Education and Training: Advanced degree plus training
Salary: Starting—$45,000 to $85,000 per year
Employment Outlook: Good
Definition and Nature of the Work
Investment bankers arrange and negotiate large financial transactions. They are employed by investment banking firms to act as advisers to client companies and to initiate moneymaking ventures for their own firms. Investment bankers are also employed by large commercial banks.
An investment banker's work is diverse, dictated by the financial needs of clients. If a company plans to merge with or acquire another company or sell a subsidiary, an investment banker usually negotiates the agreement. When a corporation is facing financial difficulty, such as a large budget deficit or failing operations, an investment banker is called in to study the situation and find a remedy. When a client company issues new stock, the investment banking firm might underwrite, or take financial liability for, the stock, while the investment banker finds buyers for the shares. Investment bankers may also manage the investments of their client companies.
Education and Training Requirements
A master's degree in business administration (MBA) from a top school is generally required. Some firms hire liberal arts graduates and train them to become analysts, but these trainees usually pursue a graduate degree in business if they plan to remain in the field. A few investment bankers transfer from other related fields, such as finance, law, or banking.
Getting the Job
Most investment bankers are recruited directly from colleges and business schools, and some are offered trial jobs in the summer while they are still in school. Recruiters look for well-rounded candidates who participate in extracurricular activities while maintaining excellent academic records.
Advancement Possibilities and Employment Outlook
A successful investment banker may be promoted to vice president or managing director. A large investment banking firm might have forty to eighty managing directors, or partners.
The number of job opportunities for those interested in investment banking typically grows with the economy. Investment banking firms, however, are few in number, and the competition among applicants for jobs with these firms is intense. A firm might hire less than twenty-five employees from a field of more than one thousand applicants.
Because investment banking involves huge financial risks and large-scale crises, an investment banker's work is often stressful and demanding. Those employed in the field report average workdays of fourteen to seventeen hours, frequent and often unexpected travel, interrupted weekends, and all- night work sessions. Because of the ups and downs of financial markets, job security is low. However, most investment bankers find the work exciting and creative.
Where to Go for More Information
American Bankers Association
1120 Connecticut Ave. NW
Washington, DC 20036
Earnings and Benefits
Annual salaries for investment bankers are well above $100,000 after the first few years. Entry-level salaries, however, started at $45,000 per year for someone with a bachelor's degree and at $85,000 per year for someone with an MBA in 2005, according to WetFeet.com. In addition, entry- level investment bankers often received large, year-end bonuses of $10,000 or more. Benefits usually include paid holidays and vacations as well as medical insurance.