What to Study At University to Become An Investment Banker?
What Does an Investment Banker Do?
Analysts for an investment bank are frequently where investment bankers start their careers. After employment and further schooling, they may be promoted to the positions of analyst or vice president, where they start managing and overseeing more recent hires in the investment banking industry.
These higher-level positions typically call for either an MBA or a master’s degree in finance. Many people pursue careers in finance after working in investment banking, including hedge fund management, corporate finance, and venture capital.
As of June 2022, these professionals’ average yearly base salaries, as reported by Payscale, were $101,300. By mid-career, overall compensation—which includes incentives and investment opportunities—can reach the high six- or seven-figure range.
What Are the Steps to Become an Investment Banker?
Investment banking careers follow a very organised path. Aspiring investment bankers start studying finance in college. They then go after entry-level jobs before the majority of them pursue graduate degrees. The licences they need to operate their business are also obtained while they are working as investment bankers.
Step 1: Earn a Bachelor’s Degree in Finance
- A bachelor’s degree in finance is needed for those who want to work in investment banking. Other possible approved majors are business or economics with a finance minor.
- Students who pursue a bachelor’s degree in finance learn how to conduct financial evaluations and projections. Additionally, they gain a general understanding of financial markets and the ability to evaluate financial documents. Additionally, they learn soft business skills like networking techniques for selling financial services.
- According to the National Center for Education Statistics, the average bachelor’s degree in finance costs over $35,000 at private nonprofit four-year universities and $9,375 at public four-year schools with in-state tuition.
Step 2: Get an Entry-Level Investment Banking Job
- The majority of investment bankers start off as investment analysts. According to Payscale data from August 2022, the average yearly compensation for this entry-level position is $67,860. High bonuses, which are typical of investment banking, can increase total pay.
- Investment banking entry-level positions are competitive. To get useful real-world experience, students should take internships and actively network while they are in school. Some financial institutions provide career bridge programmes to help students launch their professions right after graduation.
- Typically, bankers spend a few years working as analysts before pursuing further education or being elevated to a more senior position. When choosing a position, candidates should think about total salary and possible promotion avenues.
Step 3: Earn Your Master’s of Finance
- While a graduate degree is not required for entry-level roles in investment banking, the majority of higher-level professions do. Investment bankers often hold either a master’s degree in finance or an MBA with a focus in finance. Your earning potential can increase and you’ll be more competitive when applying for positions in investment banking.
- Depending on the programme you enrol in, costs change. The average annual tuition for public graduate programmes, according to the College Board, is $9,000. At elite colleges, MBA programmes might cost much more.
- It is important to keep in mind the great earning potential of upper-level investment bankers, many of whom make six figure salaries, when deciding whether or not to incur debt for graduate school.
Step 4: Get a Job as a Investment Banker
- Most investment banking roles have a fairly typical progression path once you get a master’s. Investment bankers advance in seniority by becoming associates, then vice presidents, who are responsible for managing a group of analysts and colleagues.
Step 5: Consider Continuing Education or Specialization
- Although it is conceivable, it is not extremely typical to pursue a doctorate in finance. Graduates with a doctorate in the subject are frequently prepared for professions in academia and research. The typical last degree for an investment banker is an MBA.
- It is true that some investment bankers opt to further their education in other ways. To stay competitive in the ever changing business environment, many people enrol in supplementary continuing education programmes and earn certifications in banking or finance.