Perks of choosing an investment banking career

Investment Banking (IB) is a type of financial service that creates capital for individuals and companies by counselling on market strategies that can minimize their risks as well as maximize their returns. They provide assistance for mergers, acquisitions, and restructuring.

Several individual are attracted to investment banking career, as it draws some of the best brains in finance. The handsome compensation that grows wildly with hierarchy within the firms is one of the main reasons to be in this field. Though there are several more attractions, which are very important and yet more humble reasons as well.

In this article, let’s have a look at the top reasons why many are choosing the investment banking career.

Better learning experience

One of the essential reasons is being the ability to understand the analytical tools and learn them on the job very about the ins and outs of investment banking. Financial modelling is a big part of an investment banker’s job, to perform valuations of investments and risks within the constraints of the knowns and unknowns.

One can also get to experience through the various systems while getting close and personal with the second advantage of being in this industry – the ability to learn from real and big corporate transactions. To conclude, it is a wholesome learning experience that can at the same time propel to bigger better roles within the IB realm or branch out into other paths like private equity, hedge funds, or even in one’s own firms.

Attractive salaries and more

Investment banking is the best career choice for individuals who are looking for the challenges of an analytical job profile and the rewards that come with it, namely compensation. It is demanding, hectic, stressful, and still manages to lure business and quant freshers around the globe.

An individual usually spends anywhere between 2 to over 5 years as an analyst, sometimes making close to USD 200,000 if they are successful. Very long hop skip and leaps later can be ushered into the position of VP, Director or even higher.

Salaries are, by far, one of the best in the post-MBA career choices. In the US, the average starting base salary for analysts is between USD 75,000 to USD 96,000 per annum. If one adds various bonuses like signing and stub bonus earnings, along the way, these salaries can shoot up to around USD 150,000 or more, even for first year analysts.

In addition to attractive salary and bonus, investment banking career also benefits with health insurance, vacation, and profit-sharing or retirement packages.

Stellar career growth

Entry level analysts in investment banking usually handle excel and power point work, track buying and selling, manage documentation and correspond with clients. The career progression from being an analyst to a managing director can take more than 12 years.

The below table gives a glimpse of typical career progression in the IB industry, if one meets all the excelling standards of performance.

FromToAverage Period
AnalystAssociatewith MBA       2 years
Associate (typically MBA)Vice President3 years
Vice PresidentSenior Vice President3-4 years
Senior Vice PresidentManaging Director2-3 years

However, USA and other banking hubs like in UK, housing some of the banking elites like JPMorgan Chase, Goldman Sachs, Citi, Wells Fargo, Bank of America, and more, pay some of the highest salaries in the industry. Others like India and Canada have a much smaller industry and pay substantially lower when compared to USA and UK. 

Acquire investment banking certification

To be part of this rapidly-growing industry doing an investment banking certification is the best choice. One will have a lot of opportunities to learn and enhance their skills because they will be in the industry where they will be surrounded by a highly talented group of individuals. As on will be working in a competitive environment, a certification will offer the best learning path.

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By Michael Caine

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