Is investment banker/brokers/Services a good career path? Its compensation is high enough to keep you satisfied but you will have to deal with long hours that are the norm in this sector.
The investment industry is one of the most profitable industries in the world. Investment banking makes a huge part of this industry and this part had annual revenue of $133 billion across the world in 2019.
Executives who work in this industry claim higher annual salaries than those working in many other sectors. Apart from salaries and income, we want to know the outlook of employment conditions within this sector. Is investment bankers/brokers/service a good career path?
Before you decide on becoming an investment broker, you should ensure that you know the answer to this question. You wouldn’t want to end up in a career you don’t like. Neither would it be of any good if this career didn’t give you the lifestyle you wanted.
Salary is one major factor you should consider when selecting your career. But don’t forget or ignore other factors. For example, you should consider the working hours required to succeed and excel in your career. Look at the schedule and type of impact you would create with your services.
After you have considered all these factors and you have decided on taking up this path, understand what it takes to achieve your goal.
This post will tell you all about a career in investment advisory.
What Is The Job Description Of An Investment Banker/Broker?
Before we explain these services and professions note that the investment industry involves numerous roles and tasks. Some professionals within the industry are responsible to help corporations raise funds for their projects.
Others are interested in selling securities and stocks to individuals looking to build their investment portfolios. Others work on negotiations between corporations, banks, and smaller investors.
Investment bankers are executives that work with businesses. They help these corporations with their financing needs. Whenever these entities need more capital to fund their upcoming projects, these bankers suggest the right method of funding to keep funding costs down.
These bankers are also often involved with underwriting and advisory services. More specialized investment bankers may also help businesses with their growth through mergers and acquisitions.
For such financial and business transactions, these bankers analyze the operations and finances of target entities to help the acquirer in giving the right bid.
On the other hand, investment brokers are those executives that work between investment holders. They are not involved in creating these investment opportunities in the first place.
Instead, they facilitate the market by connecting the potential buyers of different investment certificates with relevant sellers.
They also often help buyers with their investment decisions.
Plus, many other investment services are offered within this industry. One of these services is financial analysis.
Financial analysts analyze the operations of businesses that back different stocks and bonds. This analysis allows the investors to choose between different options.
How to Become An Investment Banker
Investment bankers are highly educated executives with a keen research interest. They use numerous investment tools to assess business KPIs to reach investment and financing decisions. Consequently, they must have relevant academic qualifications to get these tools.
These professionals must have a bachelor’s or master’s degree in finance and banking. Other routes to becoming one of these executives include getting a relevant certificate.
Two of the most respected certificates within this industry are Financial Industry Regulatory Authority (FINRA) and Certified Financial Analyst (CFA).
Although qualification is a must to enter this profession, it can’t guarantee success. Success in investment banking depends heavily on a banker’s research skills.
The executive should have deep knowledge of different subjects including finance, economics, marketing, and statistics. They should understand the operations of financial markets involving jargon and presentations. Also, they should understand that transactions are typically carried out within this market.
They should be able to use economic rules and laws to understand historical trends and forecast future ones. Also, they should be well-versed in the marketing area so they can understand their customers and respond to their needs. Also, note that the chances of success within this industry rise with experience.
Read More: 15 Best Paying Jobs in Marine Transportation
Benefits of Investment Banking Career Path
The annual income of investment bankers is comparable to that of chief executives, pilots, and lawyers. Although you have to invest some time in building your position within the industry and knowledge, once you have taken this time, your career becomes an asset to you.
Don’t get distracted by the average annual income figure of these professionals – it stands at $66,000 – because it doesn’t paint an accurate picture.
The career is demanding and competitive and you can rise above the crowd with persistence, hard work, and intelligence. As you move up your career ladder, the entry-level pay will turn into attractive earnings for you.
The knowledge and insight you gain as an investment banker or broker are immensely profitable. You will find the best-paying jobs in basic industries or the capital goods sector.
But the knowledge you gain from working in the financial and investment industry can pay you in spades. You can earn by basing your personal finance decisions on the knowledge you get from this sector.
Depending on how much and how long you invest, you can turn your qualification and experience into a multi-million dollar retirement fund.
Monetary benefits offered in this industry surpass those offered in others. So, you should be expecting bonuses, shares in investment profits, and some portion of the financial instruments you are underwriting.
Don’t forget that the industry is also famous for its lucrative non-monetary benefits for the involved professionals. So, you could be taking networking tours or attending similar events. You will have plenty of opportunities to network.
Other work-related perks include spacious offices, vacations, and premium insurance coverage.
Continuous Career Growth
Growth is the spirit of the investment banking/brokerage career path. If you are working as a banker in this field, it will be expected of you to keep learning new tools for financial analysis as well as negotiation with relevant parties.
This environment of continuous growth will be fostered by the competitive environment that is prevalent within this industry. Note that this growth in knowledge and experience doesn’t arrive alone. Instead, you will be rewarded with a higher salary and bonuses with it.
But over exaggerated perks and skyrocketing salaries is not the only facet of investment brokerage and banking career path. You also have to deal with some limitations and needs of this industry to survive and succeed in it.
Requirements of Investment Banker Career Path
Investment bankers must fulfill these requirements to remain in the game.
Intensive Background Knowledge
The proverb ‘knowledge is power’ is truest when it comes to investment banking and services. This industry relies on the knowledge and insights of the advisor to complete.
The more knowledgeable and insightful you are, the higher your chances of creating successful deals become. And because the compensation of these roles is tied to the performance, your successful deals will translate into higher income.
Entry-level investment bankers bring this value to the table in the form of their bachelor’s or master’s degrees or relevant certificates.
Experienced bankers offer a mix of background knowledge and experience. Plus, they use their insights into the business world to benefit their decisions.
If you want to become a professional in investment services, you must prioritize learning as a way of life. You can study about and advance your skills as well as develop your knowledge of the market you are working in.
If you are okay with the life-long learning path we call investment banking, you should also consider its impact on your lifestyle.
The career needs you to give the conventional hours at the office. But sometimes, these hours are not enough and you have to stay long hours to complete projects and tasks.
Other than occasional long hours, you will also see that the career demands continuous growth. This demand translates into extra efforts needed by the executives.
You will be frequently learning new tools and attending conferences and workshops focused on advancing your knowledge of financial evaluation, economy, and marketing.
Investment banking and services is a competition-driven industry. You have to keep proving your worth to remain in the business.
Every project is a challenge and paves way for your next career move. These projects and their successes define your value in the eyes of the stakeholders.
It means that you are prompted to provide your best in every project. Because of this demand, you may feel a high pressure to perform on every project. Consequently, burnouts are common among these executives.
One of the key disadvantages quoted by bankers is how repetitive the schedule is. You have to carry out similar tests and collect and manage similar documents for every investment and financing project.
You may see it as a good factor if you love the predictability that accompanies this process. But if you like trying new processes, you may end up getting disinterested in these mundane tasks.
Salary in Investment Services Career Path
One of the prominent reasons quoted by candidates of investment services and banking to join the practice is the higher salary prevalent in this service sector.
As a record, investment bankers at the top level can earn an average salary of $150,000 and upward annually.
Unsurprisingly, this is a lucrative base salary that keeps more candidates motivated. Unfortunately, only up to 25% of all bankers can reach this level.
Others have to keep exerting and giving long hours to the industry for years. Note that only after you have spent ten to fifteen years in your career, you can reach the level we have stated above.
The base salary of entry-level investment bankers/brokers is not very high. It will start from $40,000 annually and rise with experience. After five years of service and if you have shown competence, you can reach $100,000 in annual salary.
Does this mean that the claim of investment bankers’ lucrative salaries is a lie? Of course, not! These bankers and brokers earn high but this earning doesn’t come in the form of base pay. Instead, most of their annual income comes from monetary benefits that accompany their job.
This job is performance-based. So, the rewards aren’t tied to the hours an investment broker puts in. Instead, it depends on the performance they show. Their performance earns them bonuses and profit shares.
Most bankers earn between $ 50,000 and $100,000 in bonuses annually. For some bankers, this figure is equal to their base salary.
High Paying Jobs in Investment Banking/Brokerage/Services Sector
Here are the top-paying jobs you can get within this sector.
Natural Gas Trader
Commodity trading is one of the best-paying jobs in natural gas distribution as well as investment industries. You have to help your clients forecast the prices of commodities and make investment decisions accordingly.
These commodities will be held by the investor as assets. Note that some sellers of natural gas – and other petroleum products – only sell the right to the commodity and don’t transfer the commodity to the investor. Some other contracts will allow transporting these fuels to the investors – usually energy companies.
In addition to having sound knowledge of financial and commodity markets, these traders must also exhibit deep insight into the gas trade.
Natural gas traders earn between $60,000 and $150,000 annually.
Most equity traders work on behalf of individual and corporate clients. They render their services while associated with a financial organization, brokerage, or investment bank. To carry out the trade, these executives have to do extensive background research first.
They buy shares in different companies to either hold them as investment assets or resell them in the near future at, hopefully, a profit. They are also responsible for selling overpriced shares.
Usually, these executives work in a selected sector. Their success depends on how much insight they have into that particular sector.
These traders earn an average salary of $80,000 a year. This role demands intensive knowledge about the business sector and experience.
These counselors work with individuals and businesses and advise them on the best investment options for them.
Their duties include understanding the needs of their clients and considering their risk tolerance. Once these insights are gained, they collect and compare different options for their clients to invest in.
They can choose between numerous options like equity, loans, bonds, and properties. They also collect information about the perfect investment opportunity within these options.
In the end, they are tasked with explaining these options and their strengths to their clients.
This post discussed the career path of investment banking/brokerage/services. If you are attracted to this industry because of the high salary rate, you may be disappointed because these executives have to pay longer hours to compensate for this salary disparity.
Still, if you are persistent enough and are willing to wait a few years, the salary and bonuses from this job can help you build your net worth rapidly.