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How to Become an Investment Banker

By: Kaplan Schweser
December 11, 2020
Office building in large metropolis with Investment banker offices

Investment bankers are critical to both corporations and communities looking to raise money to fund their activities. Investment bankers underwrite securities and help corporations navigate through some of the most difficult business processes, such as mergers and acquisitions and initial public offerings.

A bachelor’s degree in finance, accounting, math, or another banking-related discipline will provide a solid educational base for a career in investment banking. For the purposes of this article, we will assume that you are in the process of earning your bachelor’s degree or have already earned it.

Step 1: Secure an Entry-Level Position

If you’re currently in school, or you recently graduated and are having a hard time landing a job, it’s wise to consider an internship. Interns usually receive an immeasurable amount of valuable training and experience that can be incredibly useful as you begin pursuing a career. If things go well in your internship, you may also have an opportunity to hire on in a full-time position with the company. But even if you don’t, you’ll gain solid marketable experience that should help open other doors for you.

Your first entry-level position will likely be as an investment banking analyst. Most firms provide substantial on-the-job training, where you’ll learn the basics of performing in your new role. You’ll be called on to pull data together, work with financial models, and manage client relations.

You can begin your career in investment banking immediately after you finish your bachelor’s program. After you’ve earned employment, you will need to register as a representative of your organization with FINRA. You may also need to complete specific series examinations to qualify for registration, depending on the nature of your day-to-day work.

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Step 2: Complete Advanced Education and Training

Your bachelor’s degree will likely be sufficient for helping you land an entry-level position in investment banking. But if you aspire to advance in your career, you may consider pursuing an advanced degree. While a Master of Business Administration (MBA) is the most popular advanced degree path for those in the investment banking field, it’s not the only option. A graduate degree in a different, but applicable, discipline might be a good complement to your finance-based undergraduate degree. A master’s degree, especially if it’s from a reputable business school, can be expensive. But it isn’t your only option for advancement in the investment banking industry.

Step 3: Earn additional Certifications

The Chartered Financial Analyst® (CFA®) charter is also a popular pursuit for advancement in investment banking. Earning the CFA charter requires you to successfully pass three levels of exams and possess 4,000 hours of qualified work experience. The CFA exam requires a significant investment of preparation and study time, and it isn’t easy. Candidates report studying an average of 300 hours per level, and more candidates fail than pass Levels I and II. But earning the charter puts you in an exclusive club of roughly 120,000 charterholders worldwide. Earning the CFA charter is also considerably more affordable than earning your MBA. Even with premium CFA study materials, you can complete the CFA Program for under $12,000.

Investment banking is an incredibly attractive career with significant earning potential. Now that you better understand how to become an investment banker, remember the same principles that apply to any other achievement in life apply here as well. Work hard, be disciplined, and carry a thirst for knowledge and experience, and you will set yourself up well for a bright future as an investment banker.

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