How to Become an Investment Banker

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On a daily basis, hundreds of billions of dollars and invested. The money is used to buy stocks, bonds, mutual funds, and securities. Investment bankers are essential to help people invest their money wisely and make good banking decisions.

What does an investment banker do?

Investment bankers are sales agents who link companies and individuals that need funds with investors who wish to provide financial support in exchange for equity (stock) or debt (bonds). This procedure is called underwriting and is the investment bank’s main function. Investment bankers are required to sell two times. First, they sell their advisory services to help organizations establish themselves and issue new stocks or bonds. Second, they sell the products they issue to the investors.

An important advisory service is helping organizations that are new to the area of public investment initially issue stock. This procedure is called initial public offering (IPO). This process takes a lot of effort because private corporations must meet strict requirements to be converted to public or be able to issue stocks and bonds.

What kind of training does an investment banker need?

Most investment bankers have a bachelor degree in finance, business, or economics. Some employers prefer a Master of Business Administration. Many investment bankers also complete internships. Majority of employers provide intensive training on-the-job for entry-level employees. To stay abreast with new products and services, most investment bankers attend training seminars and conferences on a regular basis.

Many investment bankers pass the General Securities Registered Representative Examination, also known as the Series 7 Exam and register with the Financial Industry Regulatory Authority (FINRA). Majority of States also require the Uniform Securities Agents State Law Examination, commonly called the Series 63 or 66 Examination. There are also many other licenses available that allow investment bankers to sell different services and products. Most experienced investment bankers have several licenses.

What are the prospects for a career in investment banking?

Employment of investment bankers is projected to grow much faster than the average for all professions, increasing 25% from 2006 to 2016 (1). Growth will stem from the increasing number of financial products and services available and more consumers investing their money.

Job prospects are expected to be favorable with the best prospects for investment bankers that have advanced education and many licenses.

How much do investment bankers make?

As of July 2009, investment bankers with less than 1 year of experience earned yearly salaries around $75,000. Those with 1 to 4 years experience earned yearly salaries around $79,460 (2).

A career as an investment banker is a great choice for individuals with strong communication and interpersonal skills, ability to work as a team, a strong work ethic, and the desire to succeed. Investment bankers must also be able to comprehend and analyze numbers efficiently. Success is driven by self-confidence and the ability to constantly handle and learn from frequent rejection.

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