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Careers in Investment Banking

Updated on April 10, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

List of Top 4 Careers 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.

Careers in Investment Banking

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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 underwriting and 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, including 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 specializing in one aspect of 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 helping 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 regarding bonuses and perks.

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What is Investment Banking? Video

 

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 has just completed his degree from college and is looking out for a Job in the IB Industry to make a career.

Analyst – Job Description
ResponsibilitiesResponsible for updating the deal books periodically and performing industry analysis to complement the decision-making process.
DesignationInvestment Banking Analyst
Actual RoleIs to work on large databases and presentations, prepare IM, due diligence reports, etc.
Top CompaniesJP Morgan, Morgan Stanley, Goldman Sachs, Bank of America, and E&Y are one of the top 5 investment banks.
SalaryThe 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 & SupplyHighly demanded profile since it requires extensive presentation skills to prepare different types of pitches to the clients with limited data available.
Education RequirementCFA/CPA / MBA from Tier -1 Universities with at least 2-5 Yrs of Exp.
Recommended CoursesCPA/ MBA / CFP/ CFA
PositivesBe a part of the entire deal cycle and chances to earn huge bonuses at the end of the year.
NegativesLong working hours on building presentations and storing client data.

Career #2 – Associate

Who is the Associate?

The Investment Banking Associate oversees the work done by the junior analyst and guides 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 – Job Description
ResponsibilitiesResponsible for checking the work done by the analyst and mentoring him with the knowledge and expertise required for the job.
DesignationInvestment Banking Associate
Actual RoleSupport 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 analysts under him.
Top CompaniesJP Morgan, Morgan Stanley, Goldman Sachs, Bank of America, and E&Y are one of the top 5 investment banks.
SalaryAn investment banking associate’s median annual salary can be 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 & SupplyA highly knowledgeable and skilled role requires practical experience to effectively execute a transaction in the firm.
Education RequirementCFA/CPA / MBA from Tier -1 Universities with at least 7-10 yrs of exp.
Recommended CoursesCFA/CPA/ MBA
PositivesLead a team of analysts and report to the vice president.
NegativesLong working hours and is responsible for all the work done by the junior analyst.

Career #3 – Vice President

Who is the 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 responsible for sourcing deals from the market both in the equity and debt space and periodically generates a good amount of revenue for the company.

Vice President – Job Description
ResponsibilitiesResponsible for business development and execution of deals.
DesignationVice President – Investment Banking
Actual RoleBuild relationships with corporates and ensure that the company regularly gets good business from them.
Top CompaniesJP Morgan, Morgan Stanley, Goldman Sachs, Bank of America, and E&Y are one of the top 5 investment banks.
SalaryA general manager’s median annual salary can be between $ 3,00,000 – $5,00,000. This is a very broad number and can vary from bank to bank.
Demand & SupplyHighly Demanded Profile in IB because the IB Division P&L depends on the VP who is supposed to bring business to the company.
Education RequirementCFA/CPA/MBA/Valuation Expert with 10-15 yrs of exp.
Recommended CoursesCFA/CPA/MBA
PositivesLeads the department and allocates work to the team members.
NegativesThe salary component is less fixed and more variable or performance pay.

Career #4 – Managing Director

Who is the Managing Director?

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

Managing Director – Job Description
ResponsibilitiesResponsible for generating IB deals from the market both in the equity and debt space.
DesignationMD
Actual RoleBusiness development as all the team members depend upon the MD.
Top CompaniesJP Morgan, Morgan Stanley, Goldman Sachs, Bank of America, and E&Y are one of the top 5 investment banks.
SalaryThe median annual salary for the same can be 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 & SupplyIt is a specialized professional role whose highest degree of networking skills and contacts to get the work done.
Education RequirementCCFP/CPA / MBA from Tier -1 Universities with at least 15-20 yrs of exp.
Recommended CoursesCPA/MBA/CFA
PositivesSpearhead the most highly paid department of any organization. Opportunity to visit large corporations and develop a relationship that may have synergies in the long term.
NegativesRisk of losing the job if the MD cannot bring business to the company.

Conclusion

Entry into the Investment banking industry is a bit difficult at the early stages of the career but gradually becomes easy. 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 will double from where it is now. From now on, there will be a lot of scope in the IB profile since not many candidates with that caliber are available in the market to perform this role since it requires senior-level expertise.

Recommended Articles

This has been a guide to careers in investment banking. Here we provide the list of the top 4 investment banking careers: Analyst, Associate, Vice President, and Managing Director. You may also have a look at these finance articles below –

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