CareerExplorer’s step-by-step guide on how to become an investment banker.
Is becoming an investment banker right for me?
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There is no investment banking Bachelor’s Degree program that teaches the specifics of the profession and lays a foundation for progressing within it. Therefore, aspiring investment bankers must opt for an undergraduate degree in a related, though more general, field like [finance](https://www.sokanu.com/degrees/finance/, economics, or accounting. Relevant curricula include macroeconomics, microeconomics, personal finance concepts, international business practices, business strategy, business law, financial markets, and more.
While not every successful investment banker has been educated at one of the world’s most prestigious institutions, it is worth mentioning that investment banks commonly recruit from the best colleges and universities around the globe. In the U.S., they often target the Ivy League schools: Brown University, Columbia University, Cornell University, Dartmouth University, Harvard University, Princeton University, University of Pennsylvania, and Yale University. In Great Britain, the perennial leaders are the London School of Economics (consistently the top choice), University College London, Cambridge University, Oxford University, and the University of Warwick.
Internship / Employment
Even before completing their undergraduate degree and landing an entry-level position, some aspiring investment bankers secure summer internships. It is quite common for the top investment banks to recruit interns from top business schools and ultimately fill their junior positions with interns who have worked with them. The leading investment bank internship programs are both coveted and competitive. However, smaller investment banks located outside of financial centers like New York, London, and Hong Kong also hire interns. Where investment bank internships are not available, those at retail banks – while not as beneficial or prestigious – still provide a valuable learning experience.
After earning their Bachelor’s and before moving on to graduate school, most prospective investment bankers get professional experience as a financial analyst. In this entry-level role, the market conditions research they perform allows business leaders to make informed buy and sell decisions. This kind of working experience is a universally accepted prerequisite to earning the title of ‘investment banker.’
Click here for an informative and insightful article on the realities of finding an investment banking position.
Once they are employed, investment bankers must register as a representative of their bank with the Financial Industry Regulatory Authority (FINRA). FINRA is an independent industry body that develops and administers licensing procedures in association with the Securities and Exchange Commission.
Depending on their job responsibilities, investment bankers must pass an examination on a specific ‘series’ in order to qualify for registration.
Master of Business Administration (MBA)
In the field of investment banking, a Master’s Degree is the rule, not the exception.
The most common graduate level program chosen by investment bankers is a Master of Business Administration (MBA). The MBA can be specialized to allow for targeted training, but most programs include the following courses:
Financial Reporting and Analysis
Corporate performance as based on financial reports; how to analyze the reports; what to look for in financial statements to ensure legality and adherence to regulations
• Understanding of accounting standards
• Understanding of how taxes factor into financial analysis
• Reading, interpreting, and analyzing financial documents
Management Information Systems (MIS)
An overview of MIS and how to effectively run a business-wide operation
• Managing IT as a strategic resource
• Understanding the role of the Chief Information Officer (CIO)
• Process engineering, planning, governance, and communication
Statistics for Managerial Decision-Making
Statistical theory, business systems; business systems analysis and improvements
• Understanding probabilities
• Using common software
• Decision analysis based on a variety of simulations
General management of businesses and organizations; identifying solutions to complex problems and choosing how to implement those solutions
• Pinpointing the source of problems
• Management of solutions
• Action-oriented general management techniques
Advancement & Certifications
In what is one of the most competitive fields there is, voluntary certifications are another way to stand out:
Chartered Financial Analyst (CFA)
This credential is the most highly regarded by investment banks.
How to become an Investment Banker
Investment bankers come from a variety of backgrounds and hold a variety of degrees. The common denominator among them is a strong foundation in mathematics. At the undergraduate level, many earn a Bachelor’s Degree in accounting, business, economics, or finance.
Graduates of Bachelor’s Degree programs are typically hired in analyst roles and complete a new-employee training program before they begin their job. This training can last several weeks and introduces new analysts to principles of accounting, risk, markets, financial statement analysis, and financial modeling. Instruction in negotiation, communication, and presentation skills is generally also part of the orientation. After completing their initial training, analysts often take part in continuing education that is also provided by their employer.
Some aspiring investment bankers choose to gain experience and make professional contacts before landing a job, by completing an internship. Investment banks regularly take on both undergraduate and graduate interns and provide them with training and mentorship. Interns typically perform the same kinds of duties that analysts and associates perform, including gathering data, working with financial models, and interacting with clients.
While a Bachelor’s Degree is sufficient to obtain an investment banking analyst position, a graduate degree is the norm in the industry, especially in senior roles. Predominant in the field is the [Master of Business Administration (MBA)]. Many MBA programs provide actual field experience, which employers prefer. Graduate degrees in law, financial/applied mathematics, and financial analysis are also common and useful.
Once they are employed, investment bankers must register as a representative of their bank with the Financial Industry Regulatory Authority (FINRA).
Investment bankers can also pursue voluntary certifications through the Chartered Financial Analyst (CFA) Institute.