How to Become an Investment Banker - A Complete Roadmap

Goldman Sachs and JPMorgan Chase are like the big shots in the finance world. Why? For 150 years, Goldman Sachs has been ruling impressively, and handling mindblowing $2.5 trillion in assets. Interestingly, JPMorgan Chase is even bigger, with nearly $4 trillion in assets. And finally, Morgan Stanley another major player, although their exact figures aren’t disclosed, holds a promising position. Together, Citigroup and Bank of America round out this exclusive club. Their wealth is staggering – collectively surpassing the GDPs of the United States, China, Japan, and Germany. Imagine, how their assets could actually reshape India’s entire financial landscape! 

Did you know in 2020, the top investment bankers at major financial institutions earned well over a million dollars annually? If this excites you and makes you want to know more about how to become an investment banker, then keep reading our blog, as we will talk about all you have to know to start your journey.  So, with no further due, let’s get started!

Below are the topics we cover in this article:

Introduction to Investment Banking
Who is an Investment Banker?
What does an Investment Banker Do?
Why Become an Investment Banker?
Skills Required to Become an Investment Banker
Roles and Responsibilities of Investment Bankers
How to Become an  Investment Banker: Step-by-Step Roadmap
Investment Banker Salary (India and USA)
Investment Banker Jobs Available Right Now
How to Get a Job as an Investment Banker
Conclusion
FAQ

Check out this Investment Banking Online Course video to learn more about the concepts of Investment Banking:

Introduction to Investment Banking 

Investment banking is one of the highest-paying financial systems in existence, with salaries of around 79,147$ per year, according to Indeed. It serves a variety of goals and business interests. Imagine you are the owner of a huge business, and you are hoping to make the most money possible from the upcoming project.

Approaching investment banks in terms of revenue, raising capital and cost could be the best decision for your organization.

Banks that provide service of investment solutions are majorly categorized into four types. These four types of Investment Banks are the following:

Who is an Investment Banker?

Investment bankers are like teachers. They teach the banks how to make money and expand. With a lot of knowledge and experience, they help the banks improve their businesses. In the same way, students are taught by their teachers in order to grow, investment bankers also assist investment banks to become stronger and more successful. They struggle to get the best possible profits through brilliant ideas and possibilities to expand for the banks while at the same time looking for new sustainable ways.

Explore the Investment Banking Career Path and get some good initiatives for  becoming an investment banker

What Does an Investment Banker Do?

An Investment banker is a person who works on analyzing financial risk and increasing capital. They also work on building relationships with clients and other stakeholders in the market. Investment bankers have to work shifts that are long and stressful but can have the liberty of having great salaries. Let’s see why become an Investment Banker.

We have collected some responsibilities of an Investment Banker Jobs:

According to a post on LinkedIn by Goldman Sachs, the responsibilities of a Global Banking & Markets, Public, BCE Expense Management, Associate, Bengaluru  are as below,

Another job description by JP Morgan for the role of International Private Banking – Project Management – Associate:

Even though there is a difference in both job descriptions, we have made an effort to summarize the important ones for you:

• Building strong relationships with partners and stakeholders
• Perform necessary data analysis
• Handling and taking care of risks and issues
• Providing support for business partners

Why Become an Investment Banker?

One reason people may choose to be an investment banker is that it combines unique challenges, rewards, and prospects, which are extremely attractive to those seeking a career in finance. Here’s why:

Higher Income: Investment banking is famous for its high-pay packages. Some of the top investment bankers earn much more than the average salary, with annual earnings exceeding one million dollars.

Strategic Decision-Making: The position involves making big decisions that affect the clients’ and the bank’s financial health. It can be both highly satisfying and mentally stimulating.

Worldwide Opportunities: In many cases, you get to travel a lot while working as an investment banker in different countries, consequently exposing you to diverse markets and cultures. This creates a great chance for personal development and professional growth.

A Broad Set of Skills: The job calls for various skills, including financial analysis, negotiations, and customer care. This wide skill set makes this position challenging yet intriguing.

Career Progression: In investment banking, there are clear career paths that offer possibilities for promotion. Managers or business heads are some roles that progress with years and can move into roles, like managing teams or leading significant deals.

Impact on the Economy: Investment bankers help businesses raise funds, advise on mergers and acquisitions, and manage financial risks. Thus, by doing so, they maintain the financial stability among large financial institutions, which indirectly impacts the economy in both a positive and negative manner.

Innovation and Technology: The field constantly changes with new technology as well as products of finance. This presents good opportunities for those who want to be up-to-date with the latest in finance.

In brief, it is a laborious career that requires high intelligence and education in both global industries, financial processes, and strategies. It has immense earning potential; fosters strategic decision-making; offers great global exposure; develops a diversified skills base; and enables individuals to make a difference in the world’s economic development.

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Skills Required to Become an Investment Banker

Investment Bankers can’t be the ones who believe in hit-and-trial methods. There is a complete skill set that should be possessed by investment bankers to excel in their growth as well as the profit of their clients. Some of the skills required to become an Investment Banker include:

Analytical Skills: Ensuring that investment bankers’ judgment is not influenced by any type of false information and that they are able to provide their clients with accurate recommendations. Therefore, it is mandatory to have strong numerical and analytical skills.

Networking Skills: Interpersonal skills enable bankers to improve their working connections both with clients and within the company. Socialism is surely important in any career.

Financial Skills: According to an article on Indeed, financial skills with strong mathematical, economic, and accounting skills can help investment bankers take care of large-scale financial transactions. Not only this but knowledge of investment products like stocks, foreign exchange, IPOs, etc. can also give an upper hand. 

Knowledge of Securities & M&As: Knowledge of  Securities and Mergers & Acquisitions (M&A)  is one of the most important skills to become an investment banker, especially if you are working on deal-making, financial advisory, and corporate finance. This can help investment bankers analyze financial securities and help in strategic transactions. 

Economics Skills: These skills help in understanding market trends, providing clients with strategies and helping with better decision-making

Problem-Solving Skills: Investment bankers have to deal with a lot of issues and risks as a part of their job’s volatile economic position across the globe. Thus, making effective and accurate decisions plays a huge role. Every problem has a solution, but choosing the most cost-effective solution is very important.

Check out these Top 12 Courses on Investment Banking.

Roles and Responsibilities of Investment Bankers

Financial transactions and investment ventures bring different kinds of responsibility for investment bankers. Dealing with the big players in the market is not an easy task, investment bankers have to conduct the tasks listed below:

• Gather significant information for financial decision-making by researching, analyzing, and researching numerous market reports and databases
• Observe the current investing climate, identify risks associated with certain projects, and advise clients on how to proceed
• Other administrative tasks, include scheduling meetings, returning calls and emails, and organizing trips
• Analyze, help, and organize mergers and acquisitions for the benefit of their clients.
• To predict business performance, run daily financial metric calculations, financial modeling, and firm appraisals
• To raise private or public cash, Investment Bankers may issue securities, underwrite municipal bonds, and conduct debt and equity sales

Performing these duties is usually the major task of an investment banker. These can also be considered as the parameters for judging whether an investment banker is an asset to the bank. 

Check out our blog on Is Investment Banking a Good Career? for knowing the Pros & Cons of Investment Banker

How to Become an Investment Banker: Step-by-Step Roadmap

The blog’s most crucial question is about to be addressed. Although, you were eagerly anticipating this section, however, the topic of investment banks and their bankers was just as crucial. To start with – Investment banks, however, have a long list of requirements when it comes to hiring applicants. How about starting with the most basic necessity that is required to be an investment banker? Below is the step-by-step road map on how to become an investment banker:

• Step 1: Complete Higher Secondary Education:
  It is a higher secondary education (10+2), and one must clear it with more than 50% marks from a recognized board. If possible, choose commerce as your stream for high secondary. So that you will have a grasp on subjects like mathematics, accountancy, economics, and business. 

• Step 2: Get a Bachelor’s Degree: Despite the diverse backgrounds of investment bankers, a solid foundation in mathematics is crucial. Earning degrees like a Bachelor of Commerce, a Bachelor of Arts in Finance, and a Bachelor of Business Administration from a prestige university will be the next step towards investment banking. However, you must devote time to earning a master’s degree if your career goal is to work as an investment banker.

• Step 3: Get an Advanced Degree: To exclude other competition, you can think of doing a doctorate too, like a Ph.D. in Finance and Banking. A great value can be added if you take certification exams like CFA, NISM, CA, etc.  If you are a working professional and don’t want to go for an on-campus degree program in Investment Banking, then you must check out the MBA in Investment Banking program offered by Intellipaat and IIM Ranchi. This state-of-the-art degree program is offered in collaboration with IIM Ranchi, one of the elite B-Schools in India.

• Step 4: Learn Technical Skills: In today’s competitive environment, a lot is expected from Investment bankers. Mastering technical skills in areas such as accounting, finance, as well as M&A and LBO modeling, can give a candidate an upper hand.

• Step 5: Do an Internship and Advance your Skills: Industrial experience always has more weightage than any degree, this is the ace card of all of your hard work. Even if you don’t wish to do a PhD,  you must have a bachelor’s degree, and a Chartered Financial Analyst certification, and pursue an internship in an investment bank that lasts from 2 months to 1 year. You might be granted the chance to work as an investment banker permanently, depending on how well you perform throughout your internship.

• Step 6: Build Network: Apart from the technical abilities, you should also build networks and connect yourself more to the world of investment banking. This trait will bring you lots of links that will help you in your upcoming profession.

Investing 5-6 years to seek a particular job? Too much to invest, right? If you experience these kinds of insecurities, you fit into the group of common people. Do not worry about it, it is a profession that guarantees you significant growth, so the risk is worth taking.

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Investment Banker Salary (India and USA)

As we have already discussed, Investment bankers are one of the highest-paid individuals. Let’s look at their salaries in India and USA.

• Salary in India: An average investment banker earns up to 18.5L Rupees/ Annum according to Ambition Box.
• Salary in the USA: An investment banker’s average base salary is between 1L – 2L/ Annum according to Glassdoor.

Investment Banker Jobs Available Right Now

Right now, if you just Google and browse ‘Investment Banking Jobs in India’, you will find out that just on LinkedIn, there are 5,000+ jobs available.

In the United States, the number is even better, 21,000+  jobs.

How to Get a Job as an Investment Banker

You can easily seek the job of an investment banker by applying to an available position with an investment bank and financial advisory company. Below are some of the tips you can follow to help you  achieve your goal:

• Making Connection: Already discussed how much connection is important in today’s professional world. Start by interacting with people with similar interests. You can choose to make connections on platforms like LinkedIn or join groups and communities online. 
• Do Self-Study: You can do some research on the basic and advanced concepts of investment banking, which can help you keep the concept fresh. You can do this with free YouTube videos and blogs.
• Build Resume: Once you have the required skills, create a resume where you mention your objective, educational background, skills in the domain, projects, and any industrial experience. 
• Pursue a Course: Skill development always carries weight, it shows how much dedicated you are to pursue a career in that field. You can choose to take an investment banking course to strengthen and develop your skills.
• Prepare for the Interview: You can start by going through the most common investment banking interview questions asked. This can help you to understand what kinds of questions can be asked.

Conclusion

It might be rewarding to invest in a career in investment banking. Investment banking is one of the most lucrative careers in the world and has a good reputation. If it is asking for hard work, it will also give you the sweetest fruit. I hope that you got an answer to the question you had before reading the blog.

FAQs