How to Become an Investment Banker: A Guide for Aspiring Students

A career in investment banking is highly sought after due to its rewarding nature. Successful investment bankers often enjoy lucrative salaries, ample networking opportunities, and the opportunity to play a prominent role in corporate success stories. In fact, Singapore’s investment banking sector is flourishing as the nation is considered an epicentre of finance, banking, and investment in the APAC region.

However, building a career in investment banking requires a solid foundation of financial expertise whether it’s through finance-related internships or degrees. If you want to learn more about investment bankers, their responsibilities, and how to become one, then you’ve come to the right place!

What is Investment Banking?

Essentially, investment banks provide a wide range of services to corporations, governments and other organisations, assisting in large and complex financial transactions. They can act as intermediaries between corporations that want to raise capital, and investors who are willing to provide money. They also advise companies on large-scale transactions like mergers and acquisitions (M&A), and debt and equity issuances.

When discussing the financial market, the names of the largest investment banks like Goldman Sachs and Morgan Stanley often come up. Headquartered in New York, these financial powerhouses maintain a global presence in major financial hubs, catering to a diverse clientele with deals over $1 billion USD in size. Having any of these companies on your resume is a surefire way to open more doors throughout your career.

Here’s a typical career progression in investment banking:

• Investment Banking Analyst
• Investment Banking Associate
• Vice President
• Senior Vice President / Director
• Managing Director (MD)

Alternatively, there are plenty of exit opportunities for investment bankers with many individuals venturing into careers in private equity, hedge funds, or corporate finance after a few years in investment banking.

What does an Investment Banker do?

An investment banker’s work is diverse and interesting because of the breadth of services provided by an investment bank. As such, pursuing a career in this industry will equip the individual with strong transferable skills that opens up plenty of career opportunities. Generally, investment bankers leverage their expertise in the current investing climate and economic affairs to tailor their recommendations for the client.

Investment Banking Analyst

At the entry-level, investment bankers will join as an Analyst and some of their responsibilities include:

• Preparing powerpoint presentations for pitch books and client meetings
• Conducting spreadsheet-based financial modelling and valuation
• Other administrative and research tasks

The core responsibility of an Analyst is to support the team in areas like financial analysis, win new projects with institutional clients, and aid in the execution of such projects. Analysts typically spend two to three years in this position before earning promotion to the Associate level.

Investment Banking Associate

At this level, Associates either possess a significant amount of experience or hold an MBA. As such, their core responsibility is to supervise junior analysts and report their findings to senior management. Associates typically spend three to four years at this level before looking for promotion.

Some additional responsibilities of an associate include:

• Conducting further analysis using more complex models
• Finalising presentations
• Client management and interaction
• Negotiation support and deal execution
• Works closely with senior bankers and junior analysts to ensure seamless transactions

Vice President (VP) and Senior Vice President (SVP) / Director

Investment bankers at this level assume a project management role with fewer hands-on responsibilities. It’s important to note that this title is not necessarily the vice president per se with high decision making power and seniority. In fact, you can expect to see several people sharing the title. It takes around three to four years for VPs to ascend to the next level.

Some additional responsibilities of a vice president include:

• Direct communication with Directors and Managing Directors
• Delegate work and management of associates and analysts
• Source for new deals for the bank
• Client interaction and building relationships

Managing Director (MD)

At the highest level, MDs have the primary responsibility of generating revenue for the bank. As such, most of their time is spent meeting clients, developing relationships, and closing deals. MDs have more autonomy than VPs, and they spend far less time on project management and execution.

Some additional responsibilities of an managing director include:

• Meeting with existing clients and potential new clients, pitching and winning clients
• Internal meetings with VPs and SVPs to discuss deals and recruitment

How to become an investment banker

Internships

Internships are a popular entry method for many investment bankers as it provides the necessary experience and avenues for networking. In fact, many investment banks favour internships as a recruitment method as it acts like an extended job interview. Investment banks often seek candidates with a strong background, making industry-relevant internships highly valuable. As such, try to source for an internship with a top investment bank.  For instance, JP Morgan offers an Investment Banking Analyst Program, which could be an excellent opportunity worth considering. If you didn’t manage to secure a role, it is still wise to approach smaller banks.

Undergraduate degree

A bachelor’s degree is the minimum educational qualification required to become an investment banker. While a degree in finance is generally preferred, accounting and business administration degrees are also an option. Even though it is possible to progress to a senior role without a master’s degree, many mid-level and senior investment bankers attain their master’s for better career advancement opportunities.

Given that major investment banks often recruit candidates from the best universities worldwide, here are some of the top finance and business programmes available.

Business and Finance-related programmes

Networking

In a highly competitive and specialised industry, the importance of networking cannot be understated. Especially in a highly competitive market like Singapore, networking can be a key step in making the breakthrough. Try connecting with alumni or professionals in your target companies through LinkedIn!

It’s always best to start with your alumni as you both have something in common. Try getting some insight from your alumnus regarding the recruitment process, and their firsthand experience, or seek their assistance in connecting you with other professionals. The key idea here is to network extensively and build connections with as many professionals! It’s also a good idea to attend local networking events, workshops, and recruitment drives organised by banks or other organisations.

Professional Certifications

While professional certifications aren’t required to get started in this industry, they do provide an additional edge. Here are a few common certifications to help you get started.

Chartered Financial Analyst (CFA)

The CFA is one of the most popular certifications for finance professionals. Administered by the Chartered Financial Analyst Institute, it’s designed to equip candidates with the expertise and real-world skills in investment analysis. Candidates are required to complete and pass three exams that test the fundamentals like investment tools and portfolio management, to earn the CFA designation. This qualifies charterholders to work in more senior and executive positions in investment banking.

Financial Risk Manager (FRM)

Granted by the Global Association of Risk Professionals, the FRM Certification is the benchmark for academic excellence in risk management. It equips candidates with the skills needed to identify, analyse, and mitigate risk in real-world situations. To earn this certification, candidates need to pass two challenging and rigorous exams, while also possessing at least two years of work experience. However, certificate holders are well poised to add value in various specialised areas.

Certified Financial Modeling & Valuation Analyst (FMVA)

Administered by the Corporate Finance Institute, the FMVA certification provides a range of courses, building your mastery in modelling, budgeting, forecasting, and overall competency in accounting and finance. With various electives to choose from, candidates will be equipped with the essential skills and tools needed to succeed in the field. This course is highly useful if you don’t want to focus on a specific role like M&A or debt capital markets. Its flexible nature gives you the freedom to select what you want to learn and tailor it to your needs.

Key Resources & Further Reading

• Beyond the Numbers: What Can You Do With a Finance Degree?
• The Fastest Way to Become a Trader on Wall Street
• Aurora’s Decision To Go To UPenn, Wharton Business School