How to Become an Investment Banker

From Silicon Valley start-ups looking for funding to large corporations managing mergers and acquisitions, businesses of all sizes rely on investment bankers to grow and scale. If you want to be part of this fast-paced finance world, exploring how to become an investment banker is the first step.

Investment banking is a growing, global industry ripe with opportunity for finance professionals. In 2023 alone, the industry is anticipated to total $339.4 billion in revenue worldwide, according to data from market research firm IBISWorld.

As an investment banker, you can help businesses, organizations and governments identify and manage investment opportunities and play an important role in the global economy.

“Investment bankers raise capital and facilitate complex financial transactions that can include mergers, acquisitions and initial public offerings (or IPOs),” said Gary Simmerman, an adjunct finance faculty at Southern New Hampshire University (SNHU) and a CERTIFIED FINANCIAL PLANNER^® with more than 30 years of experience in the financial services industry.

If you’re ready to start your own career in the growing investment banking field, start by learning more about the industry and the steps it takes to get the job you want.

What is Investment Banking?

Investment banking professionals combine financial services expertise and strong analytical skills to help their clients raise capital, navigate mergers and acquisitions and manage other complex transactions.

As an investment banker, you might work for a major investment bank or with corporations, governments and even individuals looking to raise capital, said Simmerman.

Put simply, investment bankers connect businesses that need money with investors who can provide funding, according to the U.S. Bureau of Labor Statistics (BLS).

Investment bankers can also help companies opening for public investment navigate the IPO process. Investment bankers estimate a company’s worth and ensure all legal requirements are met before it can become publicly traded, according to BLS.

Corporations going through mergers or acquisitions also rely on the support of investment bankers, who help ensure that these complex transactions go smoothly.

What Does an Investment Banker Do Day-to-Day?

Your daily responsibilities as an investment banker can vary depending on where you work and the type of clients you support. But there are some standard tasks most investment bankers can expect to do regularly, said Simmerman.

According to Simmerman, these include:

• Building and maintaining relationships with clients, investors and other financial services professionals
• Developing financial models
• Meeting with prospects and clients
• Performing financial analysis and research
• Preparing pitches, presentations and management reports for clients and other key stakeholders

If you want to join the investment banking world, building strong technical skills and soft skills like communication and critical thinking will be key.

What Does It Take to Become an Investment Banker?

If you’re exploring how to become an investment banker, the best place to start is with the right education and training.

Earn a Finance Degree

According to Simmerman, investment banking jobs typically require a minimum of a bachelor’s degree in finance or a related field, such as a bachelor's in accounting or a bachelor's in business administration. 

What Degree is Best for Investment Banking?

Simmerman said that while it’s possible to get into investment banking with an accounting or business degree, a finance degree will give you the best chance of landing the job you want.

“If someone hasn’t started their education yet and their goal is a career in investment banking, a finance degree is the best option,” he said.

By earning a bachelor’s degree in finance, you can build the technical and soft skills needed for success in the fast-paced investment banking field. A finance degree program typically includes courses on topics such as:

• Corporate finance
• Financial markets
• Financial regulations and ethics
• Fundamentals of investments
• Investment portfolio analysis

Many finance degree programs also include hands-on learning opportunities that can help you apply your knowledge to real-world situations.

Do You Need an MBA to Be an Investment Banker?

Simmerman said that while many job opportunities are available in the investment banking field for bachelor’s degree holders, some firms may require a master’s degree in finance or a Master of Business Administration (MBA) — even for entry-level positions. At other companies, an MBA may only be needed to move up to leadership roles, he said.

Earning an MBA in Finance can provide advanced training in financial management and help you develop solid investment strategies. MBA programs also focus on leadership, ethics, innovation and big-picture thinking, which can give you the experience you need to land more advanced positions within investment banking.

Get Real-World Experience

In addition to completing a finance degree, Simmerman said that gaining real-world investment banking experience is a great way to stand out against other candidates when applying for jobs.

“It will be very beneficial to have completed an internship or multiple internships to be able to obtain even entry-level positions,” Simmerman said.

While many finance degree programs include required hands-on learning, seeking internships and even entry-level positions with investment banking firms can help give you valuable experience that employers are looking for.

Obtain Professional Licensure

To work as an investment banker, you must also register with the Financial Industry Regulatory Authority (FINRA) and pass a series of licensing exams, said Simmerman.

According to FINRA, you must pass the Securities Industry Essentials® (SIE®) exam and the Series 79 exam to become a registered investment banker with the organization.

The SIE® Exam is an introductory-level exam that assesses basic knowledge of the rules, regulations and prohibited practices for jobs in the securities industry, FINRA said, which includes buying and selling stocks, bonds and other forms of financial investments.

The Series 79 exam — the Investment Banking Representative Exam — assesses more advanced knowledge and skills an investment banker needs, including advising on debt or equity securities, public offerings and mergers and acquisitions, according to FINRA.

Depending on your specific job or the firm you work for, you may have to pass additional FINRA exams. However, many of these credentials can be obtained while on the job, Simmerman said.

“It’s typical to actually earn them while you’re working,” Simmerman said. “There is a cost involved and a study period and it’s fairly typical for financial firms — when they bring on new hires that don’t already have those licenses — to pay for the training and pay for them to take the exam as part of their onboarding.”

Do You Need a CFA for Investment Banking?

A CFA®, or Chartered Financial Analyst®, is a professional qualification from the CFA Institute that demonstrates expertise in financial analysis, investment and ethics. Becoming a CFA is not required to work as an investment banker, Simmerman said, but it can be very beneficial to a finance career.

“The most important skill set for investment banking is the ability to analyze financial data,” he said. “The CFA demonstrates that you have strong financial analysis skills.”

How Long Does It Take to Become an Investment Banker?

The path to starting a career in investment banking can be as short as just 4 years — the typical length of a bachelor’s degree program. Depending on the specific job you want, more time may be needed to complete a master’s degree program or professional registration exams. However, you may be able to complete these credentials while working in the field.

Is It Hard to Be an Investment Banker?

While it doesn't take long to get started in the investment banking field, the industry is competitive and being an investment banker can be stressful, said Simmerman. Still, the benefits often outweigh the negatives for workers in this field.

“In terms of investment banking as a career, it’s definitely high-stress, high-reward,” he said, “The compensation can be lucrative, but you can expect to work very long hours to earn that compensation.”

Career Opportunities in Investment Banking

There are many diverse job opportunities within the world of investment banking, said Simmerman. And depending on where you work, your title can vary significantly. Workers with the title of financial analyst or research analyst, for example, could both be investment banking professionals within their company, he said.

Where you work throughout an investment banking career can also vary. While many investment bankers work for large investment banks like Goldman Sachs, JPMorgan Chase and Morgan Stanley, others may work for smaller boutique investment banks or even mutual fund companies and insurance companies, Simmerman said.

Salary Potential

No matter where you work, there is strong earning potential in the investment banking field.*

According to BLS data, financial and investment analysts earned a median salary of $95,080 in 2022.* Sales agents working in securities, commodity contracts and other financial investments earned a median salary of $91,420 that same year, BLS reported.*

According to BLS, many investment bankers also have opportunities to earn substantial bonuses, which may even exceed their base salary.*

Career Growth Opportunities

In addition to great earning potential, growing job opportunities are part of what makes investment banking such an in-demand field.

According to BLS data, employment of securities, commodities and financial services sales agents is projected to grow 7% from 2022 to 2032, higher than the national average.* Employment rates for financial analysts could grow 8% and jobs for financial managers will increase by 16% during that same time period, BLS reported.*

Still, Simmerman said that while there are a lot of opportunities available for incoming investment bankers, there are even more applicants. Pursuing further education could be key to standing out in this competitive field, he said.

“If you’re trying to break into the field with a bachelor’s degree and not having success, the MBA as an additional degree or earning the CFA as a certification could be very helpful in opening doors,” Simmerman said.

*Cited job growth projections may not reflect local and/or short-term economic or job conditions and do not guarantee actual job growth. Actual salaries and/or earning potential may be the result of a combination of factors including, but not limited to: years of experience, industry of employment, geographic location, and worker skill.

Danielle Gagnon is a freelance writer focused on higher education. Connect with her on LinkedIn.

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