How to become an investment banking analyst

Wall Street has changed after the Great Recession of 2008 and 2009 and that has changed the role of the investment banking analyst. As any aspiring analyst knows, the job is demanding and the responsibilities are wide. Here’s a look at the basics.

Key takeaways

  • Investment banking is a highly sought after career path for those seeking a financial job, which can come with great payoff.
  • The entry-level position at most banks is that of an analyst, and these job openings are highly competitive.
  • Banks are looking for smart, skilled, and educated candidates who already have a firm grasp on financial modeling and quantitative skills.

What banks are looking for

Banks, brokerages and other financial services companies will favor candidates who bring the following “must-have” attributes to the negotiating table:

  • Deep insight into the changing demographics of financial consumers, including millennial investors who will inherit $ 30 trillion from their Baby Boomer parents and foreign investors who will move out of the middle class and become well-off investors.
  • A perfect understanding of investment risk and securities analysis.
  • A clear, concise and convincing handling of the new banking business model, which emphasizes caution over aggressive risk-taking.
  • Great experience in statistics, quantitative analysis and information modeling.

Viable candidates will have a bachelor’s degree in finance or business, and perhaps an advanced master’s degree in business administration (MBA) for investment banking analyst positions, although financial services firms hire college students in finance and business from high schools. level for entry-level analyst positions. .

New analysts can expect long work weeks (80 hours is not unusual) and will work closely with company CEOs to “fill in the blanks” of investment strategies those managers favor.

Typical Duties of an Investment Banking Analyst

Expect to spend most of your hours on the following tasks:

Examine industry research

Investment banking analysts generally fall into specific industry categories, such as finance, healthcare, manufacturing, or emerging markets. They will speak with company executives and investors and try to build cases for or against investments in specific companies or industries.

Create financial valuation models

A clean setup with online spreadsheets and investment models is vital for an investment analyst. Tracking financial trends, isolating revenue and business cycles, and measuring performance in increasingly competitive global markets will be on the menu for new analysts, and in large doses.

Produce investment presentation materials both online and offline

New investment banking analysts are expected to be good communicators, to both the retail and institutional investment banking public. Researching, writing, and editing research reports, status reports, PowerPoint presentations, informational books, and presentation books for new initial public offerings (and often managing your travels through the editorial and production line) are key tasks. for banking analysts. Sudden and seemingly unreasonable deadlines for the delivery of these materials are also part of the everyday life course of an investment banking analyst.

The “fast track” to becoming a banking analyst

Candidates who land the best analyst jobs at high-end investment firms on Wall Street have a few attributes in common, including:

  • A bachelor’s degree from one of the best universities;
  • A heavy undergraduate class workload in subjects such as accounting, finance, statistics, economics, and business administration;
  • An MBA or Master of Finance from a top business school;
  • A heavy workload in graduate school class on bond valuations, option and pricing trading, tax law, and risk management; and
  • Relevant work experience such as a summer internship at a large investment bank.

What to look for in a job interview

Candidates for banking analysts should be prepared to promote their experiences, whether in their academic studies or in their careers. Be prepared to discuss your analytical and problem-solving skills. The interviewers will likely also ask you to define and develop your interpersonal skills, your work ethic (those 80 hour weeks may or may not come up, but prepare as they will and have a good answer ready).

Investment firms will give an advantage to candidates who can speak multiple languages ​​(Chinese, Spanish and German are the most favored these days) and to candidates who have a strong knowledge of technology and social media.

When you arrive at the bargaining table, know that the average annual salary for an investment analyst is $ 66,492, while financial analysts generally charge $ 83,660. Additional compensation, such as signing bonuses or annual performance-based bonuses, is generally available, but these payments will vary greatly by employer.

One additional tip: While you can start your bank analyst job search on any date on the calendar, Wall Street firms typically deliver their annual bonuses in December, after which some analysts may decide to jump ship. So, start your search in November and intensify it in December and January, just when hiring managers are looking to make a move.

If you’re a college graduate looking to get in, Wall Street firms often host job fairs, “Super Saturdays” (recruiting events held on Saturdays at the financial institution), and social media to break the ice, usually in the spring months. Check with your college’s career and employment office for details.

The bottom line

Getting a job as a financial analyst can be a gateway to a lucrative career on Wall Street. Expect to work hard and be ready to listen. Do all of the above, and you greatly increase your chances of landing your dream Wall Street analyst job.

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About the author

Mark Holland

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