Investment banking is one of Wall Street's most illustrious and coveted professions. It is also one of the hardest, at least in terms of hours on the job and reported stress. It is no surprise the average day in the life of an investment banker is long and stressful. However, those who manage to survive the adjustment period often go on to have long and financially rewarding careers.
According to Andrew Gutmann, former investment banker and author of "How to Be an Investment Banker: Recruiting, Interviewing, and Landing the Job," the typical investment banking associate or analyst "can routinely expect to work 90-100 hours per week or even more. A typical work day during the week might be 10:00 a.m. until 2:00 a.m."
Goldman Sachs, JPMorgan Chase, Barclays, Bank of America and Morgan Stanley are among the biggest investment banks in the world.
Role of an Investment Banker
The general public is full of misconceptions about investment banks, which help companies or governments raise capital through debt and equity financing. The capital markets are a fast-paced, high-stakes and highly regulated environment, so it really pays to have professional bankers navigate the process. For example, investment banks helped Facebook go public in 2012 and assisted Comcast Corporation when it bought NBCUniversal Media from General Electric in 2013.
It is true there are trading and sales divisions at places such as Morgan Stanley and Goldman Sachs, but the traditional role of an investment banker involves meeting with clients, preparing offers, running financial projections and working on pitchbooks, or sales books created by the firm to help generate new clients.
What separates investment bankers from accountants and financial analysts is the pressing need for excellent social skills. Plenty of business students can perform the technical functions of an investment banking associate, but few have the stamina and social graces to grease the wheels with senior staff and clients. Associates, especially in the first year, are very replaceable cogs in a machine; having the right personality and attitude goes a long way.
- Investment banks help companies or governments raise capital through debt and equity financing.
- The bankers meet with clients, prepare offers, run financial projections, and work on pitchbooks, (sales books) that help generate new clients.
- Junior-level bankers often work 16 hours per day, on a 90-100 hour work week. Higher-level bankers can sometimes put in a shorter, 12-hour day.
- For associates, the morning consists of responding to numerous, ongoing administrative emails, office meetings, and company analyses.
- The afternoon sees updated financial models from team analysts revised. Evening brings more revisions, including pitchbooks and other materials.
Once a new associate moves past the chaos and jitters of the job, which can take months (according to some), he settles into a functional routine. The mornings are the most consistent and are often full of administrative emails and office meetings.
In fact, "full of emails" might not do the average investment banker's morning justice. Responding to lots and lots of messages is the most consistent part of an investment banker's day. There are stories of analysts at JPMorgan waking up in a panic during the night to check their phones because they run the risk of being fired if they do not respond to every message within 15 minutes. These messages may come from clients but are most likely from co-workers and senior bankers who need every status report, presentation and calculation double- and triple-checked.
Fortunately, most work days start rather late for bankers. This is partly because the New York capital markets are not open at 7 a.m., but it is also because most bankers were at the office until midnight or later.
An associate has time to shower, eat breakfast and even work out before heading to the office. Since the vast majority of investment banking jobs are located in crowded metropolitan cities, bankers need to leave sufficient time for transportation.
Morning work is often much slower and more methodical than evening work. From about 9:30 a.m. until lunch, associates and analysts work on company analyses and make adjustments requested from senior staff, who normally spent the prior evening/morning reading over the previous day's work. On slow days, the junior bankers may have time to catch up on the news or sports, but there is not much opportunity for social media since most investment banks put up firewalls for distracting websites.
Unless the day is very busy, lunch includes a leisurely 45-minute or hour-long stretch at a local deli or the building's cafeteria. Breaks normally fall somewhere between 12:30 p.m.-2 p.m., and are almost always spent with co-workers on the same "level." For example, analysts normally eat without inviting associates or vice-presidents.
By the time associates come back to their desks, there should be updated models and presentations from their team's analysts. It is time for the associates to review these documents and make corrections or recommendations before sending them back to the analysts. This can be a stressful process for associates, who desperately want to prove they can contribute to the deal, and analysts, who know what the managing directors or directors need and do not have a ton of time to go through unnecessary changes.
Afternoon work focuses intensely on the active deal. Many investment banking teams are assigned one deal at a time, or the "live deal," and senior bankers are meticulous about dotting and crossing all the appropriate letters. Initial public offerings (IPOs) and merger and acquisition (M&A) deals involve moving millions or even billions of dollars, so the firm cannot afford to have little mistakes compromising anything.
$125,000 to $10 million
The range of salaries (plus bonuses) an investment banker in the U.S. typically earns, according to the Corporate Finance Institute. A first-year analyst might earn $125,000 while a high-level managing director could earn $10 million.
The second half of the workday is divided into two segments: before and after dinner. Dinner is almost always eaten at the office around 7 p.m.-8 p.m. The work before dinner is more scheduled and predictable, and analysts demand work from their associates be completed by the early evening so it can be reviewed again.
On a normal day, the first post-dinner task is reviewing the morning's work. Analysts and senior bankers spent the past several hours going over material and creating "comments," which sometimes include massive revisions to the pitchbook.
Investment banking associates and analysts work with lots of other professionals, such as equity research or sales staff. The evenings, however, are closely spent with the desktop publishing crews. Desktop publishing (DTP) is a division filled with experts in software, PowerPoint, Photoshop, and other aesthetic programs. Analysts rely heavily on this team to make revisions to pitchbooks and other marketing materials.
The revision-comment-correction cycle might repeat two or three more times before the night ends. Associates and analysts have to think quickly and work even more quickly to ensure edits are done correctly and on time. Stamina is key; mistakes are not tolerated by senior staff, and 1 a.m. is prime time for mistakes when running complex financial models or reviewing 100 pages of marked-up pitches.
A lot of banks have company car services set up to take associates and analysts home in the early hours of the morning. Senior bankers can often get away with going home at 10 p.m., but junior bankers normally slump home around 1 a.m-3 a.m. and quickly fall asleep, ready to do it all again the next day.