Is a career in investment banking worth it?

Investment bankers are often the highest paid workers in the financial industry; high wages are more prevalent even among the youngest employees. The typical investment banker’s starting salary exceeds that of most other financial positions, but working in this field has its challenges. Aspiring finance professionals may wish to examine whether a career in investment banking is worth it.

key findings

  • While the payoff is high, so are the pressures in the investment banking profession.
  • Investment bankers sometimes work long hours and often under time pressure to close a deal.
  • Despite the traditional culture of conspicuous work, many investment banks are re-evaluating workloads and encouraging employees to maintain less stressful hours.

Investment banker working environment

An investment banker works with companies and government entities that raise capital, and bankers also provide advice on mergers, acquisitions, and reorganizations. Investment bankers traditionally work long hours, sometimes up to 100 hours per week. Bankers are under time pressure at times, as projects often have tight deadlines.

However, the banking culture also values ​​and admires people who work long hours, and many companies have a conspicuous work culture. This term refers to a corporate culture in which each employee is aware of the hours worked by everyone else, and this situation creates competition to take on more work at all costs.

A reliable banker is given more work and that leads to a work schedule that often becomes unmanageable. The work environment can have a physical and emotional impact on many people who work in the industry.

Deaths and investment banking

In 2015, two young investment bankers took their own lives. Shortly before his death, both workers suffered from lack of sleep and both approached their relatives to explain how much they were working. These recent tragedies led many companies to change their corporate policy on working hours. Some companies have a protected weekend policy, which means that bankers cannot work on specific weekends. Almost all companies now ask workers to refuse additional work if that work results in too many hours in the office.

Ironically, recent studies have shown that overwork leaves bankers less productive, which means that more hours do not generate the same level of quality work. A general rule of thumb is that a banker should not work on more than two banking arrangements at a time, or the workload is not manageable.

$ 82,027

The typical basic starting salary for an investment banker, not counting signing or performance bonuses.

Traits of Successful Bankers

Finance professionals must consider whether they have the personal characteristics necessary to be successful in investment banking. In addition to long hours, a banker must be able to handle stress well and work on multiple deadlines at once. The banker must also speak up and decline the job, if the existing workload is too demanding. Investment bankers need to be able to start projects on their own and manage time well.

Alternatives to investment banking

Investment banking firms traditionally hire new associates from the best MBA programs in the country. However, many of these students no longer view banking as a career. Elite MBA programs, like Harvard Business School, are seeing more graduates moving into tech startups and other fields, such as private equity and corporate finance. This change has also led banking companies to evaluate the number of hours each banker works and, if those hours are justified, given the demands of customers.

The bottom line

If a professional is unwilling to make these sacrifices and is not primarily driven by money, that worker may not be successful as an investment banker. Finance professionals who need a work-life balance should not work in investment banking.

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About the author

Mark Holland

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