How Can I Become An Investment Banker In 2020? Salary, Schools, Cost

Would you love to help people fix their financial problems? If yes! Then, becoming an investment banker in 2020 is your surest bet.

A lot of people who want to earn a living by becoming an investment banker ask questions like; Why investment banking? Where can I learn investment banking? and so on.

We will give you an overview of what and who an investment banker is. You will also learn how you can become an investment banker and that includes the best schools that offer degrees programs in investment banking or related programs.

To get the best of this publication, we advise that you read in between lines so that you don’t skip the most important part.

What Is Investment Banking?

Investment Banking is a type of segment in banking operation that helps individuals or organizations raise capital and provide financial consultancy services to them.

Investment Bankers act as intermediaries between security issuers and investors and help new firms to go public.

According to Wikipedia.org, An Investment bank is a financial services company or Corporate division that engages in advisory-based financial transactions on behalf of individuals, corporations, and governments. 

Types of Investment Banking

Basically, in an investment banking division, bankers are typically shared into two groups and that includes, the product and industry. However, the three most common product groups are mergers and acquisitions, restructuring, and leveraged finance. In addition, there are also product groups within securities underwriting.

The largest investment Banks are noted with the following;

  • JPMorgan Chase.
  • Goldman Sachs.
  • BofA Securities.
  • Morgan Stanley.
  • Citigroup.
  • Credit Suisse.
  • Barclays Investment Bank.
  • Deutsche Bank.

What Do Investment Bankers Do?

The role of investment bankers include;

  • Help schools, companies, and other institutions secure capital.
  • Investment banks facilitate deals between companies that want to raise money by issuing securities and investors who are willing to pay in exchange for securities.
  • They handle financing issues, including helping a corporation choose what type of securities to issue, or placing those securities with investors, also known as underwriting.
  • Help with the completion of mergers and acquisitions, including company valuation, strategizing, and deal finalizing.
  •  They also handle the financing of the final deal if it requires the issuance of new debt or stock.
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Why Investment Banking?

Becoming an investment banker in the UK typically requires years of academic study and internships. Commonly, you will head into a graduate role after university, putting in the hours to gain as much experience as possible.

Investment bankers are renowned for working long hours, so you will need to show commitment and enthusiasm early on in your career. You will also need strong financial and commercial awareness, keeping up to date with the latest affairs.

Successful investment bankers usually have a strong background in mathematics, excellent negotiation skills and the ability to work in high-pressure environments.

Investment bankers are renowned for working long hours, so you will need to show commitment and enthusiasm early on in your career. You will also need strong financial and commercial awareness, keeping up to date with the latest affairs.

Successful investment bankers usually have a strong background in mathematics, excellent negotiation skills and the ability to work in high-pressure environments.

By working as an investment banker you can expect:

  • High earning potential
  • A competitive work environment
  • Growth and development as a graduate
  • To deal with high-profile transactions.

How Can I Become An Investment Banker?

The first step to choosing any career path is to get all the necessary information about it including the jobs, schools, and salary. Actually, the minimum requirement for an entry-level in any banking career is to obtain a bachelor’s degree.

Basically, this career part begins from high school to the advanced degree level. So, pre-requisite classes for banking program includes courses such as business, finance and even math classes during college can be a practical way to build your knowledge base.

This is especially true if you’re coming to investment banking from a non-traditional major like English or history. Here is the step by step guide on how you can become a certified investment banker.

  • Earn A Degree
  • Apply For Internship
  • Build your network
  • Get A Licensure
  • Apply For Advanced Degree

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.

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While it is true that liberal arts majors can get jobs on Wall Street, if you have your heart set on investment banking, you’ll be tilting the odds in your favor if you stick to the traditional fields of study that are most closely aligned with your career goals.

Investment banks recruit from the best colleges and universities in the world. In the U.S. In Great Britain, the London School of Economics is consistently the top choice, with University College London, the University of Cambridge, the University of Oxford, and the University of Warwick among the perennial leaders.

Remember, investment banking is a global enterprise with New York, London, Hong Kong, and Tokyo serving as home to the major banks that employ many of the world’s most successful.

  • Awareness of laws surrounding individual income tax
  • Ability to prepare individual income tax forms
  • Understanding of common software used in tax return preparation
  • Ability to explain how the Federal Reserve Board functions within the financial industry
  • Understanding of the role of money in banks
  • Awareness of monetary and fiscal policies
  • Understanding of the credit system
  • Ability to conduct a loan interview
  • Awareness of different risk factors affecting lending scenarios

Most entry-level investment bankers start as financial analysts, the investment banking career track really begins with an internship. In fact, both large banks and smaller boutique banks recruit entry-level employees from their yearly crop of interns, so securing an internship during college is key to setting yourself up for success.

This will typically be a summer internship during your junior or senior year and (if successful) will lead to an offer for a full-time financial analyst role.

  • Awareness of common e-commerce technologies
  • Ability to implement strategies to increase business growth through the use of the web
  • Understanding of how e-commerce fits into the banking industry
  • Development of skills needed to manage mergers and acquisitions between businesses
  • Understanding of the laws governing capital structure changes
  • Ability to consult with clients about financially healthy mergers and acquisitions
  • Awareness of different types of investments available, and the pros and cons of each
  • Ability to consult with clients on investment opportunities best suited to their goals
  • Understanding of various portfolio selection models.

Investment banking is as much about who you know as about what you know so building your professional network is crucial to landing a great job after graduation.

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An effective way to do this is through internships and networking events, particularly those aimed at college students and recent graduates. Attending recruiting events can also be particularly helpful since you’ll be able to meet with recruiters in person.

In order to represent a bank or financial institution as an investment banker, these professionals are required to register with the Financial Industry Regulatory Authority (FINRA), which includes an examination based on their specific work.

#5 Apply For Advanced Degree

You do not necessarily need a Master’s degree to follow an investment banking career, but it can make you a desirable candidate and give you an advantage over others. If you choose to study for a Masters’s degree, you should look at areas that will be beneficial to potential employers.

Areas such as finance, investment management, and wealth management are usually sought after, but business administration and computer science can also be fantastic choices. Developing complex quantitative skills can make you highly-employable.

Where Can I Study Investment Banking?

If you’re set for a career in the financial markets and wondering which school you should enroll in. There are a number of options when it comes to specialist investment banker qualifications. Here are the best finance schools in the world.

Other investments bankers programs are;

  • Bentley University
  • Georgetown University
  • New York University
  • University of Notre Dame
  • University of Virginia
  • Indiana University – Bloomington
  • University of North Carolina
  • Massachusetts Institute of Technology
  • University of Illinois
  • Ohio State University
  • Villanova University
  • Carnegie Mellon University
  • Providence University

Where Do Investment Bankers Work?

A career as an investment banker can allow you to work in different areas of an investment bank. This could be in corporate finance, debt capital markets or equity capital markets.

You will typically start in a junior position such as an analyst or an associate. These two to three year positions will give you the training to progress to associate level.

 With further experience and training, you could move onto a senior position, managing both analysts and associates. After 10-15 years of working in the industry, you could be looking to move up to director roles. You will need to show true commitment to the career path to progress to higher roles. Strong performance and a desire to succeed are key to progress.

How Much Does It Cost To Become An Investment Banker?

A four-year degree program in investment banking typically costs $25,000 from an accredited private university. Similarly, the same degree program from a public university costs an average of about $6,600.

Investment Bankers Salary

The US Bureau of Labor Statistics groups investment bankers with securities, commodities, and financial services sales agents, and this group earned a median yearly salary of $71,720 in 2012.

Investment bankers’ base salaries are often supplemented with bonuses from their employer, so one’s earnings in this field can be quite high, reaching past $100,000 within a few years as an analyst.

Below is the breakdown of the Investment banker’s salary based on Wall Street Oasis(WSO).

  • Analyst – First Year: $70,000 – $150,000
  • Analyst – Third Year: $120,000 – $350,000
  • Associate – First Year: $150,000 – $350,000
  • Associate – Third Year: $250,000 – $500,000
  • Vice President: $350,000 – $1,500,000
  • Managing Director/Partner: $500,000 – $20,000,000+

Investment Bankers Career Prospects

Most Investment bankers begin their careers at the analyst level and, with experience and additional education, they advance into associate positions. Others enter the field as associates after working in another industry and earning a graduate degree such as an MBA.

With experience, these associates can become vice presidents at their banks, supervising analysts and associates and interacting more directly with clients. After some time as a vice president, investment bankers may then become directors or principals at their bank and further focus on building relationships with new and existing clients.

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One of the highest positions an investment banker can reach is managing director, and at this level they work almost exclusively on bringing in new business.

As investment bankers move up the hierarchy of their bank, their base salary increases, but their potential for bonus earnings increases much more.

Frequently Asked Questions

What can I do with Degree in Banking?

With a degree in investment banking, you can become or work in a company as financial analysts, insurance managers, financial examiners, personal financial advisors, financial advisors, brokers, and investment bankers.

Where is the oldest Investment Bank?

Banca Monte dei Paschi di Siena also known as BMPS, is the oldest surviving bank in the world. It was founded in 1472 by order of the Magistrature of the Republic of Siena as the Monte di Pietà and has been in continuous operation since then.

What services do Investment bankers offer?

Investment banks provide four primary types of services: raising capital, advising in mergers and acquisitions, executing securities sales and trading, and performing general advisory services. Most of the major Wall Street firms are active in each of these categories.

Conclusion

A career in investment banking can be very Lucrative and fulfilling. Just like other financial professions, your career path begins from high school. Firstly, you have to focus on the selection of finance or banking related courses like mathematics, computer, and ICT because they’ll provide the foundation you will need for advanced coursework in Finance and Economics.

Also, you will have to consider English too because they teach communication skills that you’ll need in your later practice and also focus on maintaining good academic scores and CGPA.

After graduation, your next step is a four-year bachelor of science degree. Carefully review the admissions requirements for the banking colleges you’re interested in attending.

There are many institutions across the world that offer banking and finance programs and that include both online and on campus. However, you can actually become an investment banker without a degree but you may need a certification if you desire a better opportunity in the financial market.

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