What Does An Investment Banker Do (including Their Typical Day at Work)

Provide Financial Advice

The main duty of an Investment Banker is to provide financial advice to clients. They offer various banking services, as with the services provided by other Bankers. The difference is that Investment Bankers assist businesses, entrepreneurs, and professional investors instead of the public.

Investment Bankers may help companies devise financial strategies. They may determine which methods are best suited for achieving specific financial goals, such as building more wealth or acquiring another company. Investment Bankers also ensure that companies follow all government regulations when it comes to their financial dealings.

Facilitate the Sale of Stock Shares

Investment Bankers often help corporations raise funding by selling shares of stocks or bonds. Companies may sell stock shares to pay down debts, fund expansion efforts, or diversify their assets.

Selling shares of stocks involves underwriting, which is often completed by the Investment Banker. The process typically requires the Investment Banker to find investors. The investors then sell the shares on the stock exchange market. Investment Bankers facilitate the sale and file the required documents with the Securities and Exchange Commission (SEC).

Along with selling stocks through the stock exchange, Investment Bankers may help sell shares privately. A private sale is typically completed with venture capital firms. Venture capital investors purchase shares of stock without the company needing to file with the SEC.

Assist with Filing Initial Public Offerings (IPOs)

An initial public offering (IPO) is a method used to raise funds when a business has not already sold shares publicly. An IPO is filed with the SEC.

Investment Bankers need to ensure that the IPO complies with all the requirements set by the SEC. They also assess the market to gauge demand and interest for the company’s stock. In some situations, the Investment Banker may advise a client to hold off on their IPO until a more ideal time arises.

Complete Mergers and Acquisitions

Investment Bankers assist clients with mergers and acquisitions. A merger occurs when two companies join to form a new company. An acquisition occurs when a company purchases another company.

Investment Bankers help clients determine whether a merger or acquisition makes financial sense. They then assist with the transaction, including filing all required paperwork.

Provide Asset Management

Investment Bankers may provide asset management services. Asset management services are comparable to the services provider by a broker. The Investment Banker manages the client’s financial portfolio. They recommend the purchase of stocks, bonds, and other investments to help grow their wealth or achieve other financial goals.

Step 1: Study Math and Computers in High School

Investment Bankers need strong math skills, as their job involves analyzing the potential return on large investments. Students should also study computers, as Investment Bankers rely on computer software to develop financial strategies.

Step 2: Earn a Bachelor’s Degree

Most Investment Bankers have a Bachelor’s Degree in Business or a related field. Other suitable majors include Accounting and Finance. The top Investment Bankers typically attend the best colleges and universities, such as Ivy League schools around the US.

Step 3: Consider Earning a Master’s Degree

Earning a Master’s in Business Administration (MBA) is a common choice for Investment Bankers but not strictly required. An MBA provides increased career opportunities, especially in New York, California, and other regions with more competition from other job applicants.

Step 4: Look for an Internship Opportunity

Most Investment Bankers start their careers with internships. Internships are often available at investment banks and other financial institutions. Internships are typically completed during the summer between college semesters.

Step 5: Take and Pass the Series 7 Exam

Investment Bankers cannot directly sell investment products to clients without passing the Series 7 exam. The exams are administered by the Financial Industry Regulatory Authority (FINRA).

The Series 7 exam includes 125 questions and typically takes several hours to complete. It is not considered an overly challenging exam but does require practice and research.

Step 6: Apply for Investment Banking Positions

After gaining experience through an internship and passing the Series 7 exam, start looking for entry-level Investment Banker positions. Entry-level jobs may include the titles Investment Banking Analyst, Investment Banking Associate, or Customer Service Specialist.