What Does an Investment Banker Do?
An investment banker primarily facilitates financial transactions and provides strategic financial advice. They assist in capital raising through stock and bond issuance, advise on mergers and acquisitions, and offer financial guidance to clients. Investment bankers also perform valuations and assist in risk management. Their role involves analyzing financial data, conducting market research, and negotiating deals to help clients make informed decisions and achieve their financial goals.
How Long Does it Take to Become an Investment Banker
Becoming an Investment Banker typically involves a timeline of approximately 4 to 6 years. Typically, candidates secure employment in this field after completing their undergraduate and preferably postgraduate education in relevant disciplines or programs.
Steps to Become an Investment Banker
Investment banking plays a crucial role as an intermediary connecting companies, governments, and various entities with investors. Its primary function involves assisting in the procurement of capital for these entities. Below, we’ll outline five key steps involved in this process of how to become investment banker:
- Successfully pass the 12th-grade board examinations: Individuals aspiring to pursue a career in Investment Banking should achieve a minimum aggregate score of 50% or an equivalent CGPA in their higher secondary education (10+2). These exams are administered by recognized boards. While students have the flexibility to select from arts, commerce, or science streams for their 10+2 education, it can be advantageous to opt for the commerce stream with a focus on subjects like mathematics, accountancy, economics, business, and computer technology.
- Attain a bachelor’s degree in a pertinent discipline: To commence a career in an investment bank at the entry level, a bachelor’s degree is mandatory. Some preferred options for aspiring Investment Bankers include Bachelor of Commerce (B.Com), Bachelor of Arts (B.A.) in finance, Bachelor of Arts (B.A.) in economics, and Bachelor of Business Administration (BBA) with a specialization in finance. While the specific coursework can differ among these programs, students can expect to cover subjects such as mathematics, accounting, economics, financial management, corporate finance, investment strategies, taxation, data analytics, and business administration, among others.
- Achieve a postgraduate qualification: Aspiring investment bankers often pursue a coveted postgraduate degree, such as a two-year Master of Business Administration (MBA) specializing in financial management. Alternatively, candidates aiming for a career in Investment Banking can opt for a Master of Science (MS) program in Finance. There are also shorter-duration postgraduate programs available through institutions like the National Stock Exchange (NSE) Academy, which offer specialised courses in investment banking, capital markets, banking and financial planning, business analytics, and management accounting. These programs typically range from six to nine months in duration.
- Obtain Certification: Candidates aspiring to progress in their Investment Banking careers can benefit from obtaining the Chartered Financial Analyst (CFA) professional credential. The CFA program offers comprehensive and hands-on training in investment and finance. It encompasses a range of subjects, including economics, corporate finance, derivatives, equity investments, alternative investments, financial reporting and analysis, and quantitative approaches, giving candidates the flexibility to tailor their studies. Eligible candidates can apply for this program after completing their bachelor’s degree. The duration of the course may vary, typically spanning from one to four years.
- Engage in an Internship Experience: Securing internships within the realm of investment banking is feasible through various avenues, including job search platforms like Indeed, official bank websites, campus placement services, networking opportunities, and human resources consultancies. These internships in investment banking can span durations ranging from two months to two years. Candidates partaking in such internships can not only enhance their financial knowledge but also develop valuable skills in communication, presentation, and negotiation. Depending on their performance during the internship, some candidates may even receive offers for permanent positions as investment bankers.
Types of Investment Bankers
Investment bankers play a crucial role in facilitating intricate financial transactions for various organizations, including corporations and governments. The field is saturated with both major players and smaller firms, each contributing to its dynamics. The career trajectory of an investment banker typically follows a well-established path. Here are some key stages in their professional journey:
- Investment banker analysts are typically specialized in specific industry sectors such as finance, healthcare, manufacturing, or emerging markets. Their primary role involves engaging with company executives and investors to develop arguments in favour of or against investments in particular companies or sectors.
- Investment banker associates act as intermediaries, with their primary duties encompassing the creation and formatting of presentations, organizing client meetings, and conducting in-depth financial analysis. They typically generate more intricate financial models compared to analysts and are tasked with addressing more complex challenges.
- Vice Presidents (VPs) in investment banking collaborate with Directors and Managing Directors (MDs) to understand their objectives and convert them into actionable assignments. As they progress in their careers, VPs also cultivate connections with prospective clients, particularly as they advance towards more senior roles like Senior Vice President (SVP) or Director.
- Directors in the field of investment banking engage in discussions with potential future client companies, attentively addressing their inquiries and understanding their needs. Additionally, they hold meetings with private equity and venture capital organizations to deliberate on their portfolio companies, evaluating whether these companies should consider options like selling, going public, or raising capital.
How to Become an Investment Banker in India
The field of investment banking in India is experiencing high demand due to numerous job opportunities and attractive salary packages. Investment bankers are increasingly expected to possess a strong grasp of market trading activities and profitable securities. To become an investment banker in India, candidates should begin their preparation early, even during their school years. This involves selecting relevant subjects and academic streams that lay the foundation for their understanding of the field.
Outlined below are some crucial steps to pursue a career as an investment banker in India.
Preparation at the School Level: Aspiring investment bankers should opt for commerce as their stream during their 12th-grade board exams. Having a background in mathematics and accounting can significantly facilitate their success in entrance examinations for undergraduate and postgraduate programs, ultimately leading them toward a career in investment banking.
How to Become an Investment Banker after the 12th
- Undergraduate Preparation: After successfully completing their high school education, individuals can choose from various undergraduate programs to acquire the necessary knowledge for becoming an investment banker. These programs typically span a duration of three years and offer comprehensive instruction in the intricacies of the banking and commerce sectors.
- Postgraduate Preparation: Following the completion of undergraduate studies, candidates have the option to enroll in postgraduate programs or postgraduate diploma courses within the relevant field. These advanced programs provide a deeper understanding of the subject matter, equipping individuals with enhanced expertise in their profession and facilitating their journey toward becoming investment bankers.
Investment Banking Courses
Now that you know how to become an investment banker in India, EduBridge offers a Certification Program in Investment Banking Operations and an Advanced Certification Program in Investment Banking Operations in collaboration with IBM.
Benefits of Career as an Investment Banker
Similar to many other occupations, Investment Bankers enjoy a range of advantages and rewards. This field is renowned for being one of the most lucrative professions globally. Here are some of the perks associated with a career as an Investment Banker:
- Earnings: An Investment Banker can earn approximately INR 5 to 8 lakhs per annum, which varies based on their level of experience. As they accumulate more experience and expertise, they have the potential to establish their own startups and make critical managerial choices for their company. Additionally, they can choose to operate as independent freelance Investment Bankers, serving multiple firms and organizations.
- Career Stability: Seasoned Investment Bankers, equipped with the expertise they acquire through their experience, have the flexibility to work from virtually any location on the globe. They can readily secure employment opportunities anywhere worldwide, provided they possess a highly specialized skill set in their respective field.
- Beneficial Influence of the Profession: Investment Bankers serve as intermediaries between sellers and investors, assuming responsibility for facilitating the market’s favourable evolution and efficiency. This contribution positively influences the advancement of businesses, subsequently contributing to economic growth.
- Advanced Education Opportunities: Experienced Investment Bankers also have the option to pursue advanced degrees such as Master’s or Ph.D. programs in the relevant field. They can engage in research within the realm of investments and related areas, and even publish their theses to benefit aspiring individuals interested in pursuing a career as Investment Bankers.
- Distinctive Expertise: Investment Banking stands out as an exceptional domain within the realm of Business Management, affording individuals the opportunity to operate according to their abilities and acumen. Furthermore, it provides a wealth of experiential learning, characterized by an ongoing educational journey where individuals regularly acquire new strategies and techniques.