Investment bankers work for financial institutions, matching businesses that need capital with investors who will provide funds in exchange for equity in the company. As sales agents, investment bankers underwrite both sides of the deal, helping companies issue new stock and then finding investors to buy the stock. Investment bankers may also assist companies in selling bonds, which operate like loans that are repaid with interest.
Additionally, investment bankers play a substantial role in introducing new companies to the market and advising both sides during a merger or acquisition. Most major investment banks are located in New York City, with smaller investment banks located in cities through the United States.
Entry-level investment banking positions require a bachelor’s degree in business, accounting, economics or finance. However, candidates with a master’s in business administration may get preference and start out with more responsibilities, higher salaries and even signing bonuses. Applicants with a bachelor’s degree generally start out as analysts, while graduates of MBA programs are often hired as associates.
Investment bankers are also required to register with the Financial Industry Regulatory Authority, which involves passing two exams and then taking continuing education courses to maintain registration. Most companies help new employees with preparation for the exams and offer extensive on-the-job training. Investment bankers can also earn their Chartered Financial Analyst credential, which requires a combination of work experience, schooling, and the completion of three exams.
Investment bankers work closely with both stockowners and investors, helping companies to expand and increase profits and assisting investors in making money through partial ownership in the company (stocks) or interest paid on loans (bonds).
Investment bankers should have experience in performing the following tasks:
Investment bankers work long hours, including nights and weekends, in high-stress and fast-paced environments. Individuals working on major acquisitions and mergers may travel extensively.
According to the Bureau of Labor Statistics, employment in investment banking is expected to increase by 9% through 2018.
In a May 2008 government report, the average salary for an investment banker was just over $68,500, with the median salary ranging from $40,500 to $122,000. Most investment bankers work on commission, with the potential for receiving large bonuses to supplement their base income.