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How to Become an Investment Banker

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Investment bankers are in the business of underwriting investments on behalf of organizations looking for money to finance expansion plans or operations. In addition to advising clients on the best way to raise funds, investment bankers also oversee initial public offerings, or IPOs, mergers and acquisitions. The banker also sells the securities for clients. The path to becoming an investment banker often begins at a prestigious university.

Start with a Financial Education

You can start in the field with a bachelor’s degree in finance, accounting, economics or business. An internship during your senior year can open doors to entry level jobs. If you want to advance at most investment banks, however, you should pursue a master’s in business administration, or MBA, with a concentration in finance. If you want to work for a large bank -- where most investment banking jobs are located -- you need to excel as an undergrad to assure entry into a top MBA school. According to efinancial careers, an extensive overview of resumes revealed that most investment bankers at big banks earned their MBAs at Columbia Business School, with Harvard, MIT, Yale, Wharton and London Business School running just behind.

Earn Your Creds

While you’re working in an entry-level position, or before you even enter the field, you’ll need to earn a license from the Financial Industry Regulatory Authority (FINRA) to be able to sell investments. There are a host of credentials you can earn by passing examinations through the licensing agency, ranging from a Registered Options Principal to a General Securities Representative. For example, if you pass the Series 26 exam -- also called the Investment Company Products/Variable Contracts Limited Principal exam -- you can solicit, buy and sell redeemable securities of companies. Successful completion of the General Securities Representative, or Series 7, exam qualifies you to purchase and sell all securities products, from corporate and municipal securities to variable contracts and investment company products.

Get In the Ground Floor

Investment banks often hire entry-level financial services bankers for a period of two or three years to see if they perform sufficiently before promoting them to higher-level accounts. According to the Bureau of Labor Statistics, it’s called an “up or out” policy and serves as a breeding ground for successful investment bankers because banks don’t want to keep those starting positions filled by poor performing individuals. For example, with a bachelor’s degree in finance and a Series 7 credential, you could work as a securities sales agent and train under a more experienced analyst to refine your sales strategies. You might start by just managing existing accounts for senior bankers. Employers usually provide extensive training to entry-level securities agents. Find entry-level jobs and additional training by attending conferences and networking through industry organizations such as the National Investment Bankers Association and the International Association of Investment Bankers.

Prove Your Worth

Once you’ve attained your MBA -- a prerequisite many employers require for advancement -- you’ll need to prove your value primarily by bringing in new accounts and meeting and exceeding sales goals. Additional FINRA designations also can help you advance. Leadership qualities are valued as well, paving the way for supervisory and management positions. In addition to being high producers, successful investment bankers need the kind of expertise that lets them make split-second decisions as markets shift, build lasting relationships with lucrative clients and develop cold-calling skills to generate new business. Exceptional math skills also are vital to be able to judge profit margins accurately and quickly.


About the Author

Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."

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