How to Become an Investment Banker

The issuing, management, and sale of financial securities, such as stocks, is a complicated and highly regulated process. As such, companies hire investment bankers to assist them in this and related processes.

Investment banking is a suitable career for someone skilled in math. Investment bankers should also have a good mind for laws and regulations to navigate the complex legal landscape surrounding investment banking. To become an investment banker, students pursue an education in finance. While you can begin as an investment banker with a bachelor’s degree, most eventually pursue a master’s degree.

Investment bankers typically begin their careers as analysts for an investment bank. After work and further education, they can be promoted to analyst or vice president, where they begin managing and supervising newer investment bankers.

Typically, these upper-level jobs require a master’s in finance or an MBA. After work in investment banking, many pursue other jobs in finance, such as hedge fund management, corporate finance, and venture capital.

According to Payscale, the average annual base salary is $116,180 for these professionals, as of June 2024. However, total compensation including bonuses and investment opportunities can lead to high six- to seven-figure total compensation by mid-career.

A career in investment banking is a highly structured process. Beginning in college, aspiring investment bankers study finance. They then pursue entry-level positions, before most seek a master’s degree. While working as an investment banker, they also obtain necessary licenses to conduct their business.

An accredited degree program ensures that you are receiving an education that meets the standards of an accrediting body licensed by the U.S. Board of Education. This is important as it means you will be getting an educational background that will prepare you for work and will be recognized by a potential employer.

Generally, investment bankers need to get securities licenses to perform their work. They cannot get these licenses until they are working and are sponsored by their employer. However, before employment, a student can take the Securities Industry Essentials Exam, a prerequisite exam to other licensure exams.

The average cost of pursuing a career in investment banking is relatively high compared to other positions. While the bachelor’s degree costs the same, the majority of the expense comes from the need to pursue an MBA or master’s in finance. However, these costs may largely be defrayed by an investment banker’s high earning potential.

Investment bankers make an average base salary of $116,180, according to June 2024 Payscale data. However, total compensation is typically higher, with bonuses. With a master’s degree, salaries may go to the high six-figures.

To become an investment banker, you need a minimum of a bachelor’s degree. Common majors are finance, business, economics, and accounting. You also need to pass licensing exams to work as an investment banker. The initial Securities Industry Essentials Exam can be completed at any time, but securities license exams are taken while employed.

To advance as an investment banker, most employers require an MBA or master’s in finance. Connections made during a master’s program also provide an important network for relationship-based sales work.

The fastest way to become an investment banker is to apply for an entry-level position, typically an investment analyst role, after graduating with a four-year bachelor’s in finance. Choosing an accelerated degree program can shorten time to graduation and allow you to enter the workforce quicker.

Positions are typically competitive in this industry. Additional education, such as an MBA, can provide an advantage in securing an entry-level position. Some initial work in the banking industry can help you pursue a top MBA program.

Investment securities are tradable financial assets that are held as investments. Over time, these assets grow in value, becoming one of the main sources of revenue for a bank.

As part of their job, an investment banker analyzes securities, predicting which will be strong investments, and how the bank can best manage the assets they have. The industry is highly regulated, so investment bankers need to be licensed to trade them.

You can become an investment banker with an online degree in the most general terms. A bachelor’s degree is the only real requirement for entry into the profession.

However, the field is highly competitive, with many employers hiring graduates primarily from top universities. Applicants from any background should make sure their application stands out by supplementing their resume with further education and internship experience.

Investment bankers are among the highest-paying jobs. In an entry-level position with a bachelor’s degree, Payscale reports an average salary of $116,180, as of June 2024. However, bonuses in investment banking can be close to or equal to salary.

Later in their career, with an MBA or master’s in finance, total compensation can increase greatly.

These salaries make it more than worth it to pursue graduate school, balancing the expense of a terminal degree.