmes are offered at an analyst level to students in their penultimate (second to last) year of their undergraduate degree or postgraduate degree. Taking part in an internship can sometimes lead to temporary or permanent employment. There are also shorter internships available during springtime, applicable for students in the first year of their degree.

Other work experience is valuable. You can work in your local bank or similar organisation of your choice to learn more about the industry, help you build a network of contacts and show your commitment to working in the industry. This can be done through part-time banking jobs or holiday work - as it shows employers your determination.

Career prospects

The prospects of an investment banker are endless. Usually, the first two to three years after as a graduate investment banker are spent in a corporate finance analyst role before progressing into an associate. Associates are the higher level who manage a team of analysts. If you have an MBA, there is the possibility to go straight into an associate banker role after you graduate. Analysts head on a steep learning curve to progress and demonstrate more than analytical skills. They need to have strong leadership potential, an understanding of client motivation and much more.

With an additional three years under your belt, the next step up is vice present (VP), which manages the day-to-day work of both the associates and analysts. You will also be in more contact with regular clients and may even have your own. Further up the progression chain are the director, executive director and managing director positions. Although, reaching these ranks can be quite difficult and only exceptional graduates can receive one of these higher positions within 10 years of graduating.

Being promoted within this industry is tricky, however, high performance is rewarded. Good bonuses, potentially being headhunters, and internal recognition is all common practices within the banks. It’s likely too many individuals or teams can be poached by other banks.