Discover the Role of an Investment Banker

Investment bankers are basically financial advisors that work for large and small firms to raise money for their clients. Their job descriptions often have broad responsibilities and require highly specific skills. Investment bankers are highly valued by their clients, and successful ones are extremely hard working and dedicated to thriving in the face-paced and demanding work environment of investment banking.

What Is Investment Banking?

An investment bank is not the same as a bank where you set up your checking and savings accounts—those are called retail banks. In the simplest terms, investment banks help corporations raise money. When a corporation wants to buy or sell something, they work with an investment banker to figure out how to invest or attain the funds they need to get it done.

What is an Investment Banker?

Investment bankers help their corporate clients secure funds in the capital markets, act as financial advisors, and occasionally help companies navigate mergers and acquisitions. Investment banker positions vary from entry-level to high-level executive.

Investment bankers are highly valued in the corporate world. Without them, it would be very difficult for companies to get the money they need to serve their customers and clients, or develop a solid competitive position in their market.

Is Being an Investment Banker Difficult?

Being an investment banker can be hard because the day-to-day operations are long and stressful. Getting enough sleep and reducing stress can be a challenge for investment bankers, especially at the beginning of their careers. Investment bankers who make it through the adjustment period early in their job will often have long and financially rewarding careers in the industry.

Investment Banker Responsibilities

Investment bankers are ultimately responsible for the success of their clients. In some roles, they take on many responsibilities while others specialize in one or two specific areas. All positions are responsible for raising money for their clients primarily through issuing debt and selling equity in capital markets.

Debt Capital Markets

When a company wants to raise capital by issuing debt in the form of bonds, it often has a hard time finding qualified investors with enough money to invest. Investment bankers will help these companies find qualified investors within their large network and structure how the bonds get issued.

Equity Capital Markets

When a company plans to hold an initial public offering (IPO) to sell stock to the public, investment bankers will help that company find large investors to ensure their IPOs are purchased for the highest price possible.

Mergers and Acquisitions

Investment bankers also help broker mergers and acquisitions. The process often involves them lending their expertise to make sure things go smoothly. Investment bankers will advise their clients by presenting their research with recommendations about the best opportunities.

Investment Banker Skills

Investment bankers need many skills to be successful in the investment banking industry. Learning how to make financial forecasts and develop relationships on both sides of the transaction is key to advancing throughout your career.

Financial Modeling

Investment bankers often develop various types of financial models to value debt and equity for mergers, acquisitions, and capital-raising transactions. The process often involves using Excel or other software programs to make smarter investment decisions in an efficient manner.

Relationship Management

Knowing how to develop and maintain working relationships with clients is an important skill for investment bankers. It’s common for investment bankers to work long hours and be available to their clients as needed when large deals are in process. Ultimately, investment bankers have a responsibility to expand their firm’s book of business and meet the needs of their investors.

Benefits of Becoming a CFA

Investment bankers who pursue earning the CFA designation will gain in-depth, specialized knowledge, skills, and abilities in financial analysis and investment management. Other benefits of earning the CFA include

  • The CFA designation is recognized globally.
  • Some job descriptions for investment positions say “prefer CFA” or “CFA required.”
  • You become a member of a global organization and can optionally join a local CFA Society for networking and further learning opportunities.
  • CFA Institute and local CFA Societies Compensation surveys have found that CFA Charterholders have higher median compensation than non-CFA Charterholders.

Ready to Begin Your CFA Journey?

If you are interested in joining hands with a leading CFA tuition provider to help make your CFA journey easier, then Kaplan Professional Middle East is here to offer you the expertise of having helped students to successfully ace their CFA exams for several years with the industry’s leading trainers, world-class support, CFA’s most trusted study materials – Kaplan Schweser, and digital solutions. If you are looking for CFA training, join us as a student to kickstart your CFA exam preparation.