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Investment Banker: Roles, Courses, Salary, Qualifications, & More

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Aayushi

26 July, 2023

Investment Banker: Roles, Courses, Salary, Qualifications, & More

“Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.” – Warren Buffet

We have all grown up watching movies like Wall Street and American Psycho. Do you remember how while watching these movies, we would fantasise about being Bud Fox or Christian Bale, the big shots of the financial world. The flamboyance of the financial world enchanted us and we wanted to do everything just to get there.  But then, we all grew up and forgot this dream, except that we didn’t.

Whether you accept it or not but it is a fact that you never stopped dreaming about the glamorous Wall Street. Embellished with some of the largest Financial Institutions in the world such as Goldman Sachs, JPMorgan Chase, Morgan Stanley, Bank of America Merrill Lynch (BAC), etc., Wall Street is said to control the entire economy of the world.

The Investment Bankers marching up and down the eight-block-long street, taking back-to-back calls, and advising their clients on big economic decisions would never fail to leave you enchanted. You want to be one of them so bad that it’s making your heart race. But the big question is how do you become one of them? In this blog, we will explore just that.

What is Investment Banking?

According to Investopedia, Investment banking is a type of banking that primarily deals with raising money for large entities such as corporations, government entities, etc.  It organises large and complex economic transactions such as IPOs, underwritings and mergers.

In order to raise money, banks use many methods. They also undertake underwritings for the issuance of new securities of a company. They manage the IPOs of a company and offer sound financial advice on various issues such as acquisitions, mergers, etc.

What is an Investment Banker?

Investment Bankers are financial experts who keep an eye on the economic weather to predict any major changes happening in the future. They help their clients sail through the treacherous waters of high finance.

They work with large companies, government entities and other institutions to manage the financial aspects of their big projects. They have excellent communication skills and exceptional number-crunching abilities, both of which are critical to their job.

How to Become an Investment Banker?

In order to become an Investment Banker, you must have sound knowledge of the various core aspects of the financial world. Furthermore, you must possess great analytical abilities and mathematical skills in order to succeed in the field. Given below is the detailed eligibility criteria for becoming an Investment Banker.

  • Qualifications Required to Become an Investment Banker

In order to become an Investment Banker, the bare minimum qualification is a graduation degree. Even though you can pursue graduation in any field, however, it will be better to pursue a graduation in Economics, Finance, Accounting, Mathematics or Statistics.

After graduation, you should go for a professional degree in Accounting or Finance such as CA, CFA, or an MBA in Finance. Going for these professional courses will equip you with comprehensive knowledge of various fundamental principles such as accounting, financial analysis, management consulting, etc.; all of which will help you in your job role.

Additionally, you can also go for a certification in Financial Analysis which will help you gain expertise in some key areas of operation. Furthermore, the certification will equip you with the necessary skills which will come in handy during your job as an Investment Banker.

  • Experience Required to Become an Investment Banker

You may not directly be able to land a job as an Investment Banker. First, you will need to gain some experience as an intern. Once you finish the internship and develop crucial skills, you can move ahead to become an Investment Analyst. After you have worked in the industry as an Analyst for a couple of years, you can march ahead to assume the role of an Investment Banker.

  • Skills Required to Become an Investment Banker

During your tenure as an Investment Banker, you will need to perform many activities such as risk management, financial management, analysing and predicting economic trends, etc. In order to carry out these tasks with ease, you will need an extensive and well-developed skill set. Some of the must-have skills include:

      • Communication Skills
      • Financial Modelling
      • Number Crunching Skills
      • Statistical Skills
      • Analytical Abilities
      • Data Analytics
      • Risk Management
      • Presentation Skills
      • Sound Knowledge of Excel and Powerpoint

Investment Banker: Role & Functions

The job of investment bankers is quite straightforward. They are responsible for raising capital and offering economic advice on important investment decisions. Investment Bankers specialise in buying and selling of securities. They also mediate large corporate transactions such as mergers and acquisitions.

The Professor of Finance, Robert R. Johnson, of Heider College of Business, Creighton University defines the role of an Investment Banker as, “Investment bankers raise money by selling securities and transferring that money to people who need it to grow businesses or bring other costly projects to reality.”

The day-to-day functions of an Investment Banker include:

  • Mediate big and complicated financial transactions for large companies and institutions such as mergers, sales, acquisitions, etc.
  • Underwriting debts and issuing securities for raising capital
  • Creating detailed documentation for the Securities and Exchange Commission (SEC)
  • Identifying potential risks associated with a project and advising clients on how to mitigate them
  • Acting as an intermediary during the company’s IPOs so as to generate immediate liquidity
  • Assisting clients in pricing financial assets and fulfilling all the regulatory requirements

Investment Banker Salary in India & Future Scope

Investment Banking is one of the most rewarding and high-paying career fields of all times. An Investment Banker makes a huge amount of money and can find employment in some of the biggest names of the investment world such as JP Morgan & Chase, Goldman Sachs, etc.

  • Average Salary of an Investment Banker: INR 4.4 LPA
  • Highest Salary of an Investment Banker: INR 40 LPA

Source: Ambition Box

Takeaway

Investment Bankers are tactful individuals who help big corporations to make smart investment decisions. An Investment Banker is responsible to handle large financial transactions such as mergers, acquisitions, etc. for businesses. Furthermore, they assist companies in raising capital by underwriting debts and issuing securities. It is a rewarding career field which is always in high-demand.

FAQ

Q1. Can a CA Become an Investment Banker?

Yes, you can become an Investment Banker after CA. In fact, you will have an edge over other candidates as you will be well-equipped with the knowledge of the financial world.

Q2. Which stream is best for an Investment Banker?

Any graduate can enter the field of Investment Banking. However, it is better if one has studied Economics, Accounting, Mathematics or Statistics during graduation.

Q3. Which degree is best for Investment Banking?

If you are looking to make a career in Investment Banking, you must go for a professional degree in Finance or Accounting such as CA, CFA, MBA in Finance, etc.

Q4. Is MBA required for an Investment Banker?

Even though an MBA is not a prerequisite for becoming an Investment Banker, the course helps you gain the essential knowledge and skills to excel in the field.


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