February 26, 2024

What does an investment banking analyst do?

Investment banking analyst is professionals who provide support to associates and investment bankers in various areas which includes debt offerings, valuation, merger and acquisition, private placement, and strategic advisory work. They spend their days reviewing and analyzing investment banking transactions. They have to develop presentations and provide guidance to investment bankers. Apart from these, they need to perform administrative duties and conduct meetings with clients. The professional needs to be expertise in the area of accounting, financial modeling, project financing, project valuation, and financial statement analysis. The analytic task consists of constructing a financial model for different projects like infrastructure projects. The professional usually work for investment banking companies while others may work for stockbrokers providing advice to portfolio managers. An investment banking analyst may work for various employers like investment banks, investment management companies, stockbrokers, private equity firms, life assurance companies, large charities, and banks.

What are the job duties of an investment banking analyst?

The investment banking analyst is accountable for performing various duties which includes:

  • Performing valuation analysis including discounted cash flow, relative valuation, and asset valuations
  • Preparing a pitch book for client meetings
  • Performing financial models and analyzing companies
  • Assist investment banking associates with the coverage initiatives
  • Monitor industry for the current event, valuations, and financial data
  • Examine company accounts, profit and loss sheets, and cash flow information
  • Documenting financial research summaries
  • Conduct meetings with company managers, stock market traders, stockbrokers, and fund managers
  • Coordinating detailed and up to date information about the economy and financial markets
  • Coordinating with clients for financial analysis
  • Travel for client meetings and industry research

The job needs a high level of responsibility and great promotional opportunities. Most successful employees would be rewarded in an impressive way and the job demands long working hours, sometimes up to 12 hours per day.

How to become an investment banking analyst?

The pathway to a career in investment banking is not an easy task as the job requires the individual to perform multi taking, pay attention to details, and start thinking out of the box. Here are given few steps to become an investment banking analyst.

Step 1: Earn a bachelor degree

To become an investment banker an individual doesn’t need to pursue a stream but the first step remains to complete a bachelor’s degree. The degree must include subjects like maths, accounting, and finance. Some professionals who hold a degree in other subjects still become successful in investment banking. The individual needs to have a strong foundation in maths is important. Candidates may choose the following course to get into an entry-level position.

  • Bachelor of commerce
  • Bachelor of Arts in finance and economics
  • BBA in finance
  • CFA program

With the graduate-level qualification, the candidate may get into entry-level jobs and they must gain some valuable experience. After 2 to 3 years of experience, candidates need to go for a post-graduate level program like MBA finance for career growth.

Step 2: Networking and internship

Entry-level investment bankers start their career with an internship so securing an internship during college can help you to move towards success. Someone needs to be aware of your skill and experience. The best way to make your abilities visible is through networking. Networking is crucial as it opens the door for an entry-level job. You must pursue continuing networking opportunities to get better openings throughout your career. Internships have several benefits as they provide you real-world experience. You need to build practical experience and skills to make you more attractive as an employee. An internship will also provide you an environment to make a connection and build your network.

Step 3: Register with FINRA and get through the applicable security exam

To employ as an investment banking analyst, the prospective candidate needs to register as a representative of your bank with FINRA. Additionally, depending on the type of job you perform, you need to prepare and pass any applicable securities licensing exam to qualify for registration.

Step 4: Earn CFA charter

Investment bankers can pursue a certification program chartered financial analyst program offered by the CFA Institute. Though it is not required it is common for many prospective candidates to start the CFA program soon after they graduate. The CFA charter is globally recognized as the most respected investment management designation you can earn. The program focus on investment valuation, company analysis, and portfolio management. The prospective candidate needs to pass three levels of the exam and the process takes several years because the exams are offered once per year. A major benefit of earning a CFA charter is it can help you to build your network.

Step 5: Capture opportunities with your network

You should have a solid understanding of the financial investment industry and this will benefit you not only to start your career but also to succeed further. Remain up to date about past and present market trends and have acquired more specialized knowledge by reading trade publications. It is very important to remember networking will help you to find a job. Go into every networking relationship as it would help you to build a perfect career.

Type of job roles investment banker

In the field of investment banking, job roles are very structured and hierarchical. Before getting a permanent position in this industry, candidates need to intern in this field. The experience earned remains valuable. Here are given various types of positions an investment banker can take up.

Junior Analyst – The entry-level position requires the candidate to have 1-2 years of experience in the field with graduation. They perform basic duties like creating a presentation and analyzing basic financial data.

Senior Analyst – After 3-4 years of experience, the candidate will be promoted to the position of senior analyst. They must have an MBA degree to get into this position.

Leadership role – With further experience in this field, professionals can reach top management roles in investment banking firms. b you perform,  graduate level program