Investment banking is a unique operation that helps customers, individuals, and organizations raise capital and provide financial consultancy guidance. They also assist their clients in managing their various financial assets, such as Debt Funds, Real Estate, Equity Funds, and many more. They are between the investors and security issues enabling the latest enterprise to become public. They buy all the available shares at a price and then resell those shares to the public or their client's shares and make a commission on each share sold.  

Several young, aggressive, ambitious finance students are attracted to the investment banking career path because it offers appealing compensation, a better lifestyle, global exposure, and industry knowledge. This industry also serves as a starting point for more lucrative and prestigious careers, like venture capital, private equity, and wealth management. 

In this article, let’s understand how to get into investment banking, investment banker job roles and responsibilities, salaries, and more. 

How to get into Investment Banking? 

If you are clueless about how to get into investment banking, then know about the following factors before entering this industry. Though it is not a tough nut to crack, surviving might be. Educational prerequisites and skill sets are a must to excel in this industry.  

• Prerequisites 

The educational prerequisites include a bachelor’s degree in finance, economics, business, or related subjects. However, many consider pursuing an MBA for a smooth entry into this lucrative industry and to ace their investment banking careers. Many candidates also come from engineering, mathematics, or computer science backgrounds. To acquire various securities licenses, especially in the US, one must pass tests such as Series 79, Series 63, and Series 7. 

• Get an extra qualification

Doing investment banking courses provides more knowledge and will be an added advantage. Enrolling in industry-relevant programs helps to boost one’s investment banking career. These certifications build one’s intellect and problem-solving skillset to make an individual a perfect fit to join a reputed investment bank. These also give overall knowledge of the intricacies of this industry and to land a high-profile job. 

• Skillset 

Knowledge in core financial skills like financial modeling, Mergers and Acquisitions (M&A), Initial Public Offerings (IPOs), stock prices, and other transactions are very beneficial. Crucial skills include communication, negotiation, deal-cracking, persistence, networking, and more. 

• Knowledge of Industry  

Stay updated with the latest industrial trends, market news, and the financial well-being of organizations. Knowledge of ongoing and upcoming events and industry dynamics, like the latest mergers and takeovers, is crucial. 

• A well-structured Resume/CV

A lot can happen with the resume presentation during an interview or while applying for a job in this industry. Most of the hiring takes place online. And hiring managers look at the resumes only for a few minutes. It is good to highlight certain traits with bullets, font size, and formatting: 

• The name and reputation of the university or business school one has completed a bachelor's and master's degree. 

• Academic performance like GPA  

• Previous organizations one worked at and the positions they have held 

• Industry recognized qualifications like certifications and courses 

Job Role of an Investment Banker 

An investment banker produces outcomes for their clients for decision-making purposes. They also offer facts and give investors in-depth insights to make the right choices. They educate the clients and persuade them. 

• Helps corporations to raise funds by making them public by selling an organization’s share in the stock markets in the form of Initial Public Offerings (IPO). 

• Performs financial modelling to get an organization’s market valuation before it goes public.  

• Determines the optimum stock price for the organization entering IPO to avoid under subscription.  

• Gives expert assistance to businesses across various industries related to M&A deals.  

• Undertakes activities for a client to raise capital through issuing securities like debt or equity. 

• Possess strong communication, acumen ship, and network to reach out to.  

• Analyzes financial data to support their capital generation.  

• Assess the transactions and financial activities for the performance of bonds, stocks, and the value of the securities. 

Responsibilities of an Investment Banker 

An investment banker is an expert professional providing financial services to organizations, governments, and investors. They help enterprises get business loans, issue stocks and bonds, set prices for securities, raise stock capital, allocate resources, negotiate mergers, and manage investments. 

• Building different financial models to value debt and equity for M&A and capital raising transactions. 

• Provide recommendations related to product servings, private equity transactions, M&A, and valuations. 

• Performing several valuation methods like comparable companies, precedents, and DCF. 

• Conduct preparation and evaluation materials in the financing of clients, like investment memoranda, management presentations, and pitchbooks. 

• Enhance relationships with new and existing clients to expand the business. 

• Undergo due diligence, research, analysis, and documentation of ongoing transactions. 

• Make presentations for client portfolios. 

• Interest in the latest events, critical industrial issues, and relevant market news. 

Investment Banker Salary 

The average base salary for an investment banker is USD 83,660 per year. In the larger banks, this may be more. During the first year, bankers get more bonuses based on their performance. The base salary is part of the compensation package, with bonuses as standard practice in some cases double or triple the base salary. In the future, there will be a 10 – 15 percent increase in the bonuses based on the deal activities. 
| Read More: Investment Banking Salary Guide

Wrapping Up 

Investment banks play a crucial role in enterprises and government entities to generate capital financing. An investment banker is a financial advisor to their clients, helping to get price capital, allocate resources, and manage investments. Their job is highly valued because, without them, it is very tough for organizations to get the money they require to serve the customers and clients purposes to build a competitive position in the market.