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How to Become an Investment Banker? Complete Guide

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27th Feb, 2024
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How to Become an Investment Banker? Complete Guide

In my experience, becoming an investment banker has been both tough and rewarding. I was wondering how to become an investment banker. It’s all about hard work and skill building. Despite the tough job, there’s enormous potential to grow personally and professionally. As I’ve worked in finance, I’ve seen firsthand how important it is to have good analytical skills, be persuasive, and communicate well when helping clients with their finances. 

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When I say investment banking is a challenging career, I mean that it may sometimes cost your sleep and sanity as you crunch numbers, but keep in mind – you’ll be rewarded handsomely if you’re good at what you do. As you help your client or company succeed financially, you will undergo immense personal growth and receive gratifying monetary benefits with steady career development. Once you establish yourself as an investment banker, various more prominent careers in finance await you for a more stable, more rewarding, and relatively relaxed occupation in your later life. 

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As an investment banker, I’ve helped clients raise money and mergers. It’s a challenging job, but it’s also fulfilling and can lead to a successful career. 

Who is an Investment Banker?

An investment banker is a finance expert who manages the finances and investment decisions of a company, a bank, or a financial institute. It is one of those professions where merely having a degree does not suffice – you need a knack for numbers and real-life experience. The job role incorporates duties like raising capital, administer securities, investments, and fundraising from the capital markets. Investment bankers also create vital financial strategies for mergers and acquisitions and asset management. 

On the whole, an investment banker is responsible for most of the finance manager for an organisation. Their key goal is to raise the required funds for operations and growth, make investments and assure financial security, and improve the overall financial portfolio of the company. However, investment bankers are not liable for any decision-making – they act as expert financial guides to the senior management.

Thus, investment bankers must possess a mélange of attributes, including the right educational qualifications, skill-set, foresight, network, and a tad more than sheer luck to succeed.

There are certain hard skills that are required to be an investment banker-

  1. Mathematical skills
  2. Analytical skills
  3. Communication
  4. Project Management
  5. Problem- Solving
  6. Negotiation
  7. Persuasion

hard skills that are required to be an investment banker-

What Do Investment Bankers Do? 

Investment bankers play critical roles in the financial world, which immerses them as interfaces between companies and financial markets. Their duties also encompass a wide range of banking products and services that allow customers to source for finance, develop stimulating decisions, and conduct involved transactional activities. In the context of investment banking, their roles can be elaborated as follows: 

  •  Capital Raising: Investment bankers play a critical role in helping companies raise capital through IPOs, bond issuances, or private placements. They organize such deals to maximize the client’s financial status. 
  •  Mergers and Acquisitions (M&A): Investment bankers counsel clients in mergers, acquisitions, or divestitures. They will analyze the financial implications, negotiate terms, and assist in executing strategic transactions such as mergers and acquisitions. 
  •  Advisory Services: They advise clients on strategic financial issues, including capital structure optimization, shareholder value enhancement, and challenges in Venture Capital. This can be done by assessing prospective investments, divestitures, or restructuring projects. 
  •  Risk Management: Investment bankers help clients manage financial risks through hedging strategies for currency fluctuations, interest rate changes, and commodity prices. This allows clients to protect their financial positions under volatile markets. 
  •  Financial Modeling and Analysis: Investment bankers use advanced financial models to evaluate and predict the consequences likely to result from different economic transactions. This involves carrying out valuation metrics, conducting due diligence, and assessing the financial implications of strategic decisions. 
  •  Client Relationship Management: Relationship with clients is one factor contributing to an investment banker’s responsibilities. They prove to be reliable counselors, knowing the needs of customers and coming up with financial solutions customized for specific business goals. 

How long will it take to become an investment banker? 

When wondering how to become an investment banker, it’s often okay to think how long it will take to become one. It usually takes to become an Investment Banker is about 4-6 years. Usually, candidates are recruited after graduation and preferably post-graduation in relevant courses or subjects. 

Eligibility criteria for becoming an Investment Banker 

The eligibility criterion for the role of investment banker varies across sectors and companies. While an FMCG company can be assumed to offer the job to a B.Com graduate, top financial institutes prefer MBA (Finance) graduates. Apart from the educational qualification starting from graduation and going as high as Chartered Accountant, in-depth knowledge of business, finance, economics, and maths can give you an edge over regular candidates with no background in business and finance. This article is going to give an overview of how to become an investment banker.

1. Bachelor’s degree

Finance/Accountancy/Commerce graduates can find entry-level job opportunities in investment banking. For instance, graduates can join as an intern at investment/brokerage firms or joining a bank/financial institute as a Junior Analyst. However, as a graduate, you have to work your way up the corporate ladder through hard work, diligence, and performance. While this might seem like a suitable entry pathway to investment banking, the lack of specialised training, higher qualification, and experience can hold you back from bagging high-profile and well-paying job roles in this domain.

The average salary for an intern in the investment banking/ venture capital/ private equities company is ₹4.9 Lakhs per year). The interns get practical experience in the job. They get to be mentored by the seniors and understand the know-how of the industry. They see how real-life transactions happen, and learn the art of negotiation and persuasion.

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2. MBA (Finance)

MBA (Finance) is one of the widest avenues for entering into the IB Industry. Since this postgraduate course covers all vital disciplines such as business management, accounting, marketing, commercial acumen, finance & financial analysis, it grooms students for an investment banking career. Plus, learners get ample opportunities to network with peers and industry experts. Equipped with an MBA (Finance) degree, candidates can land lucrative roles in banking, financial services, insurance, fintech, and startups.

MBA with finance specialisation is a very strong field of study as it opens many doors to enter into various industries such as investment banking, Research Analyst, Asset Management, Equit Management, Financial Consulting, etc. 

Finance is a domain which is a core of any company, for the same experts and experienced professionals are bestowed with the tasks of  handling the finance portfolio. And this is reflected in the compensation the finance professionals get. An investment banker is supposed to have a very strong finance background.

3. CFA

For a Chartered Financial Analyst, making a way into the investment banking domain is a cinch. Since your educational qualification already opens up the gateway to the IB industry, you can find suitable employment prospects in reputed banks, financial institutes, investment firms, brokerage firms, insurance agencies, and management consultancies.

CFA is not going out of demand in the coming future rather it is going to be the most demanded job profession in coming. The need for financial experts is growing and the same is being reflected in the competitive salary these professionals procure. 

The following hard skills are of importance in the CFA field-

  1. Modelling 
  2. Analytical 
  3. Decision making 
  4. Problem Solving
  5. Mathematical

4. CA

Chartered Accountant is yet another one of the preferred qualifications for working as an investment banker. As a CA, the candidate is well trained in Finance, Money Markets, Equities, Securities, Mergers & Acquisitions, IPO listing, and Law, among others. This helps them to lock and load for working in banking and non-banking institutes as an investment banker.

The scope of a chartered accountant is increasing. The reasons for the demand are many such as startups are coming up in the market, there are more taxpayers and the government is coming with new regulations and policies. So to manage the accounts a CA is entrusted with responsibilities.

The following hard skills are a prerequisite for becoming a chartered accountant-

  1. Accounting
  2. Regulatory Standards
  3. Data Analysis
  4. Problem Solving
  5. Attention to detail

5.Internship:

 Wondering, “how do I become an investment banker?” get your internships straight! There are possibilities of finding investment banking internships on internet job sites, bank websites, campus placements, networking, and recommendations for HR consultancies. Internships in investment banks may last from two months to two years. At the same time, apart from financial training you can learn to acquire better communication, presentation and negotiation skills. If you do well during your internship, you may get a job offer to be an investment banker on permanent terms. 

6.Networking: 

Career networking is a core strategic aspect of career advancement for an aspiring investment banker. Networking entails actively interacting with professionals in the industry by attending conferences, workshops, and money related events.  

 Networking with established professionals allows for gaining knowledge and insights into their experiences and industry trends. Networking improves visibility in the finance world and creates pathways to various jobs and collaborations. A cultivated network can play a vital role in career development and the constant updates on investment banking flow. 

7.Making a Good Impression: 

In the fiercely competitive investment banking field, leaving a good, memorable impression is vital. If you’re thinking about “how can I become an investment banker”, making a good impression is paramount. This goes beyond academic qualifications to developing strong relationship-building skills, communication expertise, and professionalism. Good investment bankers are able to explain complicated financial ideas succinctly.  

 The capability of performing interviews well, presenting ideas convincingly and working harmoniously with fellow employees and clients gives a positive image. The first impression is very important not only during job interviews but also in everyday relations with industry, building trust and suspension. 

8.Licensing: 

In specific regions, licensing requirements can include passing different exams or obtaining certain certifications. To illustrate, in the United States of America, professionals dealing with security transactions must take both Series 7 and Series 63 assessments.  

 Such licenses are necessary to meet the regulatory standards and directives set by financial authorities. The issuance of licenses makes it possible for investment bankers to trade securities legally, provide advisory services, and perform other financial operations. Staying abreast with licensing requirements and acquiring the necessary certifications is essential in dealing with the regulatory environment of investment banking. 

Apart from the educational qualifications, there are certain skills that are needed for becoming an investment banker, such as: 

1. Analytics

Analytics skills are crucial in the investment banking industry. Be it finance modelling or fiscal research, an analytical mind frame can take you places not only during getting recruited but also towards building a progressive career in this field. Thus, it would not be a bad idea to enrol in a short-term Business Analytics certification course.

The skill of data analysis, research, visualisation of data, critical thinking and problem solving constitutes the analytical skills. These are important skills to be had for a professional. It is the ability to segregate the bigger problem statement into smaller categories and then approach these problem statements with a strategy. Investment banking in India and abroad demand these analytical skills.

2. Calculative skills

A job in banking and finance can never be secure until you have strong mathematical skills. Since investment banking experts spend a significant amount of time playing with numbers, calculative skills must be your strong suit.  

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3. Finance knowledge 

From basic accounting like maintaining a balance sheet to creating Profit & Loss statements, investment bankers must be proficient in basic finance skills. Financial knowledge requires someone to be held responsible for multiple tasks such as accounting, financial management, etc. Along with the hard skills certain soft skills are also required such as communication, interpersonal, etc.

4. IT Skills

When we say IT skills, it means IB professionals must be familiar with tools like Excel and PowerPoint. ERP, SQL. It also pays off to have a fundamental knowledge of Blockchain and APIs. Along with the other skills in IT the professionals should also be having skills in data analysis, project management and program management.

Is it hard to become an investment banker?  

Yes, it can indeed be an overwhelming process to turn one into being a professional investment banker. It needs robust educational qualifications, which sometimes have not only a degree but additional certificates like MBA or CFA.  

 The industry requires high analytical skills, financial competency, and a strong thriving in an environment that is dynamic and competitive. It is essential to obtain internships and develop a strong professional network. The work is challenging, and the need for constant learning has to go hand in hand with networking, which makes the road to becoming an investment banker challenging and competitive. Education, the right experience, and networking are often success factors. 

For individuals seeking a dynamic and intellectually stimulating career in finance, investment banking emerges as a beacon of allure, beckoning with the promise of professional growth, substantial rewards, and intellectually challenging work. But before embarking on this exciting journey, it’s crucial to understand the investment banker degree, investment banking courses, how to become an investment banker in India, and the dedication required to navigate this competitive landscape.

 

Unveiling the Allure: Why Pursue Investment Banking?

Investment banking offers a multitude of compelling reasons to attract aspiring professionals. At the forefront lies the unparalleled opportunity for professional growth and advancement. As an investment banker, you’ll be at the heart of high-profile deals and transactions, gaining invaluable experience and expertise in areas like mergers and acquisitions, capital markets, and financial advisory. This exposure cultivates a razor-sharp financial acumen and propels you towards leadership positions within the industry.

Furthermore, investment banking careers are renowned for their lucrative financial rewards. Competitive base salaries are often supplemented by performance-based bonuses that can significantly amplify your earnings. Top performers within the industry can expect six-figure salaries, with bonuses sometimes reaching into the millions. This potential for financial success makes investment banking an attractive proposition for many ambitious individuals.

Beyond the financial rewards, investment banking fosters a dynamic and intellectually stimulating work environment. Constantly challenged to solve complex problems and think critically, you’ll be at the forefront of innovation and deal-making, strategizing solutions for some of the world’s most prominent corporations and institutions. This intellectually rigorous environment keeps you engaged and pushes you to continually expand your knowledge and skillset.

Advantages of Becoming an Investment Banker 

As we mentioned before, investment banking is a lucrative career choice. This is the perfect fit for you if you can envision your typical day to look like this – meeting with high profile clients, working on pitch books, preparing offers, running fiscal projections, and identifying newer avenues for wealth generation. 

The average base salary for an Investment banker in India is ₹11,94,746. Investment bankers can expect a bonus of 40-80%, depending on their organisation’s financial performance per fiscal year. While the initial years in this profession are pretty rewarding, within 4-5 years, the potential of this job increases exponentially. 

Aside from the immediate monetary benefits, there are several other advantages of becoming an investment banker. 

Personal growth 

As you work in this sector, you will realise each day is a learning curve and before you call it a day, there is a new skill, knowledge or expertise under your sleeve. Working in this fast-paced environment will boost your personal growth and help you perform better in every walk of life. The profession of an investment banker brings a lot of added perks to one’s life. The good professionals get hired by good companies with higher salary growth. They can make their career not only nationally but internationally as well.

Professional Potential 

Investment banking offers quick, professional advancement. Most companies reward investment bankers with hefty bonuses and numerous other perks for their performance, hard work and diligence. As networking is a crucial aspect of investment banking, you make many important connections for life.

Investment banking in India brings a lot of potential to one’s career. Professionals having good experience and apparent skillsets can get a chance to enter into the C Suite of a company as well.

Building self-esteem

Once you establish yourself as a credible and trustworthy professional, you will be respected by your seniors, colleagues, clients, and contacts. They will always look up to you for guidance and direction in financial matters. This will serve as a boost for your self-esteem, continually pushing you to do better. 

Charting Your Course: The Prerequisites for Success

While the allure of investment banking is undeniable, the path to entry is demanding and requires meticulous preparation. If you are wondering how do I become an investment banker,  the foundation often begins with a relevant investment banker degree in finance, economics, or a related field. These programs equip you with the core knowledge and analytical skills necessary to navigate the complexities of the financial world.

Investment banking courses, both during your degree and as specialized programs, can further enhance your skillset. Look for courses that delve into financial modeling, valuation techniques, investment analysis, and mergers and acquisitions, providing practical knowledge directly applicable to the industry.

Investment banking courses after 12th are also available for those seeking early exposure to the field. These programs introduce you to fundamental financial concepts and prepare you for the academic rigors of a relevant degree program.

How to become an investment banker in India involves navigating a competitive landscape. Earning a master’s degree in investment banking (MBA) in Investment banking or pursuing professional certifications like the Chartered Financial Analyst (CFA) designation can significantly enhance your candidacy and demonstrate your commitment to the profession.

Getting into investment banking often requires relevant internship experience. Seek internship opportunities at investment banks or financial institutions to gain practical exposure to the industry and showcase your skills and work ethic. These internships can also serve as valuable networking opportunities, connecting you with industry professionals who can provide guidance and mentorship.

Investment banking certification programs like the CFA can elevate your qualifications and demonstrate your in-depth understanding of financial markets and analysis. While not mandatory, these certifications can give you a competitive edge in the job market.

Investment banking courses with placement can be a valuable option, as they often partner with financial institutions to help graduates secure employment opportunities. However, thorough research is crucial to ensure the quality and reputation of such programs.

The Best Investment Banking Courses are those that align with your specific career goals and learning style. Research course content, faculty credentials, and industry partnerships to identify programs that provide the most relevant and valuable learning experience.

The Road Ahead: Challenges and Perseverance

The journey to becoming an investment banker is not without its challenges. Investment banking hours are notoriously long and demanding, often requiring significant overtime and weekend work. This demanding schedule necessitates exceptional time management skills and the ability to thrive in a fast-paced environment.

Despite the challenges, the potential rewards and the opportunity to be at the forefront of the financial world make investment banking a compelling career choice for many. With dedication, perseverance, and the right qualifications, you can navigate the competitive landscape and carve your own path to success in this exciting field.

The right course to become an investment banker 

Aspirants can opt for the following courses to build a fruitful career in investment banking: 

  1. MBA in Digital Finance & Banking

upGrad, along with the O.P. Jindal Global University(JGU), offers an MBA degree in Digital Finance & Banking, nationally recognised and internationally ranked as an Institute of Eminence. This industry-oriented course is suitable for candidates aspiring to work in the finance domain. The university offers a 1-week on-campus immersion program to help aspiring candidates get the classroom experience before admission. Apart from online lectures, students also work on case studies, assignments and participate in offline BaseCamps to gain practical experience. 

  1. MBA Degree from Liverpool Business School with Specialization in Finance

With this course, you can get a dual alumni status – an MBA Degree from Liverpool Business School, UK and PGP in Management from IMT Ghaziabad. Recognised by World Education System (WES), this course is especially suitable for students interested in working abroad. Learners work on more than ten case studies and simulations from Harvard Business Publishing. 

How upGrad MBA(Finance) degrees help?

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upGrad courses are designed to groom students for the finance and banking industry. They get hands-on learning experience delivered by trained instructors from top institutions. Not just that, upGrad ensures that students enjoy real-world exposure by connecting with industry experts and mentors. Each course includes mock interviews, resume building sessions, and 360-degree career assistance to all learners. 

Other courses suitable for the investment banking industry are:

  • Bachelor of Commerce (B.Com) Hons.
  • Bachelor of Arts (BA)  in Finance/Economics
  • Bachelor of Business Administration (BBA) in Finance
  • Chartered Financial Analyst (CFA) Programme

Conclusion

In my experience, I’ve learned that understanding how to become an investment banker is crucial for aspiring professionals. It’s not just about academic qualifications but also about acquiring the right skills and knowledge. Starting with an undergraduate degree in finance or related fields is a good step. Additionally, gaining relevant experience through internships or entry-level positions in financial firms is essential. Networking and building connections within the industry can also open doors to opportunities. Pursuing advanced degrees like an MBA can further enhance your credentials. Ultimately, it’s about dedication, hard work, and continuous learning that will pave the way to a successful career in investment banking. 

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Kamal Jacob

Blog Author
Kamal is an experienced Online marketing consultant with a high degree of expertise in SEO, Web Analytics, Content/Technical planning and marketing.

Frequently Asked Questions (FAQs)

1How can I become an investment banker?

There are a few courses that are helpful for an entry-level job like BCom, Bachelors in Economics and Finance, Bachelors in Business Administration, or CFA. MBA in Finance is the most preferred degree by most top institutions. Apart from academics, the aspirant must be driven, an excellent communicator and be adept at networking. Such an aspirant must also have impeccable research skills and be comfortable working with quantitative and analytics.

2What work do investment bankers do?

Investment bankers are individuals who help companies, organizations and clients manage their financial assets. They help in investment decision-making to increase the value of their investments. In this field, job roles are very structured and hierarchical like from Analyst to managing director. Some of the areas where they work include Mergers and acquisitions, capital markets, private equity, sales, and trading. Thus, they are financial advisory intermediaries who help companies and governments raise money for various uses.

3What is the average salary of an Investment Banker in India?

Investment Bankers earn lucratively. The scope and demand for Investment bankers have also increased due to globalization. The average salary for an investment banker in India is INR10 lakhs per year. It is the most rewarding job and salary ranges anywhere between INR 3 lakhs to INR 70 lakhs per annum, including shared profits and bonuses, depending on the experience, type of work, exposure and name of the company and brand. Digitization coupled with growing technologies has paved an excellent path for the future of Investment Bankers. If you want to start earning in 6 digits upgrade yourself with help of upGrad’s MBA in Digital finance and banking.

4Is investment banking hard?

Nothing great comes easy. To answer if investment banking is easy would be unfair. It is definitely not the most easiest job to be in. It requires attention to work most of the time. The investment bankers are bestowed with huge responsibilities of managing investements, capital funding, equity, etc. Also, they deal with huge clientele. But at the end, they are compensated really good for the hard work they put in. Their job is interesting because everyday does not look the same as they are less chances of monotony in the kind of work they do.

5Can an investment banker make millions?

Investment bankers make a good money. Their salary ranges between 2.0 LPA to 29.0 LPA. Some of the professionals earn more than this as well,that is decided by their experience and skills.

6What is investment banking course?

The investment bankers study finance, financial moddelling, stocks evaluation. And other subjects like macroeconomics, supply chain management, etc. Based upon their choice they could do a certification course or go for a full fledged UG, PG courses as well.

7How do I start a career in investment banking?

To begin a career in investment banking, one needs to have passed ther 10+2, then pursue a UG, PG or Doctorate depending upon the level of education they want to exceed in. Athough pos UG completion they could get an entry level job to gain experience. Also, duirng the UG as well they could get hired as an intern to learn the trade.

8Do investment banks look at GMAT?

GMAT is important to enter into a reputed instituion. The banks would look more at the hard skills and soft skills. They would be looking more into the expeirnece and the skills. But some companies could ask for the GMAT score as well during the recruiting process.

9Is CFA better than CA?

CFA is an option to pursue if one wants to remain in the finance field and find satisfaction in doing the finance related work. But if somoenes wants to spread their area of expertise and interest in the various fields then they could opt to go for the MBA doing specialisation in the finance.

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