December 15, 2016
What is Investment Banking?
If you’re a business or finance major, chances are you’ve considered a career in investment banking. Even if you’re not currently majoring in a related discipline, you might be interested in finding out more about investment banking and the types of career options available for recent grads.
Here are some of the key things you need to know about working in investment banking.
What is investment banking?
Investment banking is an area of the financial services industry that focuses on managing and increasing the financial assets of clients. What does this really mean? It means that investment bankers help companies invest their assets with a view towards increasing the value of their portfolios. Investment bankers essentially act as advisors and brokers, helping their clients identify and capitalize on great opportunities.
What do investment bankers do?
The primary responsibility of investment bankers is to advise their clients on investments and help facilitate those investments. This means that investment bankers essentially act as advisors and brokers, assessing the needs of their clients and then finding the right solutions to meet those needs. Once the client has decided how they would like to proceed, it’s up to the bankers to negotiate deals and mergers, ensuring that they are keeping their client’s best interests in mind.
What are the challenges of working in investment banking?
Investment banking is constantly in flux and deeply impacted by changes in financial markets. This can be quite challenging for those who work in the field because it requires them to be quick on their feet and adapt as needed. In addition to fluctuations in the markets, investment banking also presents other challenges such as the ability to manage client assets effectively and to ensure that the worth of those assets increases over time. As a result of the many demands of the industry, investment banking often requires long hours, particularly for those who are just starting out as financial analysts. However, by knowing what to expect and learning how to handle the challenges that arise, this field can be a very exciting one to work in.
What are some of the benefits of working in investment banking?
Although working in investment banking presents many challenges, it also presents many opportunities, particularly for recent grads. For example, because of the fast pace of the industry, employees can build their knowledge bases and skill sets quickly. This will help them advance quickly in their careers and develop transferrable skills. Another great benefit of working in investment banking is being able to build a solid and long-lasting professional network, an invaluable asset which will be useful throughout one’s career.
What is a typical investment banking salary?
Investment banking salaries are some of the highest in the world and this holds true even for entry-level positions. For example, entry-level financial analyst roles typically start at $100,000-$125,000 (including bonuses), while associates with two to three years of experience can earn anywhere from $150,000 to $250,000. Investment banking salaries increase significantly with each year of additional experience, with more senior bankers such as vice presidents and managing directors earning upwards of $650,000 and above.
Although investment banking is certainly a challenging field, it’s also an exciting one that presents many opportunities for recent graduates. The best way to find out if working in investment banking is a good fit for you is to intern at a bank and get a hands-on feel for the role and the culture of the industry.
Next, get more career tips for internships and entry-level jobs such as 6 Things to Do in Your First Week at a New Job and find answers to common interview questions such as If You Could Invest in One Stock, Which Stock Would it Be?