Investment banking analyst concept

Posted by: Kaplan Schweser
Published: January 28, 2020

An investment banking analyst evaluates and researches investment opportunities with the aim of finding the investment that best meets the goals of their corporate clients. If you’re thinking about a career in investment banking, you are likely to start out as an investment banking analyst. This article tells you what investment banking analysts do, explains how they differ from investment bankers, and describes how you can become an investment banking analyst.

What Does an Investment Banking Analyst Do?

An investment banking analyst evaluates and researches investment opportunities with the aim of finding the investment that best meets the goals of their corporate clients. An investment banking analyst assesses opportunities and makes investment recommendations based on client needs and goals. Investment banking analysts usually work as part of an investment team and are likely to report to an investment banker who will ultimately guide clients to their final decision.

The corporate clients can be new investors, existing investors, or even the analyst’s own company. If the clients are new, the analyst gathers and processes data, investigates opportunities, and presents the findings to the team and sometimes the client. For existing clients, the analyst evaluates their investments based on performance and makes recommendations for keeping or replacing them. If the client is their company, analysts assess business assets, earnings reports, industry trends, and more to make investment recommendations for their institution.

Other responsibilities include:

  • Reviewing and analyzing data for investment portfolios, including the performance of stocks and bonds, credit trends, and other transactions
  • Presenting the results of their research and investigation to the investment banking team, an investment banker, or even clients
  • Handling administrative tasks such as arranging meetings, generating reports and other materials, and making sure the team operates smoothly

Interested in advice from CFA*®^ charterholders? Download this free Before You Decide to Sit for the CFA Exam eBook.

The Difference Between an Investment Banking Analyst and an Investment Banker

Investment bankers are critical to corporations and communities who want 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. They act as intermediaries between their banks and their corporate clients, assisting in complex financial transactions and issuing securities as a way of raising money. They also use sophisticated financial modeling to determine cost estimates of financial instruments and identify potential risks, project possible earnings, and prepare documentation on behalf of their clients.

Most investment bankers start out as investment banking analysts and hold that position for 2–3 years before moving on to an associate position. If you have just graduated with a degree in finance and want to work in an investment bank, your most likely entry point will be as a financial banking analyst.

How to Become an Investment Banking Analyst

Succeeding as an investment banking analyst is your key to bigger and better opportunities throughout your finance career. Here are the steps you need to take to become one:

  1. Earn your bachelor’s degree. Common majors for future analysts include accounting, finance, and math. However, analysts can come from other majors and still be successful in investment banking.
  2. Complete an internship and start networking. Internships provide you with real-world, practical experience that make you more attractive as a potential employee. They also enable you to start making connections and building your network, which can also help you get the analyst position you want.
  3. Take the FINRA SIE exam and then pass all applicable securities exams. You have to be licensed to sell securities. For some of these licenses, an investment bank will have to sponsor you.
  4. Stand out with the CFA® charter. While not a requirement, the globally recognized CFA charter program focuses heavily on investment valuation, company analysis, and portfolio management, all of which can help you be noticed by employers.

Ready to Get Started?

If a career as an investment banking analyst or investment banker appeals to you, read this article about investment banking for more information. And, if you’re planning to take the CFA exam to set yourself apart in investment banking as a CFA charter holder, exam preparation and education can help.

Before You Decide to Sit for the CFA Exam

Free eBook: Before You Decide to Sit for the CFA® Program Exam

CFA Fundamentals eBook

Free eBook: CFA® Program Fundamentals, 2nd Edition