Wilson College Online Blog

For many businesses, growth isn’t just about reaching new consumer markets or offering new products. It’s often about finding new investors, using their own profits to fund new business projects, or merging with other key players in their industry.

However, while such endeavors can be profitable, they also can be complicated and risky. When top-ranking executives need help navigating capital-creating ventures, they turn to investment bankers for help.

Investment bankers do more than invest their clients’ assets into potentially profitable programs. They help businesses build a framework for future financial success. Learning how to become an investment banker, what they do on a day-to-day basis, and the benefits of an education in finance can help individuals who are interested in embarking on this exciting and high-stakes career.

What Does an Investment Banker Do?

Investment bankers help businesses navigate and raise capital through capital markets. While investment bankers can handle these transactions themselves on behalf of their clients, they also can act as financial advisors in related matters.

Investment bankers often help their clients:

• Manage initial public offerings (IPOs) and sell stock on public markets
• Set stock prices and sell securities
• Maintain employee pension funds, hedge funds, mutual funds, and other capital pooling efforts
• Navigate corporate restructuring efforts, divestitures, and mergers
• Invest capital in new ventures and securities
• Find new investors by making presentations to different interested groups
• Manage debt they’ve incurred or loans they’ve given out
• Weigh the potential advantages and risks of financial decisions
• Stay in compliance with financial laws and regulations

To carry out these duties, investment bankers must be skilled at modeling financial data for presentations, navigating complex financial situations creatively, and drawing meaning from global market trends. They also must have strong communication skills and be able to maintain trusted relationships with corporate executives.

Investment Banker Work Environment

Investment bankers often work in fast-paced environments and keep long hours. This is because they must often meet with international clients, schedule meetings around their clients’ schedules, and take action based on the most recent market trends. These trends can change at a moment’s notice.

Their employers are typically investment banks—institutions that specialize in advising clients about their finances and carrying out transactions on their behalf. Examples of investment banks include JPMorgan Chase, Morgan Stanley, and Wells Fargo.

However, some large corporations and insurance companies have their own investment banking divisions as well. These divisions typically serve as intermediaries between the business and their clients, partners, and investors.

How to Become an Investment Banker

To become an investment banker, future professionals will need to build a strong academic foundation in finance, gain some entry-level experience, and look for advancement opportunities throughout their career.

Step 1: Earn a Degree

To learn the financial principles investment bankers use every day, students often pursue a bachelor’s degree in finance . These programs are tailored to students who want to be involved in corporate financial planning. 

A bachelor’s in finance program typically includes classes on investment banking skills in areas such as:

• Financial accounting, including cash flow analysis, recordkeeping, asset measurement, and other fundamentals
• Statistics
• Data analysis and modeling
• Strategic financial management
• Microeconomics and macroeconomics
• Domestic and international business laws and practices
• Business ethics

While there are other related degrees available, finance degree programs are often the best suited to investment banking. For example, finance and accounting programs are similar in many ways. However, accounting programs tend to focus on skills required for internal money management. Finance programs include classes that teach the skills required to operate in the greater economic market.

Step 2: Gain Entry-Level Experience

After earning a bachelor’s degree, new professionals often gain hands-on experience as investment banking analysts at banks and brokerage firms. Professionals in these entry-level roles support their more experienced colleagues by conducting research on market trends, preparing presentations, and performing other administrative duties.

Step 3: Pursue a Master’s Degree

Professionals can make themselves more competitive for high-level investment banking positions by earning a master’s degree. An advancement-focused investment banker may want to consider earning a master’s degree in leadership, finance, or business administration. A Master of Organizational Leadership program, for example, can help investment bankers learn how to enact ethical and effective policies in their own organization and their clients’ businesses. 

In some cases, employers may cover some or all of an employee’s educational costs at the master’s level. However, such benefits may be contingent on employees agreeing to work for their employer for a set amount of time.

Step 4: Look for Advancement Opportunities

The next step up from analyst is often investment banking associate. While associates often carry out some of the same duties as analysts, they’re more focused on advising clients and taking actions on their behalf to raise capital. To become an investment banking associate, analysts must typically work in their position for a few years.

As associates work with more clients and build strong portfolios that demonstrate their expertise, they can move into higher-level positions such as:

• Vice President. At investment banks, vice presidents are often responsible for managing client relationships and overseeing teams of associates.

• Senior Vice President. Senior vice presidents often pitch services and ventures to potential clients and manage relationships with existing clients. They also act as project managers and serve as liaisons between associates and high-level administrators.

• Managing Director. Managing directors are often the highest-ranking administrators at an investment bank. While they may be involved with client services, they’re often in charge of ensuring that their own organization is on a productive and profitable trajectory. 

This structure may vary from employer to employer. For example, some organizations have junior directors and other transitional roles that help professionals expand their skill set.

Salary and Job Outlook for Investment Bankers

Investment bankers had a median salary of about $118,000 as of July 2024, according to the compensation website Payscale. However, the top-earning professionals often make closer to $250,000. And, because investment bankers are often eligible for bonuses and profit-sharing programs, their total yearly income can be much higher.

The U.S. Bureau of Labor Statistics (BLS) expects employment of securities, commodities, and financial services sales agents (a group that includes investment bankers) to increase by 7% between 2023 and 2033. The BLS expects there will be about 41,000 job openings per year for these professionals.

In the same time period, the BLS expects employment in all sectors of the economy to grow by an average of just 4%. This indicates that, as the national and global economies grow, there are likely to be more job opportunities for financial professionals, including investment bankers, than for those in many other occupations.

Become an Expert in Financial Growth

If discovering how to become an investment banker has encouraged you to move forward in your career, Wilson College Online’s Bachelor of Arts in Finance program can help you take the next step.

Wilson College Online’s interdisciplinary curriculum features classes on portfolio management, investment, statistics, and other skills that help investment bankers maximize gains. With classes on international business and ethics as well, this program is a great option for students who see themselves taking a broad and sustainable approach to investments.

Learn more about Wilson College Online’s flexible schedules and financial aid opportunities today.

Recommended Readings

Accounting vs. Finance: Which Degree Should You Pursue?

How to Become a Credit Analyst

Is a Finance Degree Worth It?

Sources:

Indeed, “Everything You Need to Know About Becoming an Investment Banking Analyst”

Indeed, “What Is an Investment Banker? Definition and Career Advice”

Investopedia, “The Hierarchy of an Investment Bank”

Payscale, Average Investment Banker Salary

U.S. Bureau of Labor Statistics, Securities, Commodities, and Financial Services Sales Agents