There are a myriad of careers within the banking industry, one of them being a career in investment banking. The job of an investment banker is to essentially help banks to acquire new funds. Investment bankers also thoroughly study the market, and give investing advice to banks and other companies around the globe.
Investment Banking Job Responsibilities
An investment banker will work to generate funds for banks in two different ways. First, the investment banker will produce funds by selling stock within their company. This stock can be sold to employees, corporations or other individuals. The other way investment bankers acquire funds for the bank is by seeking out venture capital. This means that they give money to a starting or growing business in exchange for partial ownership of the company. The company will use this money to grow their business, using the funds to create products, advertise the business and conduct research. A portion of the company’s profit will continuously go to the bank as long as the bank owns stake in the company. The investment banker will decide when and if to sell their stake in the company.
An investment banker must know all about the trends that have an impact on the investment industry. They must have a deep knowledge and understanding of how government regulations, policies and economic trends affect the investment industry as a whole. Investment bankers must know how to assess risks, and how to limit financial losses of the company and individuals that they represent.
Effective communication is essential for investment bankers. They must know how to present investment information to individuals, corporations and business owners all over the world. Lots of consulting is required as well as extensive travel in many cases, which is why many consider this job to be exciting. Investment bankers meet with clients all over the globe in order to develop business deals and investment deals. Stellar interpersonal and communication skills are a must.
Training and Education Requirements
The minimum requirement for an investment banker is a bachelor’s degree. However, most employers will not consider hiring an investment banker without a master’s degree unless they have extensive experience and a superior skill set. An MBA or a degree in finance, banking, investing or accounting is generally required. Candidates must have superior math skills and must have knowledge of banking procedures, economics, risk evaluation and risk management.
Candidates must also be extremely detail oriented and self motivated. This position generally requires employees to work and travel independently. Candidates must be self-starters, self disciplined and extremely open minded as they will regularly be interacting with people from a variety of different cultures.
Investment Banking Salary and Wages
The average starting salary for an investment banker with no experience is $60,200 per year. This is a base salary as investment bankers get substantial bonuses. It is possible for a junior investment banker to earn $90,000 to over $100,000 in their first year after bonuses. The median salary for an investment banker is $162,000 per year in the United States. This is a base salary as well and does not include bonuses. The majority of investment bankers with 5 or more years of experience earn well over $200,000 per year as a base salary.*
*According to the BLS, http://www.bls.gov/oco/
Bonuses generally equal three to four times the base salary of an investment banker. With bonuses included, the majority of investment bankers will earn well over $500,000 per year. There are many investment bankers who become millionaires after just a few years. There is generally a cap on the base salary; however, there is no limit to the amount of bonus money that an investment banker can receive.*
*According to the BLS, http://www.bls.gov/oco/
Certifications and License Requirements
There are no licenses required to become an investment banker. However, many in the investment banking industry have a strong desire to advance their knowledge and expertise in a particular area. There are many certification courses available nationwide which will allow those in the investment banking to enhance their knowledge and skills. The banking industry is always changing; therefore, there is always something new to learn.
Many schools offer courses where graduates can receive a certificate in investment banking. There are also advanced certifications available in the investment banking industry. The certification courses cover topics related to debt, financing, public offering, corporate restructuring of businesses, joint ventures, business mergers, global relations, alliances, derivatives, securitizations and a host of other topics that directly impact investing around the globe.
Middle Market Investment Banking Association (MMIBA) is an organization that is designed to educate investment bankers and corporations in small and middle markets. They provide education in person and on the web, and give members access to resources that will help small and middle markets to enhance their knowledge on mergers and acquisitions so that they can tap into larger markets.
The National Investment Bankers Association (NIBA) is an organization that has regularly scheduled conferences designed for those in the investment banking industry. They exchange information, ideas and network with one another. NIBA also discusses issues impacting the industry as a whole and gives members solutions on how to deal with certain situations and problems that arise within the industry.
NIBA also has a myriad of products and services available to those looking to enhance their professional knowledge. NIBA has been around for over 26 years and is a not for profit organization set up specifically for those in the banking and investing industry.