How do I get experience in investment banking?
The initial internships might be at search funds, smaller PE firms or VC firms, or startup hedge funds; or in corporate finance at normal companies, Big 4 firms, non-Big-4 valuation or accounting firms, or even non-IB groups at banks, such as corporate banking or wealth management.
Typical investment banker resumes will include previous financial advising, financial management, trading, or general business consulting experience.
To become an investment banker, you need a minimum of a bachelor's degree. Common majors are finance, business, economics, and accounting. You also need to pass licensing exams to work as an investment banker.
It will be harder to get into the investment banking field, especially at a top bulge-bracket investment bank, but it's not impossible. If you begin working as a postgrad in a field within finance, such as consulting or perhaps even accounting, you may be able to shift into investment banking.
An entry-level investment banker performs a variety of research and investment duties for an investment bank. As an entry-level worker, you may still be getting training from those with more experience.
1 - Analyst
Nearly all entry-level analysts come from top schools and perform very well academically. Most start out with an investment bank on a two-year or three-year program, where they act as the grunts for higher-ranking employees.
Key Takeaways
Investment bankers meet with clients, prepare offers, run financial projections, and work on pitchbooks, that help generate new clients. The work is lucrative but the days are long and stressful.
I happen to know some 28+ year old investment bankers that would be very happy making $500k/year. Technical quibble aside: There are many who have set such high expectations for themselves that they are dissatisfied with their pay packages despite being in top 1% income bracket.
Sure, anybody can make a good living being a doctor or a lawyer or an investment banker where you can make ~$200-500K per year a few years after you finish with your studies, but you hit a ceiling very quickly unless you start your own practice (aka start your own business).
| Position Title | Typical Age Range | Base Salary (USD) |
|---|---|---|
| Analyst | 22-27 | $100-$125K |
| Associate | 25-35 | $175-$225K |
| Vice President (VP) | 28-40 | $250-$300K |
| Director / Senior Vice President (SVP) | 32-45 | $300-$350K |
What is the hardest investment bank to get into?
Goldman Sachs, another prestigious investment bank, maintains similarly competitive acceptance rates. With intense competition for limited openings, the acceptance rate hovers around 5%. This means that out of every 100 applicants, only five individuals receive an offer from Goldman Sachs.
Yes, GPA matters! Bulge bracket banks and almost all other investment banks will look at your GPA when applying for a job and you should include it in your resume. Typically banks screen resumes based on GPA and will often remove anyone below 3.5.
Even when you are working with financial models, none of the math is complex. There's addition, subtraction, multiplication, and division… and occasionally built-in Excel functions like IRR, Mean, and Median. You never use calculus or differential equations or even geometry / trigonometry.
Investment-Banker Salaries
The average salary for Investment-Banker is $3,33,497 per year in the United States. The average additional cash compensation for a Investment-Banker in the United States is $1,89,027, with a range from $1,41,770 - $2,64,638.
After a few years of working as an investment banker, you may consider changing jobs to explore a different area of finance or investing. Depending on your current experience and aspirations, some options you have include working for a corporation or helping organisations and individuals manage their assets.
| Level Name | Total | Base |
|---|---|---|
| Analyst 601 | $123K | $105K |
| Associate 602 | $228K | $174K |
| Vice President 603 | $290K | $191K |
| Executive Director 604 | $598K | $303K |
Age plays a huge factor in the decision-making process. Wall Street is an up-and-out industry. Unless the goal is senior management, most people in finance are out of there by age 50. That's not at just the biggest investment banks, either.
It might be because careers in banking have always been quite short – meaning that banks had to tempt juniors with seniority to stay (or at least apparent seniority). It might be because VPs are the earliest stage at which bankers start meeting clients, who also feel the need to talk with someone senior.
| Company Name | Avg Annual Salary |
|---|---|
| Morgan Stanley Investment Banker Salary 0 - 1 yrs exp. | ₹35.1 Lakhs ₹24 L/yr - ₹35.7 L/yr |
| Genpact Investment Banker Salary 1 - 3 yrs exp. | ₹3.1 Lakhs ₹1.5 L/yr - ₹3.4 L/yr |
| ICICI Bank Investment Banker Salary 5 - 7 yrs exp. | ₹5.1 Lakhs ₹3.4 L/yr - ₹6 L/yr |
The life of an investment banker is taxing on your body and mind, but well-rewarded from the higher than average salary. It may seem daunting for most with the extreme workload and responsibility that comes with the job, but with experience you could break into the finance world with ample real-world experience.
Why are investment bankers paid so much?
“Why investment banking” is not a hard question for many for this reason. Investment bankers make money through the fees charged to their clients. As discussed above, this includes underwriting fees for arranging the sale of securities and advisory fees for providing strategic guidance.
Most former bankers have reported that it is quite uncommon for an analyst to hit the 100-hour mark. Apparently, this only happens occasionally (once a month) when an analyst is working on multiple live deals or poorly aligned international projects.
Hedge Fund Manager
Typically, you'd have earned a university degree, a CFA certification (Chartered Financial Analyst), and a decade of outstanding investment experience. To make this one of the jobs that pay $1 million dollars a month, you'll need to be one of the absolute best in the world at it.
Moelis (born 1958) is an American billionaire investment banker. He is also the founder, chairman and CEO of Moelis & Company, a global independent investment banking firm.
Investment bankers typically earn salaries in the $200,000 to $700,000 range, with bonuses that can bring their total income up to several million dollars per year. To amass a million-dollar fortune, an investment banker would need to save and invest a large portion of their income over a period of many years.
