Why investment banking is the best place to start your career - 2019 Edition
09 March 2019
At the end of the day, so many people want to do investment banking because it is viewed as a career accelerator. Now, what does this mean? Generally, it is taken to either refer to the prestige or signalling effect of having investment banking on your resume, however, it can also mean the development of a range of transferrable skills in an extremely short amount of time. Much of this can be attributed to the long hours associated with the job, but this nonetheless does not detract from the intense growth most people will experience in their first few years on the job.
You’ll learn a lot very quicklyInvestment banking is known for being extremely fast-paced, especially when a deal is about to close. This presents analysts (as well as interns) with the opportunity to quickly learn and build corporate finance skills. From day one, analysts will be given significant responsibility, forcing you to stay up to date with financial trends and markets. Beyond this, investment banking also gives analysts the opportunity to develop soft skills such as communication, time management, and the ability to handle critical feedback.
Your earning potential will be among the highest of any recent graduateChances are, you’ve heard of the first year salaries and bonuses investment banking analysts get. You’ll be glad to know that these aren’t exaggerated, and that investment banking offers one of the highest starting salaries of any field. Further, this trend continues as you make your way up the ranks. Just don’t forget that although you will get paid well, the investment bank will also take their pound of flesh from you.
You’ll develop transferrable skills that you can use in any professionYou’ll develop transferrable skills that you can use in any profession In your first few years on the job, most of your time will be spent in powerpoint and excel. Fortunately, through this, you will develop some pretty valuable skills that transfer nicely into adjacent, lucrative professions. While some bankers choose to stay on and make their way up the ladder, many choose to jump ship after 2-3 years to either private equity or business school. Arguably, investment banking is the best career decision you can make out of undergraduate if you want to eventually end up in private equity, given the transactional nature of both roles and the frequency of interaction between the sell side (investment banks) and buy side (private equity firms). However, the skills your develop aren’t limited to private equity, and exiting into industry or even starting your own business after your investment banking stint is not rare.
You’ll develop a strong professional networkMost people have heard the saying “its not what you know, its who you know”, and unfortunately there is some truth to this statement. Fortunately, working in investment banking gives you the chance the build an extremely strong professional network. First, working such long hours with your peers inevitability leads to deep relationships, with many investment bankers listing ‘camaraderie” in the office as the most enjoyable part of the job. Further, investment bankers usually engage with firms/clients at a high level, meaning interaction with high ranking executives. While your exposure to these executives may be limited in your first few years on the job, chances will still present themselves.
You’ll develop a strong professional networkMost people have heard the saying “its not what you know, its who you know”, and unfortunately there is some truth to this statement. Fortunately, working in investment banking gives you the chance the build an extremely strong professional network. First, working such long hours with your peers inevitability leads to deep relationships, with many investment bankers listing ‘camaraderie” in the office as the most enjoyable part of the job. Further, investment bankers usually engage with firms/clients at a high level, meaning interaction with high ranking executives. While your exposure to these executives may be limited in your first few years on the job, chances will still present themselves.
You develop unbeatable staminaMost people would consider the crazy hours and the resulting sleepless nights and destruction of social life as negatives. But there is an upside, after working 100+ hour weeks for months on end, you’ll end up developing an uncanny stamina. I mean it basically means that any role you take on afterwards will be a walk in the park in comparison. Once you’ve learnt what your body is actually capable of, then anything short of a trip to the hospital will seem easy. Whether this is healthy is an entirely separate question. To be completely fair, there are other jobs that work similar hours e.g. medical residents
Time ManagementOnce upon a time, an associate said to me “your time becomes a lot more valuable when you have none of it”. I think this statement captures the first few years of an investment bankers life perfectly. The only way you will have any free time as a banker is if you squeeze out every last drop from every spare moment you have. Fortunately, this scarcity of time will force you to develop some pretty legendary time management skills.pportunity.
Sense of UrgencyThis is something you will only appreciate once you leave investment banking. Once you leave, you realise that taking more than 5-15 minutes to respond to an email is generally quite acceptable and isn’t considered being unresponsive. Make of this what you will.
Attention to Detail:Spending all those late nights with powerpoint will leave you with some superhuman formatting and colour identification skills. I mean there’s really no other way to describe the ability to notice when a logo is 1 pixel too far to the right… right? Jokes aside, this is an extremely valuable skill that is often tossed around as a buzzword, but after a few years (or even a few months) as an investment banker this skill will form part of you.
If these skills sound valuable to you then don’t delay your interview preparation. Competition is getting more intense every year, don’t lose out from lack of practice. Hone your investment banking interview skills with us.