Investment banking is a unique division of banking operation that serves individuals or companies to raise capital and contribute financial consultancy assistance to them. Generally, Investment Banks also end up helping/advising their clients on how to manage their various financial assets such as Real Estate, Debt Funds, and Equity Funds etc.
They serve as mediators between security issuers and investors and encourage new firms to go public. They either buy all the possible shares at a price determined by their experts and resell them to the public or sell shares on account of the issuer and take a commission on each share. Investment banks also support companies associated with alliances and acquisitions and provide supporting services such as Market Making, Derivatives Trading, Foreign Exchange, Fixed Income Instruments, Commodities, and Equity Securities.
What background is needed to do Investment Banking?
Investment Banking derives from many different backgrounds but the substantial foundation in mathematics is important. To do an Investment Banking you may have a bachelor’s degree in finance, mathematics or accounting or can be from other fields.
Investment Bankers go through an intense training through their organization, freshers basically start as an analyst after training they are introduced to the principles of markets, risk, financial modeling and accounting. They also learn skills like communication, presentation skills and negotiation. Master of Business Administration degrees (MBAs) is the most popular among the investment bankers.
1. Chartered Financial Analyst (CFA) certification
CFA Certification is a popular finance certification. This certification is conferred by the Chartered Financial Analyst Institute to professionals. In order to qualify, one needs to appear for CFA exam that tests an individual on his knowledge and aptitude in finance.
2. Certified Public Accountant (CPA) Certification
Certified Public Accountant certification is an advanced accounting accreditation that is given by the reputed American Institute of Certified Public Accountants to professionals in the accounting and finance industry.
3. Financial Risk Manager (FRM) Certification
FRM certification is among the most generally accepted credentials in the field. It is a remarkably well-formulated course that is also updated regularly to incorporate any new improvements and developments in the area of risk management and quantitative analysis.
4. Financial Modeling Certification
Financial Modeling is other essential and extensively acknowledged finance certifications. It facilitates the financing experts to create compelling models to interpret financial accounts and investment analysis by assessing several circumstances to arrive at ideal business solutions and to assist them in making better decisions. This is achieved by gathering and studying the past records of a company.
How much does an Investment Banker earn?
According to Glassdoor.co.in, the average salary of investment banking analyst in India is INR 902,800 per annum. Investment bankers’ basic salaries are usually supplemented with bonuses from their employer, so one’s earnings in this field can be quite high.
Maximum of the graduates start their careers in investment banking analyst roles after an experience of two to three years, you will be promoted to associate level. The candidates with an MBA get the direct entry to the associate level.
In another three to four years, you might get promoted to vice president (VP), who regularly communicate with clients and may have their own customers.
The subsequent step is the director or executive director and then managing director, although promotion exceeding position of VP is not that easy, an outstanding individual may accomplish this within ten years of graduating.