Careers in Investment Banking

List of Top 4 Career in Investment Banking

Careers List in Investment Banking: Below mentioned are some of the Investment Banking Roles that a person can reach in his career.

Analyst
Associate
Vice President
Managing Director

Overview of Investment Banking Career

Investment Banking is a financial services company that engages in financial advisory and capital raising services to individuals, corporate, and government institutions to meet their financial needs. Unlike Commercial Banks, they do not accept deposits from the public, instead, they act as a mediator in providing underwriting and providing other financial advisory services.

Investment banks can be further classified as below :
- Bulge Bracket: Bulge Bracket refers to the large banks that serve the large corporate and government. They also provide a bouquet of services that includes banking, market-making, underwriting, and other financial products.
- Mid-Market: Mid-Market refers to the banks which focus on mid-level companies.
- Boutique Banks: Boutique investment banks are small banks that specialize in one aspect of the IB Services. They generally work on smaller deals.
They are further classified into buy-side and sell-side. Buy-Side refers to mutual funds, pension funds, hedge funds, and other large investment companies. Sell-side refers to the trading of securities for cash or underwriting of services.
The primary purpose of an investment bank is to assist the company in its Initial Public Offering acting as a book-running lead manager to the issue and help the company to go public by listing its equity on the stock exchanges.
However, there are other ancillary services like M&A, Sales and Trading, and Asset Management which plays a crucial role in an investment bank.

To make a career in investment banking, one needs to spend 3-5 yrs in a boutique investment bank and then move to a bulge bracket one. It is one of the most favored roles in the finance industry since it requires a high level of expertise and knowledge to execute a transaction. Additionally, the Investment Banking career is one of the highest-paid jobs in the financial services industry in terms of bonuses and perks.

Let us discuss the Investment Banking Career Path in Detail –

Career #1 – Analyst

Who is an Analyst?

Investment Banking Analyst prepares pitch book presentations on the companies for the senior team members required for the discussion. He is the one who has just completed his degree from college and is looking out for a Job in the IB Industry to make a career.

Analyst
Responsibilities	Responsible for updating the deal books on a periodic basis and perform industry analysis as well to complement the decision-making process.
Designation	Investment Banking Analyst
Actual Role	Is to work on large databases and presentations, prepare IM, due diligence report, etc.
Top Companies	Jp Morgan, Morgan Stanley, Goldman Sachs, Bank of America and E&Y are one of the top 5 Investment Banks in the world.
Salary	The median annual salary for an analyst will be between $80,000 to $1,00,000. This is a very broad number and can vary from bank to bank.
Demand & Supply	Highly demanded profile since it requires extensive presentation skills to prepare different types of pitches to the clients with limited data available.
Education Requirement	CFA/CPA / MBA from Tier -1 Universities with at least 2-5 Yrs of Exp.
Recommended Courses	CPA/ MBA / CFP/ CFA
Positives	Be a part of the entire deal cycle and chances to earn huge bonuses at the end of the year.
Negatives	Long working hours on building presentations and storing client data.

Career #2 – Associate

Who is the Associate?

Investment Banking Associate oversees the work done by the junior analyst and guiding him properly in the deal process. He leads the execution of the deal and is the single point of contact between the client and the investor.

Associate
Responsibilities	Responsible for checking the work done by the analyst and mentoring him with the required knowledge and expertise required for the job.
Designation	Investment Banking Associate
Actual Role	Support the vice president in the entire deal cycle and play an important role in the execution as well as he is supposed to handle a team of analyst under him.
Top Companies	Jp Morgan, Morgan Stanley, Goldman Sachs, Bank of America and E&Y are one of the top 5 Investment Banks in the world.
Salary	The median annual salary for an investment banking associate can be anywhere between $2,00,000 to $3,50,000 since it is a professional role. This is a vast number and can vary from bank to bank.
Demand & Supply	Highly knowledgeable and skilled role since it requires practical experience to execute a transaction in the firm effectively.
Education Requirement	CFA/CPA / MBA from Tier -1 Universities with at least 7-10 yrs of exp.
Recommended Courses	CFA/CPA/ MBA
Positives	Lead a team of analysts and report to the vice president.
Negatives	Long working hours and is responsible for all the work done by the junior analyst.

Career #3 – Vice President

Who is Vice President?

The Vice President leads the investment banking division in the company with a team of analysts and associates and reports to the managing director about the profit & loss account. He is the person responsible for sourcing deals from the market both in the equity and debt space and generates a good amount of revenue for the company on a periodic basis.

Vice President
Responsibilities	Responsible for business development and execution of deals.
Designation	Vice President – Investment Banking
Actual Role	To build relationships with corporates and ensure that the company gets good business from them regularly.
Top Companies	Jp Morgan, Morgan Stanley, Goldman Sachs, Bank of America and E&Y are one of the top 5 Investment Banks in the world.
Salary	The median annual salary for a general manager can be anywhere between $ 3,00,000 - $5,00,000. This is a very broad number and can vary from bank to bank.
Demand & Supply	Highly Demanded Profile in IB because the IB Division P&L is dependent upon the VP who is supposed to bring business to the company.
Education Requirement	CFA/CPA/MBA/Valuation Expert with 10-15 yrs of exp.
Recommended Courses	CFA/CPA/MBA
Positives	Leads the department and allocates work to the team members.
Negatives	The salary component is less fixed and more variable or performance pay.

Career #4 – Managing Director

Who is the Managing Director?

Managing Director spearheads the investment banking business of the company and reports to the board of directors about the financial liquidity and whether it is a concern in the operation.

Managing Director
Responsibilities	Responsible for generating IB deals from the market both in the equity and debt space.
Designation	MD
Actual Role	Business development as ll the team members depend upon the MD.
Top Companies	Jp Morgan, Morgan Stanley, Goldman Sachs, Bank of America and E&Y are one of the top 5 Investment Banks in the world.
Salary	The median annual salary for the same can be anywhere between $ 5,00,000 to $ 10,00,000. However, they are more in favor of the commissions out of the deals that get executed.
Demand & Supply	It is a specialized professional role whose highest degree of networking skills and contacts to get the work done.
Education Requirement	CFP/CPA / MBA from Tier -1 Universities with at least 15-20 yrs of exp.
Recommended Courses	CPA/MBA/CFA
Positives	Spearhead the most highly paid department of any organization. Opportunity to visit large corporate and develop a relationship that may have synergies in the long term.
Negatives	Risk of losing the job if the MD is not able to bring business to the company.

Conclusion

Investment Banking is one of the most favored roles in the industry since it comes with very high compensation and knowledge. With the kind of technological advancement in the world, the IB industry is going to get doubled from where it is now. Going forward there will be a lot of scope in the IB profile since not may candidates with that caliber are available in the market to perform this role since it requires senior-level expertise. The entry in the Investment banking industry is a bit difficult at the early stages of the career but gradually becomes easy ahead.