Preamble:
Are You Ready for an Exciting and Rewarding Investment
Banker Career?
The lucrative,
prestigious nature of investment banking job makes this a highly desirable and
competitive field. If you have an aptitude for finance, a reasonable tolerance
for risk, outstanding communication skills, and sharp analytical and
mathematical skills, you’ve got the basics required to explore opportunities in
the field. Add in a healthy dose of self-confidence, motivation and
competition, and you’ll be primed for the exciting world of an investment
banker!
Just as banks are at
the center of the global economy, investment bankers are key to structuring the
financial deals that facilitate business operations and keep the economy moving
forward. These highly-skilled, well-paid professionals advise companies on
issuing stock and configuring stock offerings.
What is Investment Bank (IB)?
A financial intermediary
that performs a variety of investment services, including underwriting, acting
as an intermediary between an issuer of securities and the investing public,
facilitating mergers and other corporate reorganizations and also acting as a
broker for institutional clients. Finance dictionary.
Core investment banking activities:
Investment banking
has changed over the years, beginning as a partnership form focused on
underwriting security issuance, i.e. initial public offerings (IPOs) and
secondary offerings, brokerage, and mergers and acquisitions, and evolving into
a "full-service" range including securities research, proprietary
trading, and investment management. In the modern 21st century, the SEC filings
of the major independent investment banks such as Goldman Sachs and Morgan
Stanley reflect three product segments: (1) investment banking (fees for
M&A advisory services and securities underwriting); (2) asset management
(fees for sponsored investment funds), and (3) trading and principal investments
(broker-dealer activities including proprietary trading ("dealer"
transactions) and brokerage trading ("broker" transactions)
In the United
States, commercial banking and investment banking were separated by the
Glass–Steagall Act, which was repealed in 1999. The repeal led to more
"universal banks" offering an even greater range of services. Many
large commercial banks have therefore developed investment banking divisions
through acquisitions and hiring. Notable large banks with significant investment
banks include JPMorgan Chase, Bank of America, Credit Suisse, Deutsche Bank,
Barclays, and Wells Fargo. In Nigeria Stanbic IBTC Bank tops the chart.
Another term for the
investment banking division is corporate finance, and its advisory group is
often termed "mergers and acquisitions". A pitch book of financial
information is generated to market the bank to a potential M&A client; if
the pitch is successful, the bank arranges the deal for the client. The
investment banking division (IBD) is generally divided into industry coverage
and product coverage groups. Industry coverage groups focus on a specific
industry – such as healthcare, public finance (governments), FIG (financial
institutions group), industrials, TMT (technology, media, and telecommunication)
– and maintains relationships with corporations within the industry to bring in
business for the bank. Product coverage groups focus on financial products –
such as mergers and acquisitions, leveraged finance, public finance, asset
finance and leasing, structured finance, restructuring, equity, and high-grade
debt – and generally work and collaborate with industry groups on the more
intricate and specialized needs of a client.
Investment
Banker Job Outlook
The
U.S. Bureau of Labor Statistics (BLS) reports that jobs in the securities,
commodities and other investments industry will experience strong growth
nationwide from 2008 through 2018. As global markets increase levels of
investment, and baby boomers move into their retirement years, demand for investment
bankers’ expertise will grow. Individuals with a strong background in
accounting, finance and economics, industry certifications, and advanced
education, such as an MBA in Finance, should have the best prospects for
landing one of these competitive and high-salary positions.
Investment
Banker Job Duties
Job duties of investment bankers revolve around connecting
the businesses that need financing to the investors who will provide it, in the
form of bonds or stock. They help private corporations go public by structuring
initial public offerings, or IPOs. These offerings are subject to strict
financial regulations, and the companies who undergo IPOs must meet stringent
requirements.
Mergers and acquisitions are another specialty area of
investment bankers. When companies are interested in becoming acquired, or
purchasing or merging with another firm, they seek the expertise of mergers and
acquisitions experts. Investment bankers in this specialty advise clients on
how best to structure a deal, analyze potential gains or losses, and develop
detailed agreements.
Much of an investment banker’s time is spent consulting with
clients in person, by phone or through mobile devices. Other daily tasks may
include conducting research, maintaining data in spreadsheets and creating
reports. Analyzing data and making recommendations are additional activities of
investment bankers.
Most investment bankers put in long hours, but are highly
compensated for their time. Travel, including international, may be required in
this job. In addition, these professionals may spend time outside work meeting
with current and prospective clients and building industry relationships.
Potential
Salary for Investment Bankers
The BLS reports that in May 2010, the average annual salary
for financial services sales agents was $95,130. The middle 50% earned between
$40,860 and $124,450. Salaries for the lowest 10% were approximately $31,330,
while the highest 10% brought in upwards of $166,400 per year. Recent bachelor’s degree graduates will
typically start out toward the lower end of the scale and move up in salary
with experience, but every job seeker is encouraged to do independent research
into local trends and requirements. In addition, investment bankers are
typically paid commissions on the financial products they sell; success in
sales can lead to higher salaries.
Education
and Training for Investment Bankers
Breaking into the investment banking field requires a high
level of education and skill. Employers expect at minimum a bachelor’s degree
in finance, accounting, economics or a related field. Entry-level analyst
positions involve on-the-job training, and usually last from two to three
years. Those with advanced degrees generally begin as an associate, and are
typically in line for promotion to vice president.
The road to becoming a highly-compensated investment banker
can begin with enrolling in a Master of Business Administration
with a specialization in Finance degree program. Coursework typically includes
portfolio analysis, financial markets and institutions, managerial accounting
and investment management.
Employers can be confident that graduates of Advance Business/Finance degree program are able to:
- Solve real-world corporate-level problems in finance.
- Apply the techniques, theories and concepts behind investment policy and strategy development.
- Analyze interest rates and their determining factors.
- Evaluate portfolio performance.
- Leverage advanced skills and knowledge to succeed as an investment banker.
Feel free to leave your comments!
Gracia.
This is the little i can post for now!
ReplyDeletesurely it gets better!
Good one der! CBN
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