Investment banking is one of Wall Street's most coveted roles. It is also one of the hardest. It is no surprise that the average day in an investment banker's life is long and stressful. Those who manage to survive the adjustment period often go on to have long and financially rewarding careers.
According to Andrew Gutmann, a 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 workday during the week might be 10:00 a.m. until 2:00 a.m."
The Role of an Investment Banker
Investment banks help companies and governments raise capital by issuing stock or borrowing money. They also act as advisers and go-betweens on mergers and acquisitions.
The capital markets are a fast-paced, high-stakes, and highly regulated environment. Companies in other industries need investment bankers to handle financial deals while they are otherwise occupied.
Who Needs Them
Investment bankers are hired by young companies planning to go public, big companies planning mergers and acquisitions, and established companies that want to raise money for major expansions. The professional bankers are the link between the company and investors.
For example, in 2019, Goldman Sachs handled the purchase of Tableau Software by Salesforce, the sale of Ultimate Software to a private equity consortium, and the sale of Symantec's enterprise business to Broadcom.
Social Skills Wanted
These firms also have trading and sales divisions, but the traditional role of an investment banker involves meeting with clients, preparing offers, running financial projections, and working on pitchbooks, the sales books created to draw in new clients.
What separates investment bankers from most others in the financial industry is the requirement for excellent social skills. Plenty of business students can perform the technical functions of an investment banking associate, but few have the stamina and the social graces to deal effectively with clients. Having the right personality goes a long way.
- Investment bankers meet with clients, prepare offers, run financial projections, and work on pitchbooks, that help generate new clients.
- The work is lucrative but the days are long and stressful.
- Superior social skills are required for success in the field.
- So is stamina.
A new associate who gets past the initial chaos and jitters of the job settles into a functional routine. The mornings are usually filled with emails, text messages, and office meetings.
The messages can be a nightmare, quite literally. 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 one of them within 15 minutes. The messages may come from clients, co-workers, or senior bankers who want every status report, presentation, and calculation double- and triple-checked.
A Late Start
Fortunately, the workdays start rather late. 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 the night before.
An associate may have 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 cities, many face a long commute.
Morning work is often 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 by senior staff, who have spent the previous evening reviewing the day's work. On slow days, a junior banker may have time to catch up on the news and sports, but there is not much opportunity for social media since most investment banks put up firewalls to block distracting websites.
Unless the day is very busy, lunch is a leisurely 45-minute or hour-long stretch at a local deli or the company cafeteria. These are usually spent with co-workers on the same level. The hierarchy tends to be rigid.
The associates usually return to their desks to find updated models and presentations from their team's analysts. The associates review these documents and make corrections or recommendations before sending them back to the analysts.
This is 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 don't have a ton of time for revisions.
The Live Deal
Afternoon work is focused intently 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 details. Initial public offerings (IPOs) and merger and acquisition (M&A) deals involve millions or even billions of dollars, and the firm cannot afford to make mistakes.
$125,000 to $10 million
The range of salaries (not including bonuses) an investment banker earns, according to the Corporate Finance Institute. The low end is for a first-year analyst. The high end is for a managing director.
The second half of the workday is divided into two segments: before and after dinner. Dinner is almost always eaten at the office.
The work before dinner is more scheduled and predictable, and analysts demand that the work of associates be completed by 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 require massive revisions to the pitchbook.
Investment banking associates and analysts work with many other professionals such as equity research and sales staff.
The Software Crew
The evenings, however, are closely spent with the desktop publishing crews. Desktop publishing (DTP) in investment banking is a division filled with professionals who know how to use PowerPoint, Photoshop, and other software to communicate dense financial information effectively. 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 and work quickly to ensure edits are done correctly and on time.
Many banks have company car services set up to take associates and analysts home in the early hours of the morning. Senior bankers may get away by 10 p.m., but junior bankers normally slump home in the early hours of the morning to get a few hours of sleep before doing it all again the next day.