How to Become an Investment Banker

In the investment banking industry, a firm's success is largely determined by the amount and type of deals it manages to complete. Investment banks typically have a ‘deal-chaser’ mindset, which means that they're most concerned with being able to supply clients with qualified opportunities for investing and everyone aspiring must know the essential tips on how to become investment bankers.

Sometimes this can put pressure on the bankers to come up with new tailored solutions for their clients because each and every deal has different requirements. This article outlines some of the qualifications required in investment banking, what training you should pursue to gain them, and how you can prepare yourself to jump into investment banking as soon as possible.

What Does an Investment Banker Do?

Investment banking is the process of finding, structuring, and executing mergers, acquisitions, and corporate financings and other financial deals on behalf of clients. Investment banks are the central players in the investment banking industry because they work with a broad range of customers to supply them with debt and equity financing for their business interests. Although investment banking can be involved in many different areas of business, it mainly concentrates on helping companies acquire other companies, buy real estate, or to take over another company.

Investment Banking Process

Investment bankers use a variety of tools and practices to supply clients with finance, such as bond offerings, stock sales, mergers and acquisitions, and private placement financing. In most cases, investment bankers work with their clients to draw up a plan for funding which can usually be done over a while. This can then be used as the basis for calculating the amount of debt or equity that's required by the client to finance its specific needs.

Qualifications and Training Requirements

To become an investment banker, you need to have several qualifications and experience including but not limited to:

● A university degree in finance or another related field such as economics, accounting or law. An accredited school degree is usually needed for people looking for jobs in finance or investments.

● Presentable credentials such as a CFA certification are a plus.

● The ability to conduct deal analysis is necessary.

● The ability to recruit and hire top talent is also essential.

● You must be able to establish a business relationship with clients.

How to Become an Investment Banker

Before you leap into the world of investment banking, there are certain steps that you need to take to know how to become investment banker and follow for it to be a smooth transition from the start of your career:

Step 1

Prospective employers that are interested in hiring you should do an initial survey on your profile, which can include your experience and qualifications such as what kinds of projects or businesses you've worked on before. You can put this survey on your CV or resume and use it to show that you have the basic qualifications for a job in investment banking. This is one of the most important steps to take when you want to know how to become an investment banker.

Step 2

Once you've established that you meet the hiring criteria, the next step is the interview. Potential employers will schedule an initial interview with you. These interviews will revolve around your previous experience and your interest in working in investment banking. They are also looking for a good fit between you and their firm, so make sure to come prepared with specific examples showing why their firm is a good fit for your career.

Step 3

After that, they'll give you a written offer with their terms of employment and negotiate on the amount of compensation until an agreement has been reached. Most people skip this step and it’s a very important step in knowing how to be successful in banking and how to become an investment banker. These negotiations are usually straightforward and it can be time-consuming and stressful, if you don't have a basic understanding of how this process works and how to become an investment banker.

Step 4

After you've accepted the job, you'll have to show up for training for all of your new duties such as managing clients, understanding financial statements and accounting rules, analysing deals and investing in companies. This is probably one of the most important steps, if not the most important one, in knowing how to become an investment banker.

Not long from now, many investment banking firms will start recruiting new graduate candidates who want to work in this industry. Stay up to date with changes in the industry by following trends in news, financial statements and student thesis topics so that you can stay on top of investment banking news.

Why is Networking Critical?

If you want to get ahead in the investment banking industry, you must improve your communication skills. By networking with partners in the industry, you can become more familiar with upcoming trends and learn about your competition. This will allow you to stay on top of the latest news, which can help you decide whether or not this career is right for you.

If there are certain areas about pursuing a career in investment banking that you're unsure about, ask for advice and suggestions from older professionals so that they can give their insight on things that they've observed or learned throughout their careers. This can also help you learn more about investment banking and why you should pursue it.

Annual Salaries of Investment Bankers

The average salary of an investment banker can vary greatly depending on the type of job, location and experience. Here are a few examples:

Entry level associate: INR 4,10,000 - INR 7,00,000 per year

Senior analyst: INR 8,20,000 - INR 25,000,000 per year

Vice President or Managing Director: Up to INR 82,000,000 per year

You mustn't take yourself too seriously when working in the world of investment banking and keep your sense of humour when the going gets tough. This is a competitive industry from both within as well as outside it, so having a good sense of humour can make all the difference in terms of growing your career in investment banking.

Conclusion

There are a lot of things to consider when deciding whether or not you want to become an investment banker but all of this depends on your passion, job history and how much you want to pursue it. The more knowledge you have about investment banking, the easier it will be for you to make an informed decision, since you have to make the right choices for your future.

FAQs

What are the best banks that offer investment banking jobs?

Mostly reputable firms in the industry, because they have the resources and financial strength to hire the best people for these jobs.

What does an investment banker do?

A banker works on transactions that are needed by clients who wish to raise capital from investors or ‘speculators.’ These transactions can be things such as mergers and acquisitions, equity offerings, or funding.

How much should I expect to make as a stock broker vs a stock trader?

The difference between a broker and a trader is that an investment broker is responsible for advising clients about buying and selling stocks, bonds, mutual funds, and other investments. A trader also advises clients but they also trade the investments that their clients have given them.

Can I make money as a broker or a trader?

It depends on your professional experience as well as your reputation within the industry. If you're just starting, it's best to take all of these factors into consideration when choosing the path for your financial career, especially if you want to make a substantial amount of money in your job.

How do banks make money?

Banks make money by charging a fee for providing certain services to their clients. One of their main services is borrowing money for their clients, which can be very beneficial since banks have access to a large amount of cash. Additionally, investors see banks as safe places to store their assets and therefore invest in them.

How much will investment banking pay me?

It depends on the type of firm you're applying to and your level of experience with trading bonds, stocks and mutual funds. You can expect an investment banker with little or no experience with these investments to earn anywhere from $35,000 - $70,000 per year in salary.