High salaries and long hours are the hallmarks of the investment banking industry. After all, keeping on top of the world’s financial markets can be an almost 24/7 job, especially in a down economy. But the financial rewards-not to mention being a part of some of the big-name business deals that you see in headlines-can make the grueling hours an adrenaline-based rush.
Investment banking isn’t one specific service or function. It is an umbrella term for a range of activities: underwriting, selling, and trading securities (stocks and bonds); providing financial advisory services, such as mergers and acquisition advice; and managing assets. Investment banks offer these services to companies, governments, non-profit institutions, and individuals.
REQUIREMENTS First, if you’re an undergraduate, you’ll want to try to get an internship: it’s the best way to secure an eventual offer. If you’re an undergraduate from an Ivy League school with a great GPA, bidding recruiting points is still a favorable option-however, college recruiters are usually sent from the prestigious bulge-bracket firms, and not the smaller, specialized niche firms or boutiques. It’s important to discern the type of bank for which you are best suited, so conduct your own independent research. Big firms tend to have more turnover than smaller niche firms, which may better nurture their investment in training you.
If you’re not an Ivy League graduate, and recruiters haven’t been breaking down your door, networking is your best bet. Use your school’s alumni network LinkedIn connections, and your neighbors and acquaintances to get in touch with someone at the I-bank of your choice. If you’re a good student who is truly interested, you’ve got a shot.
If you have an MBA or other advanced business certification, you’ll be paid more for a position than someone with a BA. But those with prior experience always get first shot, so be sure to get an internship. Industry expertise and prior corporate finance work can also be a way in, but you’ll have to be patient.
If your degree isn’t in business, take heart in the knowledge that banks are increasingly encouraging applications from candidates with specialized resumes in order to better appeal to a growing client base.
JOB OUTLOOK Undergrads and MBAs from top schools are recruited for a number of openings that is small even in the best of times-so you can imagine what the meltdown of a number of banks on Wall Street means for those seeking a banking gig. Competition is fierce, so if you’re not from a top-tier school, you may need to be more resourceful and persistent than those who are. Again, doing an internship in investment banking is essential to breaking into the field in today’s business environment. Networking is key; make use of your alumni network.
A few places hopeful investment bankers should consider looking for opportunities are boutique firms, healthcare organizations, and firms based in Asia and the Middle East, as well as specialties such as risk management, restructuring, and financial planning/wealth management.
The position you’ll start at obviously depends on your education level. Undergrads vie for two-year positions as analysts. If you do well, depending on the firm, you may get to stay for a third year, perhaps even abroad. MBAs compete for fast-track associate slots, and international assignments may be available for those who want them.
Midcareer people are recruited by headhunters or hired on an ad hoc basis for positions at various levels. Though relatively few people come into the industry from other fields, it can be done, especially by those who have a technical background in a specific industry and an aptitude for and interest in finance. Otherwise, expect to start at the bottom.