What Investment Bankers Do
Investment bankers perform a wide range of tasks, depending on the position you are in. There are essentially 3 primary roles in investment banking:
Corporate finance – You could perform investments in house for a company or you could be part of an investment firm that deals only with corporate clients. Essentially you will be handling the investment strategies for your clients, producing monthly performance reports and creating a strategy for future investments.
Trading analysis – Typically you will be dealing with individuals and managing their investments. You will perform the basic trading functions and create monthly reports on your accounts.
Research analysis – In this position you will not be dealing directly with any clients. Your primary duty is to perform research on companies to gain an understanding of investment potential. Analyzing market trends and predicting future performance is another area touched upon as a research analyst.
Becoming an Investment Banker
To get an entry level position as an investment banker you will need to have a background in accounting, finance or economics. Sometimes other areas of study will allow you to get your foot in the door, but a degree in those fields will give you the best chances. In addition to a degree there are several courses that can be taken to acquire certifications in different areas. If you do not have much experience, getting a certification can be the difference in getting that job. In addition to the educational requirements, you will need to make quick decisions, think analytically, keep up with industry news, be able to work under pressure and most of all work long hours. With 70-100 hour weeks investment banking is easily one of the most demanding jobs.
Investment Banker Salary
We all know that an investment banker salary is very attractive, but in reality year end bonuses can make up the majority of ones earnings for the year. For example, an investment banker who is making $100,000 per year as a base salary has the potential to make an additional $250,000 in bonuses. Of course many factors play a role here, but it is not unusual to see a bonus of 2-3 times your salary. The more experience, education and certifications you have, the higher starting salary you will receive.
Typical starting salaries range from $60,000 to close to $200,000 per year for entry level positions, depending on location of the firm and your credentials. As you make your way up the “investment ladder” and reach the Vice President and Director positions, you can expect to see salaries starting at $500,000 and going as high as $2 million per year. To achieve such a position you should expect to be in the industry for 7 years minimum with a proven track record.