Investment bankers are considered part of the “high finance” sector. They deal with large amounts of money to ensure their clients get the funding they need. It’s a high-stakes game with a hefty payout.
If you’re curious about investment banking or want to learn how to get a job in investment banking, this blog will teach you everything you need to know to get started.
What a Career in Investment Banking Looks Like
The main task of investment bankers is to raise large amounts of money for companies, governments, and organizations. They get this money through underwriting. In simplest terms, underwriting is taking on financial risk for a fee.
They also facilitate mergers, acquisitions, asset management, equity research, sales, trading, and initial public offerings. Essentially, they’re the bridge between investors and their money. They do the leg work to protect businesses and their investors from loss.
Different Career Paths
Like many fields, there are different career paths investment bankers can pursue.
Types of Investment Banking
The two types of investment banking are:
Corporate Finance focuses on the capital of an organization. These bankers look for ways corporations can acquire more capital for future jobs or ongoing operations.
Industry Coverage bankers keep up to date with any trends, competition, or news that affects a current industry. Industry coverage teams merge into smaller groups covering specific industries or sectors.
Types of Investment Banks
Investment bankers work for, you guessed it, investment banks. There are three categories of investment banks. Each of them covers different-sized jobs. The three types of investment banks are:
Bulge bracket banks are the largest type of investment bank. They negotiate with multi-billion dollar deals and offer services for mergers and acquisitions, financing, and asset management.
Middle-market banks deal with smaller deals. The contracts they work on go up to a few hundred million dollars. They do the same thing as the bulge bracket but at a smaller scale.
Boutique banks comprise two categories: Elite and Regional Boutiques. Elite Boutiques specialize in mergers and acquisitions with the same sized deals as bulge brackets. Regional Boutiques offer the same services as bulge brackets, but their contracts typically cap at $50 million.
How to Become an Investment Banker
Jobs in investment banking are high-stress, but with a high average salary, it may be worth it for some. If you’re looking for how to start a career in investment banking, here are some steps to becoming an investment banker.
Get a Finance Degree
Unlike other fields, a bachelor’s degree in finance is necessary. Getting an advanced degree like a Master’s Degree will set you up even better.
You’ll be dealing with other people’s finances. Your employer needs verification that you’ll know what you’re doing.
Intern in Investment Banking
Acquiring an internship at an investment firm will get your foot in the door. You’ll learn much about the field and have work experience to add to your resume. It doesn’t matter how big or small the firm is — you must start somewhere.
This step will be more straightforward for those currently seeking a finance degree. If that’s you, start applying for internships as early as possible. The goal is to use your summer to start your career.
For those who already have a degree, use whatever network you have when seeking entry-level positions. If there’s no one in your network, attend local job fairs to get your name out there.
Register with FINRA
The Financial Industry Regulatory Authority is a registration that allows you to handle other people’s money. FINRA offers several exams. For those looking to enter banking, series 7 is an excellent place to start. After that, you’ll likely take the series 79 exams.
You can also pursue other certifications.
If you want to go the extra mile, you can take online courses like Introduction to Data Analysis, Legal Foundations of Banking, and Financial Analyst Suite. In addition to building your skills, these types of courses can be a great way to test out if you enjoy finance, for a much lower price point than a college degree!
What Skills Does a Good Investment Banker Need?
Getting a graduate degree is not easy, nor is acquiring the proper skills needed to succeed as an investment banker.
There’s a lot to keep track of in this field. Various forms of math, financial models, creating projections, analyzing, and reporting. A lot is on the line for all parties involved, so you don’t want to miss anything.
Critical thinking skills are fundamental and will help you catch any issues sooner than later.
Part of the job is reporting. There are lots of presentations and talking with different people. Building relationships with the people you interact with at your job requires interpersonal skills and a certain level of emotional intelligence.
If this is an area you feel you’re lacking, check out our course on emotional intelligence.
When working as an investment banker, you’ll need self-discipline. Finishing tasks on time and professionally is hard. Often, this job requires overtime hours, so don’t expect to make it by just showing up. Set goals and work hard.
Setting realistic goals and holding yourself accountable are skills that don’t come easily to everyone. To increase your personal accountability, check out our course on Accountability Training.
Start Your Career in Finance with REDC
When choosing a career path, figuring out where to start can be challenging. Luckily, the REDC offers online courses in both finance and banking. Start learning and networking through the REDC today!