If companies and municipalities wish to raise money to finance their activities, they go to an investment bank for assistance. An investment banker assists these businesses to underwrite securities, such as bonds or shares, to raise the capital the organization needs. In addition to securities underwriting, investment bankers can use complex processes such as initial public offerings or mergers and acquisitions.
To accomplish this successfully, they must be well versed in financial market behavior and in the legal requirements that investment banks and their customers must meet for each process. As such, this is a highly specialized career. Investment bankers must hold specific knowledge to be able to do their jobs.
In case you’re thinking about working as an investment banker, this is the article for you! Continue reading to learn more about this profession. Specifically, we will tell you about the training and skills you will need.
Training And Education
Although there are many different types of backgrounds among investment bankers, a solid background in mathematics is a requirement. For example, future investment bankers might hold bachelor’s degrees in finance, accounting, or mathematics but may also come from other fields such as informatics or physics.
Even so, Investment bankers are mostly formed by their employers. Recent Bachelor’s degree graduates typically start in analyst positions and complete a training program before beginning their job. Such training programs can last several weeks and introduce new analysts to different markets and their risks, as well as, different financial and accounting subjects.
Completing an internship is the right way for those interested in the position to gain experience and make professional contacts before landing a job. Preparing and coaching interns is part of Investment banks’ commitments.
Interns typically carry out the same kinds of tasks as analysts and associates perform, including collecting data, working with financial models, and interacting with customers.
Investment Banker Career Misconceptions
Being a banker is much more than being good with math and finance. Quantitative acumen does not in any way predict an investment banker’s success overall. In addition to being math whizzes, they must be able to persuade, be aggressive or humorous when necessary, and present the right laboral deontology.
Skills And Duties
Investment bankers do multiple tasks for their customers. Each individual banker wears many hats. Raising money for customers is at the core of every investment banking role. This is primarily done in two ways: the issuing of debt and the selling of shares in the company.
Debt issuance means bond sales to investors. An investor lends money, or capital, for a fixed number of years to the issuing company, usually at a fixed interest rate. The issuing company makes interest payments throughout the bond term. Then the company returns the principal to the lender when the bond term expires.
Alternatively, when a company sells shares, they receives money and in exchange, the buyer of the shares receives a stake or stock in the company. This means, to a varying degree, they own part of the company.
Job Prospects And Career Outlook
Analyst roles are a common place for investment bankers to start their careers, and they advance to associate positions as they gain experience and education. Others enter the field as partners after having worked in another profession and earning a degree, such as an MBA.
Associates can, with experience, become vice presidents at their banks, supervise analysts and associates and interact more directly with clients. Investment bankers can then become executives or managers at their bank after some time and further concentrate on building relationships with new and existing customers.
To land a job as an investment banker, while still in school, you need to focus heavily on networking. Large investment banks hire prospective analysts and associates from top business schools. They often fill these roles with interns who worked as summer analysts or associates with them.
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Also read – How To Become A Bank Teller