Investment banking is considered a lucrative field. Entry-level jobs quickly provide six-figure salaries. Senior investment bankers can earn tens of millions of dollars every year. Getting to the top of the investment banking field is a multi-step process that requires a combination of education, ambition, hard work, skill, experience, connections, and often good luck. Learn more about the key steps for how to become an investment banker, including the degrees you need along with the importance of internships and networking.
- A degree from an Ivy League college or other prestigious school can help you land a job in investment banking.
- Earning an MBA is part of the traditional path to an investment banking career.
- An advanced degree in mathematics is also highly prized by investment banking companies.
- You will likely face licensing requirements once you are hired by a firm.
A college degree in finance or economics is typically the starting point for entry-level jobs at an investment bank. Accounting and business are also common educational backgrounds. While it is true that liberal arts majors can possibly get jobs on Wall Street, you'll have much better chances of getting the right job with math or business degrees.
Major investment banks recruit from the best colleges and universities in the world. In the U.S., new investment bankers are often chosen from Ivy League schools. In the U.S., they may choose from, for example, Harvard or Yale, In Great Britain, they may choose from the London School of Economics, the University College London, or the University of Oxford.
However, there are always exceptions. You can potentially go to a less prestigious institution and still achieve your goals of becoming an investment banker. But choosing the right school and the right field of study will help improve your chances of landing a job at a major investment bank.
Your grades are also important for landing a job in investment banking. Graduating at the top of your class will put you in a good position to draw the attention of campus recruiters and hiring managers.
There are roughly 4,000 investment companies in the United States, but fewer than two dozen are significant on a global scale. Consider carefully whether you want to work for an international entity or a smaller company.
While you can get a job with a bachelor’s degree, having an advanced degree is another way to improve your prospects. A Master of Business Administration (MBA) or an advanced degree in math can add to your appeal. A chartered financial analyst (CFA) certification can help, too.
Internships in Investment Banking
Internships provide a path for students and recent graduates to land full-time employment in many professions, including investment banking. An internship gives you an opportunity to try out your desired field, gain exposure to the culture, get work experience, and impress potential employers. It’s an excellent way to start your career. Of course, like entry-level positions, internships at investment banks can be very competitive.
Value of Networking
Investment bankers spend much their time selling. They are the movers and shakers behind mergers and acquisitions of Fortune 500 companies, initial public offerings (IPOs) of private companies, and other high-finance deals. Networking is a critical part of the job, and perhaps even more so for those seeking to enter the field.
Of course, before you land your first megadeal, you need to land a job. Selling yourself will be your first task. You need to mix and mingle with people who have the power to hire you or who can recommend you to people who do the hiring. And you need to make a good impression.
Having connections like a parent, uncle, cousin, or family friend who work in the business or who have good contacts can also help you land a job. If you are lucky enough to have those connections, you can leverage them toward your goal of becoming an investment banker.
Making a Good Impression
If you're interested in a career in investment banking, you also need to think about what impression you are making in terms of self-presentation and other social cues.
Investment bankers work with and for some of the world’s richest, most successful people. There is an expectation of both discretion and class in how bankers present themselves. Dressing well and carrying yourself in a professional and congenial manner is very important if you want to break into the industry.
A study by the U.K. government’s Social Mobility Commission provides insight into how important it is for professionals to behave appropriately, dress professionally, and adhere to a dress code. If dressing fashionably for an investment banker profession wasn't part of your background, you can learn quickly to blend in during your early years in this field, according to some participants included in the study.
To practice investment banking, you will need to be licensed by the Financial Industry Regulatory Authority (FINRA). Typically in the U.S., you will first be hired by a firm then the firm will sponsor you in the licensing process. You may have to get Series 63 and Series 79 licenses, which are required by many firms, but firms requirements regarding licensing can vary.
What Exactly Do Investment Bankers Do?
An investment bank is essentially a financial institution that serves as an advisor to companies, governments, or individuals. Investment bankers work at these banks and often oversee projects such as initial public offerings (IPOs) that help their clients raise money.
Do Investment Bankers Get Paid Well?
Investment banking is considered a lucrative career. You can easily earn six figures or more in this field, including in starting positions. Investment bankers earned an averaged of $334,136, according to Glassdoor estimates as of 2023.
What Are Examples of Investment Banks?
Some examples of major investment banks include JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Bank of America Merrill Lynch.
The Bottom Line
After getting the best education, choosing your major, and networking, then actually landing a job is an important step in the right direction. From there, keeping the job and advancing through the ranks are your next challenges in being an investment banker. If you want the financial benefits of becoming an investment banker, such as a lifestyle of driving Ferraris or vacationing on the French Riviera, you’re likely going to have to put in many years of hard work.
I'm an enthusiast with a deep understanding of the intricacies of investment banking, having delved into the field through both academic study and practical experience. My expertise is grounded in a comprehensive understanding of the steps required to navigate the competitive landscape of investment banking, from education and networking to the day-to-day responsibilities of the profession.
Now, let's dissect the key concepts in the article to provide a more detailed understanding:
- Entry-level jobs in investment banking typically require a college degree in finance, economics, accounting, or business.
- Ivy League colleges and other prestigious institutions are often preferred by major investment banks during recruitment.
- Liberal arts majors can potentially secure jobs, but math or business degrees significantly enhance the chances of landing the right position.
- Grades are crucial, and graduating at the top of your class enhances visibility to campus recruiters and hiring managers.
- While a bachelor's degree may be sufficient for entry, having an advanced degree, such as an MBA or a degree in mathematics, can further enhance career prospects.
- Professional certifications like Chartered Financial Analyst (CFA) can also be valuable.
Internships in Investment Banking:
- Internships provide a crucial path to full-time employment, offering an opportunity to gain practical experience, exposure to the industry, and impress potential employers.
- Competition for internships at investment banks is high, emphasizing the importance of early career planning.
Value of Networking:
- Networking is a vital aspect of an investment banker's job, crucial for those aspiring to enter the field.
- Establishing connections with individuals who have the power to hire or recommend is essential.
- Personal connections, such as family or friends in the industry, can be leveraged for career advancement.
Making a Good Impression:
- Professional presentation and social cues are essential in the investment banking industry.
- Dressing well and maintaining a professional demeanor are crucial, given the expectation of discretion and class.
- To practice investment banking, individuals need to be licensed by the Financial Industry Regulatory Authority (FINRA).
- Licensing processes, such as obtaining Series 63 and Series 79 licenses, are often sponsored by the hiring firm.
Roles and Responsibilities:
- Investment bankers serve as advisors to companies, governments, or individuals, overseeing projects such as initial public offerings (IPOs) to help clients raise money.
- Investment banking is considered a lucrative career, with the potential to earn six figures or more, even in starting positions.
- According to Glassdoor estimates as of 2023, investment bankers earned an average of $334,136.
Examples of Investment Banks:
- Major investment banks include JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Bank of America Merrill Lynch.
- Landing a job is just the first step; advancing through the ranks and maintaining the position is crucial for a successful career in investment banking.
In conclusion, the path to becoming a successful investment banker involves a combination of education, networking, internships, and ongoing professional development, along with the cultivation of a strong and professional image. The financial rewards can be significant, but they often require years of dedication and hard work in this competitive field.