Investment banking sounds exciting and alluring. And it lives up to its
reputation. If you're good at this type of work, you really can become rich.
"Total compensation can explode to $8 to $10 million," says Bruce Neuman.
He is a recruiter in New York. But think a little more modestly in the beginning.
Investment bankers work in investment banks, corporations, brokerages or
small investment banking firms. They counsel clients on financial issues such
as arranging capital, managing assets, trading securities and issuing stock.
"People who enter the investment banking field should be highly motivated
and well rounded," says investment banker Marc A. Cabrera.
People tend to start in entry-level positions such as junior analyst. They
continue up the ladder as analysts, associates, vice-presidents, directors,
managing directors, partners and CEOs.
"Every stockbroker is starting to call themselves an investment banker,"
says Allan Kennard. He works with a financial services company. "The more
traditional definition refers to sourcing equity and debt capital for corporations:
'corporation finance.'"
Carla Frank of the Women's Business Connection in Los Angeles is pursuing
a career in corporate finance. "The main reward in this field is being able
to help a company grow. In order for a company to be successful, it needs
a great product or service and the ability to provide that product or service
to its community," she says.
"Corporate finance professionals help in obtaining financing to start a
company or maintain existing companies' working capital needs. [They] analyze
the costs and benefits of different investment opportunities and provide financial
support to all areas of the company."
Math skills are one of the keys to success in this field, she says. "Computer
skills are the important tool in corporation finance. The ability to work
with spreadsheets such as Excel is crucial. Good communication and interpersonal
skills are also important. Corporation finance is as much about working with
people as with numbers."
James Lorimer is an investment banker. He says on your first few months
on the job, you can expect to "analyze the value of a public company, determine
how a company considering going public should be valued, prepare a presentation
to your superiors and to the company explaining the value."
He recommends you learn the following:
- Analytical skills
- Specific valuation and financial analysis
- Financial statement analysis
- Spreadsheet modeling
- Communication and writing skills
Investment bankers work in comfortable office environments. Expect to spend
a lot of time there. When you're first starting out, hard work and long hours
are expected. This is a profession where you need to prove yourself.
Even when you get near the top, performance counts. Slack off a little
on your work and you probably won't have a job (or a good reputation) for
long. On the up side, hard work and good results are respected and admired
in this profession.