Four Ways to Get into Investment Banking
Investment banking is a highly demanding yet lucrative industry that attracts many young people. The typical starting salary of an investment banker is $82,027, and they can expect to receive generous performance bonuses on top. There are excellent opportunities for progression in this industry with base salaries reaching between $400,000 and $600,000 in the most senior positions. Plus, the financial knowledge and expertise that investment bankers develop through their work can help them make smart decisions about their personal investments and financial affairs as they pursue financial freedom.
If you’re considering a career in investment banking, it’s important to note it’s a very competitive industry. You’ll need to work incredibly hard to grow your financial knowledge, attain relevant qualifications, and build connections with established figures in the industry. To start your research and come up with a game plan that considers your existing experience and skill set, here are four ways to get into investment banking.
Get a bachelor’s degree in finance
Employers in the investment banking industry expect entry-level applicants to have a bachelor’s degree of some kind. Popular finance degrees cover a broad range of financial and economic principles, including investment analysis, financial management, and accounting, which means they give you an excellent basis of knowledge on which to build a career in investment banking. Other relevant degrees include economics, business administration, management, and statistics.
In addition to providing valuable knowledge, your time at university will also play an important role in helping you find your first job in investment banking. Many colleges offer networking events and careers fairs where you can connect with mentors, meet potential future employers, and secure work experience or internships.
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Go to business school
A common route into investment banking is via business school. Earning an MBA (Master of Business Administration) can help you further build on your undergrad knowledge and improve your chances of accessing higher-paid entry-level positions in investment banking. MBAs can be particularly helpful for those who have a bachelor’s degree that is unrelated to the world of finance, but in these instances it’s usually necessary to also have some work experience related to business or management.
If you don’t want to study business, you could consider an alternative graduate degree such as a masters in finance. Some schools offer part-time masters so that you can study alongside your existing job, which is ideal for those striving for a career change. Keep in mind that getting into a masters program is a competitive, demanding process in itself that usually requires the completion of the GMAT or GRE, so you’ll need to give yourself plenty of time to prepare for application windows.
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Gain work experience
Internships are an important part of the journey into investment banking. They offer valuable hands-on experience, help you understand if the industry and its culture is right for you, and play a vital role in networking. Every moment of work experience is a chance to impress potential future employers and get to know established figures in the industry who can share their expertise with you and give you a glowing reference when you apply for permanent roles.
It’s very common to complete an internship in the summer following your final year of college, with the hope that it leads to a permanent position. In these cases, the internship serves as a trial period to help the employer understand whether you fit into the company culture and can meet the demands of the job. It’s also becoming increasingly common for investment banking hopefuls to begin interning during the summer following their freshman, sophomore, and junior years of college. Freshman applicants often don’t have enough education to be successful, but the process of applying for internships provides them with valuable practice for writing applications and interviewing.
Earn a FINRA License
Investment bankers must be licensed with the Financial Industry Regulatory Authority (FINRA) in order to sell investment services and products. To do this, they must pass the Securities Industry Essentials (SIE) examination and the Series 79 examination, then register as an Investment Banking Representative. These exams can only be taken with sponsorship from an employer, so you’ll need to land your first job before qualifying, and you’ll need to qualify before you’re able to fulfil your full duties.
Plan your investment banking career as early as possible
Every step of the way towards a career in investment banking is highly competitive and requires hard work and dedication. If you think this is the industry for you, be sure to start preparing for your college applications as soon as possible to optimise your chances of success.
Author bio
Olly Peterson is a current MBA student working towards his own financial freedom after changing careers later in life.
