Investment banking career path: For an individual looking at a career in finance, investment banking (IB) is one of the most favored options in recent years. But, do you even understand what it signifies and the duties involved, or is it just a popular buzzword?
What is investment banking (IB)?
Investment Banking is a financial service rendered by a banking division or a finance company. It basically evolves around assisting wealthy individuals, companies, or even governments to raise or create needed capital. They indemnify new securities for all kinds of corporations and companies, they help in facilitating the sale of securities, and they’re also responsible for the arrangements for mergers and acquisitions or reorganizations.
Who is an investment banker?
An investment banker is a professional who not only understands but also counsels corporations about the viability of large projects. An investment banker helps in the identification of the risks related with the projects before his clients invest their time and money.
IB primarily revolves around two duties:
- Raising capital
- Completing mergers and acquisitions (M&As)
The job is no cakewalk, because of the importance of both their position and the type of clients they take on.
There are few factors to consider when thinking about a job in investment banking, and they are:
- The job is quite high-profile.
- Wages and bonuses are high.
- There is fierce competition for positions
- The Work hours are taxing, a typically analysts does around a hundred hour weekly.
What sort of personality suits an investment banker?
There are a few personality traits that is beneficial to you if you choose to delve into investment banking and be a successful investment banker.
Some of these traits are:
- You need to be very competitive
- You must possess a keen sense for detail
- The passion to drive a career in finance.
- A hunger for wealth.
- You should be able to work efficiently under pressure.
- You should be great with numbers.
- You have to be a very ambitious person
- You should carry around an aura of been presentable and refined.
- You need to be disciplined.
- You have to be creative and innovative.
- You must possess a great social and relationship-building skills, including being able to work with difficult people in extreme situations.
How do I know if Investment Banking is for me?
This is a tough nut to crack, but a very relevant question nevertheless. The not-so-great reason for entering into the field include:
- Generic reasons like, wanting to work with clients and/or make a huge impact on the world. Truth is, you could achieve all of those and more by investing in the stock market, by starting a side hustle, taking up freelance coding, and a lot more.
To ensure you really like the investment banking industry, the below-listed points are vital:
- You must have a keen desire to advise companies on debt, equity, and M&A transactions
- Ensure you can spend tons of hours on MS Word, Excel and PowerPoint as this are mostly tools that you’d frequently use during work.
- You must be interested in an exit opportunity where investment banking is a prerequisite. This can be either private equity or corporate development.
Okay. So how do I enter the Investment Banking industry? Factually, there are many ways to get into the industry, you can pick one of four entry means discussed below:
- Been an undergraduate from a top university
This is possibly the simplest and the least expensive way to get into the field of investment banking, this would require you to make the move by the second year of your undergraduate degree. You are most likely to be employed as an Analyst, where you could stay for more than three years before either being promoted or your other options play out.
- As a recent graduate
You could be functioning in an investment banking-related role after your graduation, then later move into Investment Banking full time. This is totally dependent on the specific nature of your full-time job and also the market conditions at your intended time of switching.
- Studying MBA
You might need to apply to a top-tier MBA program and switch into Investment Banking after finishing it. Pursue your studies diligently plus use every medium to network way before the commencement of the program. If you’re lucky, you could be offered an Associate role, where you would perform similar duties as an Analyst but would be given more responsibilities quicker and be on the fast track for promotion.
- Beyond MBA
Switching into investment banking if you have been in the workforce for a number of years after your MBA becomes very difficult at any level.
Any particular steps I need to follow?
Immediately you’ve figured out the path and the timing you wish to follow, get on with the following steps:
- Get internships or jobs that allow you to step up to investment banking roles.
- Prepare to walk the recruiter/interviewer through your CV while laying emphasis on the investment banking relevant experience.
- Let your CV focus on the business impact of your job.
- Network appropriately to land interviews and offers.
- Prepare adequately for interviews.
- Complete the interview process and receive offers.
- If you do not successfully pass the interview stage, assess and reassess where you fell short, work on it and try applying again, or aim for different fields.
Should I get an Investment Banking certification?
For a few investment banking roles, a few banks look at non-finance professionals too, this is usually in addition to finance professionals. An investment banking career offers high returns, thereby drawing a lot of people to the field. This is why an Investment Banking Certification may be necessary, as it attests to your command of the required skill-sets.
For an investment banking certification, the Investment Banking Council of America (IBCA) is an amazing choice. IBCA certifications cater to professionals associated with various aspects of investment banking like, advisory, underwriting, M&A, equity, bond, or derivatives financing. IBCA utilizes the world’s most renowned yardsticks in investment banking practice via the 60-point IBCA-IBANX™ standards. It offers only one certification: Chartered Investment Banking Professional (CIBP).
Investment banking is certainly one of the most fascinating and pleasantly rewarding career choices for individuals in the finance industry. So equip yourself with the ability to function optimally under high pressure while putting in long hours, and supplementing your strong domain knowledge with the right certification, do and you are on your way to the top.