The question I get pretty frequently is “How to become an investment banker?” To become an investment banker, one needs three things: a relevant academic background, certification and licensing, and relevant experience in the industry. 

It’s a journey that has to be taken; you need the ability to assess investment opportunities, communicate with your clients, and inform them using data to make informed decisions.

One can ask, “Is an investment banking career worth it?” Yes. According to IBISWorld, as of 2023, there are 118,794 people employed in the investment banking and securities dealing industry in the US.

It’s a lucrative industry. But there is one thing you need to know. Becoming an investment banker doesn’t happen overnight; you need career guidance so that you get it right from the beginning.

That’s why in this article I’ve put together a complete and easy-to-follow guide for anyone interested in becoming an investment banker.

Ready to learn? Let’s get started…

Who Is an Investment Banker?

As I stated in the introduction to this guide, an investment banker is responsible for undertaking the following things:

• Act as a financial advisor to their clients
• Help to price capital for their clients
• Allocate resources
• Manage investments
• Mergers 
• Acquisitions 

In this case, clients can be drawn from either of the following: companies, a collection of agencies, private firms, governments, or investors.

Investment bankers use industry expertise, analytical prowess, and effective communication skills to help investors and companies make informed economic decisions.

Do you find this interesting? I bet you do. In that case, let’s look at the steps to becoming an investment banker.

What Are the Steps to Becoming an Investment Banker?

Your formal education and early work experience play a great role in shaping your journey into the investment banking industry.

For instance, one needs an undergraduate or graduate degree in business administration, finance, commerce, economics, or an analytical field like statistics to qualify.

Another thing that investment banks look for is previous financial advising, financial management, trading, or general business consulting experience. 

To summarize this section, there are generally three steps you can take to become an investment banker (and each one of those will be discussed in the subsequent sections).

Step 1: Secure an entry-level position

You can begin your career in investment banking immediately after you finish your undergraduate or graduate program. All you need to do is ask to volunteer or intern at an investment bank. 

This will introduce you to the basics of the industry and give you the ability to apply some of the skills you’ve learned in college. In some other cases, it is possible to come across an investment banking analyst job opportunity; don’t turn a blind eye to it.

Step 2: Complete advanced education and training

Let’s be upfront. While your undergraduate degree (in a relevant field) can secure volunteer opportunities, internships, and entry-level jobs, that’s not enough to move the needle. 

You need to go for MBA programs that will equip you with in-depth content in specific investment areas needed to practice financial analysis and investment management.

Step 3: Earn additional certifications

This area is a bit underrated, yet it makes the whole difference. While your colleagues might have good grades and gleaming degrees, it’s becoming more advantageous to have additional certification. 

It shows your commitment and preparedness for the industry. For instance, my online course Breaking Into Wall Street (BIWS) is dedicated to helping individuals break into any finance-related career without “selling their souls.”

What Education and Qualifications Are Required to Become an Investment Banker?

To become an investment banker, you’ll need a strong academic background and relevant work experience. 

Let’s explore the educational and professional qualifications necessary to become an investment banker.

So, let’s dive into the steps to becoming an investment banker:

1. Education:

A bachelor’s degree in finance, accounting, business, economics, math, or another banking-related discipline is necessary for entering the investment banking industry.

2. Entry-level job:

After graduation, secure an entry-level job in the investment banking industry. This could include positions such as an analyst, associate, or investment banking intern.

3. Graduate education:

Pursue graduate education by obtaining an MBA degree from a competitive university. This will provide a competitive edge in the job market. On top of that, you’ll also gain more skills that will help you carry out more tasks in the industry.

4. Investment banking job:

After graduate school, seek employment as an investment banker in a top investment banking firm. You need to fill in as many applications to increase the chances of entering into a top investment banking firm of your choice.

5. Continuing education:

Consider continuing education or specialization in areas such as finance, accounting, or business law to remain competitive in the investment banking industry.

The next step is to gain relevant work experience to become an investment banker. Let’s dive into it.

How Can One Gain Relevant Work Experience to Become an Investment Banker?

There is no shortcut to it. Experience in the investment banking industry is necessary these days. 

Let’s look at some of the avenues I can recommend for anyone who wants to gain work experience:

• Get the right education
• Get a volunteer opportunity in an investment bank
• Complete  two or three internships
• Join professional bodies relevant to the investment 
• Always be networking
• Build an aligned, banking-specific online presence (e.g. starting a blog or consultancy)

You need to get it right if you want to break into investment banking. If you implement the key areas I’ve highlighted above, it will be a new dawn for you.

What Skills Are Essential for Success in Investment Banking?

Skills are important in any finance career that you can think of. In fact, they’re the most sought-after indicators in resumes and CVs by hiring managers. 

Here are the top skills you need in the investment banking industry:

1. Analytical skills: 

You need analytical skills to observe and analyze sets of economic data that inform investment decisions.

2. Attention to detail:

As an investment banker, you can’t afford to make a mistake; it will cost businesses millions of dollars in investment and profits. That’s why hiring managers want guys who can work in a stressful, unpredictable environment that exhibits a lot of change in trends.

3. Confidence:

All investment bankers need to be good at persuasive communication and articulate facts with confidence. This is the art that secures investors’ deals and provides companies with funding.

4. Decision-making:

As an investment banker, you will be tasked with making critical decisions for your firm. It’s therefore essential to be able to predict and withstand trends that determine investments made by clients.

5. Math skills: 

Math, accounting, and analyzing are typical responsibilities undertaken by investment bankers. You need knowledge of economics to be able to break down facts, numbers, and data on behalf of clients and present them in a simple-to-understand format.

6. Knowledge of ethics and compliance:

It’s important for investment bankers to have a clear understanding of legal requirements in their undertakings. Ethical investments are a key priority for most of the investors in the industry, and so is the skill that can guarantee the safety of their investment.

There are far more other skills than these, most of which you will be taught in your various degrees. However, the most important skill is the ability to apply the basic skills you learned in college in real life. That will make a difference in your career.

What Are the Typical Job Roles and Responsibilities of an Investment Banker?

The job description of an investment banker can include a wide range of duties. And all the duties and responsibilities depend on their role and the company they’re working for. 

Some of the typical job roles and responsibilities are:

1. Capital raising

Capital raising refers to the process of raising funds for a company or project, typically through the issuance of securities such as stocks or bonds.

2. Book building

Book building is the process of generating demand and determining the price of a security or offering by contacting potential investors and gauging their interest.

3. Prospectus drafting

The process of drafting a prospectus involves creating a document that provides information to potential investors about a security or offer, including financial information and other relevant details.

4. Investment meetings

Investment meetings bring stakeholders together to discuss potential deals and opportunities, with the goal of finding common ground and moving forward with transactions.

5. Corporate restructuring

Corporate restructuring refers to the process of changing a company’s organizational structure or financial operations to improve efficiency, reduce costs, or increase profitability.

6. Issuing and selling securities

This involves the process of creating, pricing, and selling securities such as stocks, bonds, or other financial instruments to raise capital for a company.

7. Initial Public Offerings (IPOs)

IPOs refer to the process of issuing shares of a private company to the public for the first time, allowing the company to raise capital and become publicly traded.

8. Private placement of capital

Private placement of capital refers to the process of raising funds from private investors, such as institutional investors or high-net-worth individuals, rather than through the public markets.

9. Debt and equity advisory services

This task involves advising clients on how to structure and raise capital, whether through debt or equity financing and providing guidance on other financial matters.

10. Mergers, acquisitions, and divestitures

Mergers, acquisitions, and divestitures involve the buying, selling, or combining of companies or assets with the goal of achieving strategic or financial objectives.

11. Bond issuance and pricing on bond markets

This involves issuing bonds to raise capital and determining the price of those bonds based on market conditions and investor demand.

12. Hedge fund, mutual fund, and pension fund advisory services

This task involves providing guidance on investments, risk management, and other financial matters for these types of investment vehicles.

If you’re serious about pursuing a career in investment banking, then brace yourself for the above roles. Most importantly, be a hands-on person who is excellent in your undertakings in any of the above roles.

What Is the Recruitment Process for Investment Banking Jobs?

In the previous sections, we looked at some of the qualifications and skills you need to become an investment banker. Additionally, I have also highlighted some of the typical responsibilities of an investment banker. 

Is investment banking worth it? If yes, in this section, I’ll take you through the recruitment process. Let’s get right into it.

First, let me start with the honest truth. The recruitment process in the investment banking industry is among the most competitive in the world. Therefore, you need to start preparing early for the rare opportunities as they arise.

Here are the three recruitment avenues:

1. Internships

Internships offer on-the-job experience and practical skills training that many banks need for their employees. 

The hiring managers retain the best-performing interns and offer them full-time jobs after graduation.

2. Full-time

If you really impress the recruiting banks through direct job applications or internships, you can be guaranteed a spot as a full-time employee of the investment banks.

3. Off-cycle recruiting 

If you have graduated from university, graduate school, or business school, the best way to get into investment banking is by targeting small and mid-market investment banks that hire on demand.

How Can One Prepare for Investment Banking Interviews?

Normally, investment banking is the most rigorous exercise in the market. Employers are looking for the right skills and individuals to advance their agenda in the industry.

Since the competition is fierce, there are a few things you can do to stand out from the crowd.

A background study of the investment bank that wants to hire you is the first step in the right direction. Secondly, ensure that your resume or CV highlights your key achievements. Additionally, it should also reflect on how you can leverage your experience to help them achieve their targets. 

Finally, the hard truth about investment banking is the interview process—it’s a rigorous one. I recommend that you follow my guide on investment banking interview questions.

Whether you are looking to break into investment banking or you have booked an interview with the hiring panel, you need to enroll in the Breaking Into Wall Street (BIWS) course. 

The course uses real-life modeling tests and interview case studies to give you an unfair advantage in investment banking interviews—and a leg up once you win your offer and start working.

What Are the Potential Career Paths for Investment Bankers?

Just like in any finance career, if you want to break into investment banking, you will definitely start in junior roles and advance to senior roles. In a typical hierarchy of roles, here is the career path you can expect:

1. Intern or summer intern:

Interns are typically college students seeking to gain experience in the industry. They may be responsible for helping analysts and associates in research, report writing, and data presentation.

2. Analysts:

Analysts are entry-level professionals who perform financial analysis and modeling for transactions on behalf of clients or their firms.

3. Associate:

Associates manage the analyst team and are responsible for leading deal execution on behalf of the companies. 

4. Vice President (VP):

Vice Presidents oversee multiple transactions and play a critical role in business development.   

5. Director or Senior VP (SVP):

Directors or Senior VPs have a leadership role in managing teams and generating revenue.  

6. Managing Director (MD):

Managing Directors are the highest-ranking professionals in investment banking, responsible for setting the overall strategy and leading the most complex and high-profile deals.

Each role in the investment banking career path above has its own set of responsibilities and requirements for advancement. 

To start on this path, one can apply for internships or entry-level analyst positions and develop the necessary skills and experience to progress to more senior roles.

Applications for internships or entry-level positions can be made through job boards, career fairs, or directly on the websites of investment banks.

To make it quickly into the industry, candidates should strive to build relationships with professionals in the field and attend relevant events to increase their chances of being noticed by potential employers.

What Are Some of the Major Investment Banks That Hire Entry-Level Analysts?

To give you an eye into the investment banking industry in the United States, here are some of the banks that can absorb you (if you have the right skills):

• Goldman Sachs
• Bank of America
• JP Morgan
• Barclay’s
• Nomura Holdings
• Morgan Stanley 

The list of top investment banks is quite long, but, definitely, the choice of which investment bank you want to work for depends on your own decision.

How to Become an Investment Banker: Frequently Asked Questions

1. What is the importance of financial modeling and valuation skills in investment banking?

Your job as an investment banker is typically to model financial situations, predict changes, and identify valuable assets to inform investment decisions.

2. How can one stay up-to-date with the latest trends and developments in the investment banking industry?

Being up-to-date with developments in any industry is important. All you need to do is subscribe to and follow trustworthy news channels about investment banking, like the Financial Times and many others, and read articles and reports from the industry.

3. How important is networking in the investment banking industry?

Networking is at the core of investment banking because you rely on the networks that you have to build a base for your clients and their businesses.

4. How long does it take to become an investment banker?

It can take you at least five years of experience in a finance-related field to become an investment banker. 

5. What kind of compensation can I expect as an entry-level investment banker?

According to Glassdoor, your compensation as an entry-level investment banker starts anywhere from $97,712 per year and might go up depending on your role, employer, and performance.

6. What are the challenges faced by investment bankers, and how can I prepare myself for them?

There are many challenges you can face as an investment banker, but the major ones include constant upskilling, demanding schedules, and shifts in market trends. To prepare yourself for them, I find going for additional education, passionately studying the market, and building networks helpful.

7. How can I become an investment banker with no experience?

It’s possible to get into investment banking without experience. For a definitive guide, you can read our article on how to break into investment banking with no experience.

Conclusion: What’s the Way Forward?

It is possible to become an investment banker, provided that you’re determined to pursue the career. 

The best way to get started is by pursuing relevant academic backgrounds in finance, getting the best certifications, and building a wealth of experience.

You also need to have relevant skills and network your way into your dream company or job. And since it’s a rewarding career, remember to put your best foot forward.

By following the guide above, it’s my wish that you can become whatever you want to be in life. It’s possible. Go for it.