Investment Banker  What They Do

Just the Facts

Insider Info

dotInvestment banking sounds exciting and alluring. And it lives up to its reputation. If you're good at this type of work, you really can become rich.

"Total compensation can explode to $8 to $10 million," says Bruce Neuman. He is a recruiter in New York. But think a little more modestly in the beginning.

dotInvestment bankers work in investment banks, corporations, brokerages or small investment banking firms. They counsel clients on financial issues such as arranging capital, managing assets, trading securities and issuing stock.

"People who enter the investment banking field should be highly motivated and well rounded," says investment banker Marc A. Cabrera.

dotPeople tend to start in entry-level positions such as junior analyst. They continue up the ladder as analysts, associates, vice-presidents, directors, managing directors, partners and CEOs.

"Every stockbroker is starting to call themselves an investment banker," says Allan Kennard. He works with a financial services company. "The more traditional definition refers to sourcing equity and debt capital for corporations: 'corporation finance.'"

Carla Frank of the Women's Business Connection in Los Angeles is pursuing a career in corporate finance. "The main reward in this field is being able to help a company grow. In order for a company to be successful, it needs a great product or service and the ability to provide that product or service to its community," she says.

"Corporate finance professionals help in obtaining financing to start a company or maintain existing companies' working capital needs. [They] analyze the costs and benefits of different investment opportunities and provide financial support to all areas of the company."

dotMath skills are one of the keys to success in this field, she says. "Computer skills are the important tool in corporation finance. The ability to work with spreadsheets such as Excel is crucial. Good communication and interpersonal skills are also important. Corporation finance is as much about working with people as with numbers."

James Lorimer is an investment banker. He says on your first few months on the job, you can expect to "analyze the value of a public company, determine how a company considering going public should be valued, prepare a presentation to your superiors and to the company explaining the value."

dotHe recommends you learn the following:

  • Analytical skills
  • Specific valuation and financial analysis
  • Financial statement analysis
  • Spreadsheet modeling
  • Communication and writing skills

dotInvestment bankers work in comfortable office environments. Expect to spend a lot of time there. When you're first starting out, hard work and long hours are expected. This is a profession where you need to prove yourself.

Even when you get near the top, performance counts. Slack off a little on your work and you probably won't have a job (or a good reputation) for long. On the up side, hard work and good results are respected and admired in this profession.

At a Glance

Counsel clients on financial issues

  • This is not an entry-level job
  • You need strong analytical and communication skills
  • An economics, finance or business degree is a good place to start