How to Become an Investment Banker

By: Kaplan Schweser

October 24, 2022

Investment bankers are critical to both corporations and communities looking to raise money to fund their activities. Investment bankers underwrite securities and help corporations navigate through some of the most difficult business processes, such as mergers and acquisitions and initial public offerings.

Key Takeaways

A bachelor’s degree and or a master's degree in a related field is often required to become an investment banker.
Investment bankers often start their careers as analysts and do so by earning the CFA charter.
Independent investment banks often pay higher bonuses to entry-level investment bankers.

TABLE OF CONTENTS

Qualifications
How Long Does It Take To Become an Investment Banker?
Steps To Become an Investment Banker
Highest Paying Investment Banks

Investment Banker Qualifications

A bachelor’s degree in finance, accounting, math, or another banking-related discipline will provide a solid educational base for a career in investment banking.

It’s common for investment bankers to hold undergraduate and MBA degrees from competitive universities such as The Wharton School of the University of Pennsylvania. Internships are also fiercely competitive within investment banks, which often recruit individuals directly from school for analyst positions.

Entry-level investment banker positions usually require analysts to possess technical skills like financial modeling.

How Long Does It Take To Become an Investment Banker?

It can take 4-6 years to become an investment banker. If you are currently pursuing a relevant undergraduate or graduate degree from a prestigious university you may be able to become an investment banker after graduation by being recruited.

What Does an Investment Banker Do? >>

Steps To Become an Investment Banker

There are generally three steps to becoming an investment banker with multiple options at each step.

Step 1: Secure an Entry-Level Position

If you’re currently in school, or you recently graduated and are having a hard time landing a job, it’s wise to consider an internship. Interns usually receive an immeasurable amount of valuable training and experience that can be incredibly useful as they begin pursuing a career. If things go well in your internship, you may also have an opportunity to hire on in a full-time position with the company. But even if you don’t, you’ll gain solid marketable experience that should help open other doors for you.

Your first entry-level position will likely be as an investment banking analyst. Most firms provide substantial on-the-job training, where you’ll learn the basics of performing in your new role. You’ll be called on to pull data together, work with financial models, and manage client relations.

You can begin your career in investment banking immediately after you finish your bachelor’s program. After you’ve earned employment, you will need to register as a representative of your organization with FINRA. You may also need to complete specific series examinations to qualify for registration, depending on the nature of your day-to-day work.

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Step 2: Complete Advanced Education and Training

Your bachelor’s degree will likely be sufficient for helping you land an entry-level position in investment banking. But if you aspire to advance in your career, you may consider pursuing an advanced degree.

While a Master of Business Administration (MBA) is the most popular advanced degree path for those in the investment banking field, it’s not the only option. The Master of Science in Financial Analysis (MSFA) program at the College for Financial Planning®—a Kaplan Company is an online format program.

The MSFA program can be completed in under two years on a part-time basis. The program provides in-depth content in specific investment areas needed to practice financial analysis and investment management.

Step 3: Earn additional Certifications

The CFA charter is also a popular pursuit for advancement in investment banking. Earning the CFA charter requires you to successfully pass three levels of exams and possess 4,000 hours of qualified work experience. Each exam requires a significant investment in CFA preparation and study time, and it isn’t easy.

Considering the CFA charter? Download this free Before You Decide to Sit for the CFA Exam eBook.

Another popular option for investment bankers to accelerate their careers is by earning an ESG certification. Most ESG certification programs take about one year to complete. Each program has its own steps to earn an ESG certificate, which will dictate exactly how long it takes to earn the certificate.

Highest Paying Investment Banks

Often analysts, associates, and vice presidents at elite boutique investment firms will earn more than their counterparts at larger full-service banks. Elite boutiques often pay higher bonuses to lower-level investment bankers and have the opportunity to work on smaller teams because they focus on specific industries or regions. Some high-paying investment banks are