Is investment banking for you

The finance industry is one of the largest sectors in most developed economies and as such offers many opportunities to build an exciting and rewarding career. One area which attracts much attention is investment banking. It’s a high profile part of the industry because of the types of business that it specialises in – arranging stock market listings, mega-bond offerings and takeovers for businesses seeking financing and expansion. It is also one of the most lucrative areas in finance, commanding six figure salaries for first year. Accordingly, investment banking is a magnet for those seeking high flying careers. This article, part one of a three part series explores the investment banking industry including the good, the bad and the ugly.
Part one discusses some of the advantages and attractions of working in investment banking.
It’s in the money! Of course one of the top attractions for many is the potential money that comes attached to jobs in the industry. The industry demands a lot from the people that work in it both in ability and commitment. To attract top talent, the industry rolls out large pay packets. Bulge bracket firms such as Goldman Sachs, Morgan Stanley and Merrill Lynch can pay more than six figures for b-school grads. On top of that, there are sign-on and year-end bonuses that can double, triple or generate even higher multiples of base salary. At senior levels the compensation reaches even higher levels of the stratosphere – managing directors can expect as much as mid-seven figures in good years.
Another allure is the fast paced action on offer. There’s never a dull moment as an investment banker. The work involved in arranging share sales, bond offerings, acquisitions and sales of entire businesses is fast paced and complex where details and variables can change rapidly with movements in the markets. This presents a huge challenge for those delivering the goods and ensures that life is almost always moving quickly.
The prestige factor can also be attractive to some. The nature of the business often involves working with major public and private sector organisations, particularly at the leading investment banks. Deals can include initial public offerings of major industry players and soon-to-be market leaders. Depending on the industry and location, transactions can also be industry changing events such as privatisations of state controlled entities.
As an investment banker there is always the opportunity to meet and interact with senior people. Not only is this an opportunity to better understand how top people in a given industry think and operate, it can present opportunities at many points along the career path. On top of private sector contacts, there may also be interaction with senior government officials, especially in countries where the state maintains a high level of investment an industry. These all important connections can prove useful.
For those that are attracted to leadership and responsibility, investment banks do not disappoint. The rapid pace of the industry means that those progressing through the ranks can be given significant levels of responsibility. It is quite normal for those in their mid-thirties to be responsible for entire business units. Investment banking is a big plus for those that like to be boss, although it must be noted that there are many levels of management within the larger banks.
Finally, a career as an investment banker can offer the opportunity for extensive travel, whether it is between cities within the country or as is more and more common, across international borders. As bankers progress through VP and Managing Director levels, there is the requirement to spend more time cultivating and developing client relationships. Often this is done in different cities and different global locations. It can be exciting as well as enlightening to experience the different cultures and places located outside of your doorstep.
And there it is some of the main attractions for signing up as an investment banker – money, travel, action, prestige, leadership and high level connections. Listed together these almost sound like a cliché for the original role of James Bond and perhaps explains why many ambitious graduates are so interested in pursuing investment banking careers.
In part two, the flipside is discussed. Yes, there is a downside. Find out the negatives of life as an investment banker "Investment Banking Questions II – is it for you?"