Pursuing the investment banking career path requires candidates to possess analytical and math skills. These skills can be learned and mastered in college. While in school, banking career candidates must take courses in finance and accounting where they will learn financial statement analysis. Although this career can be entered into with a Bachelors degree, it is very hard to receive a promotion without a Masters degree. Candidates should work hard to achieve high grades to stand out from fierce competition.

The investment banking career path has three levels candidates can pursue. The entry-level career path is titled Investment Banking Analyst. This level requires a Bachelors degree and 0-2 years of work experience. Professionals at this level must have knowledge concerning equity transactions. They should also possess strong computer skills. They are expected to make about $50,000 to a little over $100,000 in salary and bonuses. Part of their job is to assist senior level investment bankers.

The mid-level career path is titled Associate Investment Banker. This professional will acquire vice president status at this level. They should have about 3-8 years of professional banking experience. At this level they should be comfortable with acquiring new clients for their investment firm. Their presentation skills to clients should be highly professional. They are expected to make about $185,000 to over $350,000 in salary and bonuses.

The senior-level career path is titled management consultant. This professional will acquire Director, senior vice president status at this level. These professionals should have over 9 years of experience. They should be experts in both the entry and mid-level career paths. They should have strong negotiation skills and experience closing complex financial transactions. The salaries and bonuses at this level ranges from about $300,000 to over $1,000,000. They are responsible for managing investment bankers at the senior and mid-level career paths.

People who go into investment banking must have the will to succeed. It is a very competitive field that takes commitment to climb to the ultimate position of management consultant. The hours are long and require time on many weekends. Additionally, the offices where investment bankers work can be very stressful and demanding. Therefore, people should think carefully about this field before entering into it. However, as stated earlier it has many financial rewards. With hard work, dedication and confidence a person can be well on their way to success in investment banking.

Investment banking will cover the purchase and selling of government securities, in the form of treasury bonds, bills and notes (depending on their length of maturity). Of course hefty commissions are involved from which the investment banker will get a cut. These same treasury securities are marketed to investors at the weekly and other time specific auctions.

An investment banking career will have the individual involved in watching over the investments of clients. These investments, in a great many cases, will be put to work so that the person’s retirement will be well funded. This can be in the form of government securities, annuities, corporate paper and bonds. This is not the entire list of possible investments that an investment banker will handle.

Those with substantial funds will have a personal investment banker. People with somewhat less to invest will do so via the internet in many cases. Not to be left out are the currency and commodity markets. Here an investment banker will advise clients as to the timeliness of investing in world currencies. This might involve buying Euros for dollars or in purchasing gold. Gold can be purchased and possession taken or can be left in the possession of a third party. Futures in the energy market in the form of oil and gas futures can be a vehicle of investment. The investments in commodities, currencies and futures require much sophistication. It is not an investment to put money into and then leave unobserved. Lots of money can be gained or lost in minutes, hours and days and a good investment banker supervising this investment is required.

Large investment houses like Goldman-Sachs have tremendous influence over our economy. When going into an investment banking career, you will be entering into the heart of the nation and the world’s economic infrastructure. Doing so would be exciting to many people.

On the other hand many people start their careers and remain in smaller investment banks called boutiques. The compensation and bonus structure here is not as extensive as the larger banks; though you will be compensated very handsomely.

As the most innovative financial services provider in the financial industry, investment banks also have long sought to incorporate private equity and hedge fund into their traditional investment banking activities, along the way having created Special Purpose Acquisition Entities and Blank Check Corporations. Their efforts may have to come to a halt in today’s political environment. But after all, investment banking is all about moving capital around for business uses to create the most effective flow of capital between investors and corporations.

Investment banking is one of the most intricate businesses ever created. While no one article can cover all complex issues at once, the following two areas are the most basic to better understanding investment banking.

The Skills for Investment Banking

Core investment banking skills are industry/business knowledge and financial engineering expertise. To become a full-fledged investment banker, one must have both a strong business passion and the ability of financial maneuvering. Investment banking services serve as the conduit for investment-capital flow from investors to businesses. In providing the services, bankers must be able not only to talk to both the corporation and the investor on their respective terms, but also help the two parties understand each other’s different concepts. To investment banking, business and finance are a perfect twist. A typical investment banking division is often comprised of an industry/business coverage group and a financial-product coverage group. It takes interactions of the two groups and combining each other’s work to complete a perfect sale pitch to both a corporate client and the investing public.

The Business of Sell Side and Buy Side

When an investment bank represents a corporate client advising on raising capital, it’s said that the bank is working on the sell side on behalf of the corporation to sell securities to potential investors that the bank may or may not represent. When an investment bank takes in an investor as a client advising him or her on investing, it’s said that the bank is working on the buy side on behalf of the investor to buy securities from all potential sources that may or may not include the bank’s own offerings.

Some smaller investment banks opt for sell-side business working with corporations only and do not conduct brokerage activities on the buy side that deal with the investing public. Big investment banks, however, have business on both sides and that’s where the so-called conflict of interest may arise. Sometimes a bank may find itself representing both the corporation and the investor in the same deal. And if the bank manipulates the buy-side business of investor’s investing by issuing favorable investment ratings for the benefit of gaining the sell-side business with the corporation, that’s the classic instance of conflict of interest. Other times an investment bank may reserve hot IPO deals for its preferred brokerage clients and that shouldn’t be viewed as conflict of interest.

Many other investment banking questions can be easily answered, once the nature of investment banking is well understood, that is, serving both the business community and the investing public. Still, a company is sometimes called investment bank but broker/dealer other times just for the fun of using the two terms interchangeably.

Investment bankers cater to governments, companies and individuals. They assist in the issuance of securities by both government and corporations. These securities can be in the form of bonds, notes and bills for government entities and commercial paper for corporations. Commercial paper consists of short-term loans for companies and the amount of interest earned depends upon how secure the company is in its finances and prospects for future growth.

Individuals use investment banking services in purchasing the government bonds, whether issued by federal, state, local or other authorities such as quasi-government entities. The people investing want to have their money grow for retirement or as a way of earning a living. The investment banking houses are providing advice to investors along with trading and managing the instruments held by the investors.

An integral component in studying for investment banking careers is educating the student in how to discern between a good investment and one that is of a lesser quality. Many investment banking houses rate the investments with specific designations that will allow the investor to gauge the risk involved.

Investment banking careers can entail working for the giants of Wall Street such as Goldman-Sachs and JP Morgan or smaller businesses, commonly called boutiques with lesser known names. Many times investment banking careers consist of transferring from the larger firms to the smaller firms. Many employees who have gained experience at larger firms leave to start their own boutique firms or become officers in the smaller firms.

The investment banking houses often trade with their own funds. This is now becoming a national issue with the proposed tax on this type of trade. The issue is whether these private trades affect the service offered to clients who have put their money into these investment banks for profit, and whether the banks are sufficiently concerned about their clients’ investments.

Within an investment banking firm are various departments. There is the trading floor. Another section is devoted to getting new business via sales. There are also the departments that work on issuing securities for both companies and government. There is a nice commission involved in this matter. Investment banking covers many interesting areas of banking. It is certainly unlike what the average person comes across when entering their local bank for a deposit, withdrawal or request for a loan.

Those who have decided on a career in investment banking will be knowledgeable about many vehicles of investment. This would cover government securities, like bonds, notes and bills. Whether purchased or sold by large institutional investors which are companies or individuals, both large and small investors, this is a large portion of investment banking. Like with all other transactions a commission is earned.

A career in investment banking can involve foreign as well as domestic securities which consist of government paper and government notes. Corporate debt in the guise of corporate paper will also be handled by investment banking professionals. The world is one when it comes to finance. The compensation whether at large firms such as Goldman-Sachs or smaller boutique investment houses will be substantial.

Investment banking is also involved in the trading of one currency against another. This is what many investment banking concerns are doing now. They are speculating on the rise of one currency against the fall in value of others. These are complex transactions because the loss or gain of a few cents must be acted upon quickly. If not a fortune can be lost in a day and the investment house would not appreciate that.

Some investment banking businesses will make some purchases and sales in the commodity sphere of investing. This involves, gold, silver and agricultural products. Buying and selling energy futures, oil and gas contracts, might also be an investment banking move by some investment entities.

Those who want to take advantage of a career in investment banking will find a profitable, fast paced and exciting future ahead of them. They should not be discouraged by the negative news coming out of Wall Street. Like in every profession there are good and bad people and the same goes for the institutions. If the individual becomes an expert and earns huge profits for his or her company, job opportunities in other firms with higher compensation will always be available. Some people have used their earnings in starting their own investment banking companies.