Studying the Appeal of Investment Banking Careers

If you're a brilliant student pursuing a degree in a subject like finance or accounting, you're probably already seriously considering a career in investment banking. Investment banking jobs have earned a reputation for offering some of the highest salary packages a recent college graduate can expect. A few years ago, a graduate hired by a leading US investment bank could make up to $150,000 a year, including expected bonuses, and that high salary could be in the first year or two of a successful investment banking career to be reached.

Studying the Appeal of Investment Banking Careers
Studying the Appeal of Investment Banking Careers

Over the past year, the recession has also impacted the living standards of investment bankers, with pay cuts of up to 40% and bonuses all but eliminated. For students looking for a job in investment banking, however, all is not bleak. Aspiring bankers seem confident that the current troubles are like the proverbial passing cloud and that salaries and bonuses will soon return to, or even exceed, the levels they were a few years ago. Interest in investment banking courses is still high, and internships are very popular.

The investment banking jobs hierarchy

Investment banking is a hierarchical profession, with salaries ranging from about $60,000 per year for a newcomer to millions of dollars per year for a seasoned department head. Those who aim to work nine to six regular workdays probably won't make as high a salary, but they do so at the cost of ninety to one hundred hours a week. Employees who reach the top of the pyramid are expected to demonstrate their commitment to the bank by working significantly longer hours than in other sectors of the economy. While careers in investment banking can provide a top-notch executive lifestyle, they don't leave nearly as much time for the employee to enjoy their immaculately furnished penthouse or other perks associated with that level of income.

Many people entering investment banking begin with internships that may be sponsored directly by a bank or arranged through a university that offers an investment banking degree. Another path to a career in investment banking is to become a junior assistant or investment analyst. At the most basic levels, the new hire is busy learning the basics of the business, including understanding the structure of the bank and networking within the bank. In addition, they provide useful assistance to analysts and executives in organizing meetings, preparing documents, and other internal support tasks. Although their contact with customers is generally minimal, they may have the opportunity to attend some meetings as an observer.

Provided they invest the necessary hours and demonstrate their skills and commitment to their job, new hires become regular investment analysts with responsibilities for researching and analyzing investment opportunities and dealing directly with clients. Possession of a good master's degree from a recognized university enables other new hires to join the bank at the Senior Investment Banker Associate level. Associates enjoy a higher starting salary than junior analysts, although they are typically not given responsibility for their clients. Employees come second to the senior manager, from whom they are expected to learn the important skills of evaluating client investments and communicating. In the United States a few years ago, an investment banking employee could expect a starting salary of $100,000, well above what one would expect in many other professional positions.

Whatever path they take in business, young bankers generally expect their career to lead them to a managerial position, with all the prestige that comes with it and millions of dollars in annual salary in recognition of their contribution to the bank's success.




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