Wall Street has changed in the aftermath of the Great Recession of 2008 and 2009, and that has changed the role of the investment banking analyst. As any would-be analyst knows, the job is very demanding and the responsibilities are extensive. However, with the right blend of education, work ethic, and network, many find a career in investment banking rewarding both personally and financially.
- Investment banking is a sought-after career path for those looking for a finance job, as such positions often come with sizable compensation.
- The entry-level position in most banks is as an analyst, and these job openings are highly competitive.
- Banks are looking for smart, skilled, and educated candidates that already have a firm grasp of financial modeling and quantitative skills.
- A CFA designation can help you stand out against others in a very competitive hiring environment.
- Investment banking is rarely a 40-hour workweek. Be aware of the demands of the job, especially in entry-level positions, before pursuing a career in the industry.
What Banks are Looking for
Banks, brokerages, and other financial services firms favor job candidates who bring the following "must-have" attributes to the negotiation table:
- Deep insight into changing financial consumer demographics, including millennial investors who will inherit $30-64 trillion from their Baby Boomer parents and overseas investors climbing out of the middle class and into affluent investor status.
- A pitch-perfect grasp of investment risk and securities analysis.
- A clear, concise, and compelling handle on the new banking business model. This model emphasizes caution over aggressive risk-taking.
- Deep experience in statistics, quantitative analysis, and information modeling.
Viable candidates will have a finance or business degree, and maybe an advanced Masters of Business Administration (MBA) degree for plum investment banking analyst posts, though financial services firms do recruit finance and business undergraduates from high-end schools for entry-level analyst positions.
New analysts can expect long workweeks—80 hours isn't out of the norm—and will work closely with firm managing directors to "fill in the blanks" on the investment strategies favored by those directors.
Typical Investment Banking Analyst Duties
Expect to spend most of your hours on the following tasks:
Examining Industry Research
Investment banking analysts are usually slotted in industry-specific categories such as finance, healthcare, manufacturing, or emerging markets. They'll talk to company executives and investors and try to build cases for or against investments in specific firms or industries.
Building Financial Valuation Models
A sharp facility with online spreadsheets and investment models is vital for an investment analyst. Tracking financial trends, isolating business and revenue cycles, and gauging performance in increasingly competitive global markets will all be on the menu for new analysts—and in heavy doses.
Producing Investment Presentation Materials
New investment banking analysts are expected to be good communicators, for both retail and institutional investment banking audiences. Researching, writing, and editing research reports, status reports, PowerPoint presentations, briefing books, and pitching books for new initial public offerings (and often managing their journeys through the editorial and production pipeline) are key tasks for banking analysts.
Sudden and seemingly unreasonable deadlines for delivering these materials are also par for the course in the day-to-day life of an investment banking analyst. You must be able to handle constant pressure, especially in your first few years.
The average salary for an investment banking analyst.
The "Fast Path" to Becoming an Investment Banking Analyst
The candidates who land the best analysts jobs at high-end Wall Street investment banks have a few attributes in common, including:
- A bachelor's degree from a top college or university;
- A heavy undergraduate coursework load in subjects such as accounting, finance, statistics, economics, and business administration;
- An MBA or Master in Finance from a high-end business school;
- A heavy graduate school coursework load in bond valuations, options trading and pricing, tax laws and risk management; and
- Relevant work experience such as a summer internship at a big investment bank.
It probably goes without saying that networking is an extremely important piece of the puzzle. This is doubly so if you did not graduate from an Ivy League or have a family member or close friend working in the industry.
What to Look for in a Job Interview
Investment bank analyst candidates should be prepared to tout their experience, either in their academic studies or in their careers. Be prepared to discuss your analytical and problem-solving skills. Interviewers will also likely ask you to define and elaborate on your interpersonal skills and your work ethic. Those 80-hour weeks may or may not come up, but prepare like they will, and have a good response ready.
Investment banks will give an edge to candidates who can speak multiple languages (Chinese, Spanish, Arabic, French, and German are highly favored), and to candidates who have a firm grasp of technology and social media.
When you do get to the negotiating table, know that the average entry-level annual salary for an analyst is $57,129. Additional compensation such as signing bonuses or yearly performance-based bonuses is usually available, but these payouts vary greatly depending on the employer.
When to Apply
While you can launch your investment banking analyst job search on any date on the calendar, Wall Street firms usually deliver their yearly bonuses in December, after which some analysts may decide to jump ship. Thus, start your search in November, and intensify it in December and January, just as hiring managers are looking to make a move.
If you're a college graduate looking to break in, Wall Street investment banks often provide job fairs, "Super Saturdays" (recruiting events held on Saturdays at the financial institution), and networking socials to break the ice—usually in the spring months.
Many firms will offer summer internships. Paying close attention to the filing dates is vital, as those internships are often the "foot in the door" for new analysts.
What Do You Do as an Investment Analyst?
Investment analysts evaluate financial investment information, presenting it in reports that are used to determine whether to buy, sell, or hold certain securities. They can also work to identify investment opportunities for their company, as well as provide financial research on companies that are merging, being acquired, or going public.
Is It Hard to Be an Investment Analyst?
Investment analysis is not the easiest job in the world but it has a significantly lower barrier to entry than medicine or other demanding professions that require advanced schooling. Many investment analysts graduate with a bachelor's Degree and jump right into either an internship at an investment bank or a full-time position. You are expected to learn on the fly from your superiors at the firm, which suits the attitude of some people more than others. Having the right temperament is key to success in the investment banking industry.
Is a CFA Good for Investment Banking?
Being a chartered financial analyst (CFA) is an excellent way to stand out in the industry. The test is exceptionally difficult with a pass rating of below 50%, which means those who pass and receive the designation are not only those that work hard and are dedicated, but who understand complex concepts in exceptional detail. Both of these attributes are highly desired in the investment banking industry.
The Bottom Line
Latching onto a financial analyst job at an investment bank can be a gateway into a very lucrative career on Wall Street. Expect to work hard and be ready to listen. Do all of the above, and you'll vastly increase your chances of landing that Wall Street analyst dream job. Make friends along the way, as you never know who may be able to help you in the future.