Most businesses are always looking to hire new talent. Investment banking may not feature high on most people’s career priorities, given that the general public only interacts with the banking industry for small business endeavors like opening personal checking accounts.
Investment banking offers some high-reward career opportunities. Remunerations are usually more than the average salary of most careers. However, it is the fulfillment and sense of accomplishment you feel that is truly rewarding.
Unlike many careers, choosing to go into investment banking is not straightforward. For one, there is no specific college degree program for investment banking. This means that if you choose this career path then other credentials may become necessary. People with a background in finance, mathematics, and economics have a slight edge in this field. Like most career paths, hard work is critical to your long-term success.
What Is Investment Banking?
In short, investment banks act as a go-between for financial institutions like commercial banks and other entities like government or corporations. Sometimes, private individuals of great means can also seek the services of investment bankers to help find lucrative investment opportunities.
What Does An Investment Bank Do?
With so many other professionals in this industry, it can be confusing to differentiate between the different roles and job descriptions. An investment banker plays the following roles:
- i) Finding new investment opportunities and pitching such ideas to new and existing clients.
Most people forget that investment bankers are salespeople, albeit at a much higher level. Strong communication and persuasion skills are essential for carrying out their duties. Investment bankers develop a wide network and reach out to them with business opportunities.
- ii) Analyzing financial data related to the markets
Investment bankers are always looking for new ways to secure more profits for their clients. This involves analysis of large amounts of financial data and keeping abreast of financial market trends in order to correctly price and value wealth instruments like stocks.
- ii) Presenting critical financial information to their clients
The volatile nature of the financial markets is that time-sensitive information may require immediate action. Investment bankers are at the forefront of this decision-making process. Once an investment banker assesses the potential rewards and pitfalls of a particular financial move, he will present his findings to the ultimate decision-makers. These decision-makers may be clients or his superiors at his firm. This presentation of critical information also enables the investment banker to advise the client and course-correct when necessary.
- iv) Raising capital for clients
Investment bankers are sometimes tasked with creating investment capital for their clients. This raising of capital may involve issuing of securities like equity or debt.
Differences Between An Investment banker And An Investment Banking Analyst
To those less knowledgeable about the financial industry, the difference between investment bankers and investment analysts may be a little less clear.
A vast majority of investment bankers start as investment analysts. Later on, they may get promoted up the corporate ladder. The ease with which an investment analyst becomes an investment banker depends on several factors, including education and experience. A novice with a college degree in finance or economics is more likely to be promoted within a short period than, say, a junior with a degree in history.
Mergers and acquisitions (M&A) constitute a considerable amount of business for most investment banks. These big deals can become complicated and tricky; require great focus. An investment banker provides investment advice to clients and helps to right the ship when a merger seems to go wrong.
Getting Started
Assuming you’re a complete beginner, start by earning a college degree in mathematics, finance, or accounting. Any one of those degree courses will give you a push in the right direction.
It is possible to become a highly successful investment banker with a degree in other areas of study; however, you will have to market your skills more aggressively.
Internships
Internship opportunities are a great way to get a good job in this industry. Such opportunities can lead to permanent employment. In addition to remuneration, an internship at an investment bank can be a great way to network and build relationships. Such relationships become vital in advancing your professional career.
Certifications
Some certificates can help bolster your resume, even with limited job experience. An accredited investment management course can help to improve your resume while helping to solidify your investment knowledge. Such accredited certificates are very helpful for those without a solid background in finance, economics, or accounting.
