How To Become An Investment Banking Associate

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How To Become An Investment Banking Associate – Do you want to learn about the investment banking career path with simple and visual explanations in English? If you’re exploring investment banking as a career choice, you won’t find a more detailed explanation. After reading this article, you will understand:

For more information on career paths, recruitment periods, roles and responsibilities, and typical salaries for investment banking, see the rest of the article.

How To Become An Investment Banking Associate

For many people, the world of investment banking (or “IB”) is incredibly transparent. That’s why it’s so hard to figure out how to make a career in investment banking.

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This detailed article provides a simple, illustrated and plain English overview of investment banking career paths, roles and responsibilities and typical investment banking salaries.

However, they perform a specific function (as you can see above). In addition, the capital markets career path is slightly different.

The focus of this article is the career path for the “core investment banking” department. You can compare the investment banking department to real estate agents.

Banks charge a fee based on a percentage of the sale value of the business or the money raised.

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However, it should be noted that within each investment bank, the services listed above are divided into Industry Coverage (focusing on an industry sector) and Product Groups (focusing on a specific service, such as M&A).

In addition, the financial world often refers to investment banks as Bulge Bracket banks and . Elite Boutique vs. Middle market.

One of the most frequently asked questions right now is, “What is a career path in investment banking?”

While there is no typical path, there are two main entry points for a career in investment banking: Pre-MBA and Post-MBA.

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As we’ll discuss shortly, the pay is pretty high compared to most other jobs (ie six figures or more out of school).

Working at IB early in your career also opens doors to a variety of challenging (and even better-paying) job opportunities.

Whether pre-MBA or post-MBA, entry-level investment bankers tend to be high achievers with high GPAs, high test scores, and a track record of repeated success (in and out of school).

While it’s possible to get a full-time job at an investment bank without a summer internship at that bank, openings are far less common.

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Although it may sound a little crazy, recruiting for junior summer internships takes place 12-18 months before the internship begins.

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As a result, aspiring analysts must prepare for work in their second (and sometimes first) year of college.

However, in recent years, banks have realized that they are losing a large number of talented students and are very open to “non-targeted” students.

So the good news is that you can get into a “non-targeted” school, but it just takes a little more work, mostly in the form of casting a wide net.

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While people enter IB through all three routes discussed above, MBA graduates make up the majority of post-MBA bankers.

Like pre-MBA recruitment, post-MBA recruitment is highly competitive. However, recruiting at the MBA level is a bit simpler.

Investment banks flock to the campuses of top MBA programs to recruit. This usually takes place 3-5 months before the start of their summer internship (between their first and second year).

Whether pre-MBA or post-MBA, targeted or non-targeted, there are some common things you need to do to get into investment banking:

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I explained how people usually get into IB. Now let’s take a closer look at each role in the investment banking hierarchy.

Note: The compensation rates mentioned here are for top tier banks. Compensation is usually lower for smaller and/or regional banks.

When a full-time analyst is on the job, he or she is usually immediately “busy” with one (or more) assignments.

While senior and mid-level investment bankers stress the big lines, analysts (supervised by Associates) are “in the thick of it” and are typically tasked with:

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When your client is the CEO of a large company and is making what is often the most important decision of his career, whether it be a merger or a capital raise, time is of the essence.

If you’re asking yourself, “Why would I want one of these jobs?”…that’s a fair question.

While all three factors above are important, given that most analysts only stay for two years, the biggest factor for many analysts is career opportunities after investment banking (or “Exit Opps”).

As mentioned earlier, most associates come from top-tier MBA programs, are lateral hires, or are promoted directly from an analyst role.

Investment Banking Job Interview

While the analyst creates the underlying material, the associate is responsible for the quality and accuracy of the work.

While some partners find roles in hedge funds and private equity, it is more common for partners to move into corporate development or corporate finance roles.

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Typically, VPs lead (or “quarterback”) the execution of each transaction. Thus, VPs are the “buffer” between senior bankers and junior bankers.

They support the needs of senior bankers and ensure team cohesion and execution with junior bankers.

Investment Banking Careers

The VP role is more customer focused than the Associate role. VPs are often invited to client presentations.

Once a client commits, VPs often take charge and work with the client to ensure their satisfaction.

After three to four years in the role, the vice president is promoted to senior vice president (or “SVP”).

They have earned their reputation as business executives. But at the same time they have to prove that they can bring in new business.

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Most SVPs play a hybrid role. For example, SVPs support physician closing deals and also work to bring in new business (often in underserved subsectors).

If you’ve made it this far in this article, you’re probably asking yourself, “What do I need to succeed in this career field?”

There is no single formula for success. However, there are common threads for most successful IB candidates.

If you’re still reading, then maybe a career in investment banking is for you.

Investment Banker Lifestyle

IB is a career to follow. However, the rewards can be substantial if you are willing to face the challenges.

Ultimately, the main question should be whether or not investment banking is a good career path for you.

A career path in investment banking is a challenging (yet rewarding) field that requires a variety of skills at every level.

If you enjoyed this article, be sure to check out our full animated Investment Banking Career Path video.

Typical Hierarchy Of Investment Banks

Mike Kimpel is the founder and CEO of Finance|able, a cutting-edge financial professional training platform. Throughout his career, Mike has worked in investment banking, private equity, hedge fund and mutual fund.

He is an adjunct professor in the Value Investing Program at Columbia Business School and is a finance division of Access Distributed, a nonprofit organization that provides access to top careers in finance for underserved high school students.

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Investment banking is a challenging career, but opens the door to a number of exciting career options (banking) while earning six figures or more straight out of school.

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How To Become An Investment Banker

Investment bankers at top banks typically make over $100,000 a year (even $200,000) straight out of college. MBA graduates typically earn more than $250,000 per year right out of school. Top-level bankers (ie CEOs) can make over $1 million a year, and superstar bankers can earn $10 million or more.

If you’re a student at a major (ie “target”) or top MBA program, then investment banks are coming to your campus to recruit.

If you’re not at a “target” school, you can still get in completely, but you’ll have to do a lot more legwork. This will mean a lot of networking with alumni from your school or any contacts you have in the world of investment banking.

An entry-level position in investment banking is an analyst role. The next level is Associate, which most people join from an MBA program. In addition, investment bankers are promoted to vice president (or director), senior vice president (or managing director), and finally to the senior role of managing director.

Corporate Investment Banking

Investment banking can be an incredibly rewarding option to accelerate your career. However, it’s hard work, with 80-100+ hour weeks in the early years and a 24/7 on-call requirement for your clients as you peak.

While it’s certainly easier to get started in investment banking with a finance or accounting major, it doesn’t require math beyond basic algebra.

As a result, investment banking analyst classes include a wide variety of majors, from liberal arts to engineering.

If you are in a major (ie “target”) school or MBA program, then the investment banks on campus will be involved.

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If you’re not at your “target” school, you’ll need to network extensively with alumni from your school or any contacts who work in the field.

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