Business Banker Salary
Business Banker Salary – An investment banker’s job description can include a wide variety of duties. Investment bankers help their clients raise money in the capital markets by issuing bonds or selling shares in companies. Other duties include assisting clients with mergers and acquisitions (M&A) and advising on unique investment opportunities such as derivatives.
Young, aggressive and ambitious finance students, attracted by the lure of high salaries and generous benefits, often gravitate towards investment banking. This is one of the few professions where a 22-year-old with nothing more than a bachelor’s degree can make six figures in their first year out of school. In addition, investment banking often serves as a stepping stone to even more lucrative and prestigious careers such as venture capital, private equity and wealth management. Big Wall Street banks know their opinions are well received by hungry finance students, so they recruit heavily at Ivy League universities, plus other prestigious schools like Duke and The University of Chicago.
Business Banker Salary
A common misconception is that anyone with big numbers is fit to become an investment banker. While quantitative acumen is a fantastic trait, it is by no means a one-sided predictor of success in investment banking. The best investment bankers, along with their math whiz, are persuasive, aggressive, responsive, and have an unwavering work ethic.
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Investment bankers earn big paychecks, but it’s far from easy money. The financial crisis of 2008 cast a negative light on investment banks, which in the following years worked tirelessly to change public perception for the better. Some of the adjustments they made were cultural, including making their work environment more family-friendly. At some firms, this has translated into better working hours, more flexibility and more time spent with family, although an investment banker’s work week, especially in the first few years, is still rarely less than 60 to 70 hours. According to an internal survey conducted in 2021, the average number of hours per week worked by a first-year investment banker at Wall Street firm Goldman Sachs is 98 hours.
Investment bankers perform many tasks for their clients. In some firms, each banker wears many hats, while in others, employees are specialized, with different bankers doing different jobs. At the heart of every investment banking job is raising money for clients. This is primarily done in two ways: issuing debt and selling equity in the company.
Issuing debt means selling bonds to investors. When an investor buys a corporate bond, they lend money or capital to the issuing company for a fixed number of years, usually at a fixed interest rate. The issuing company pays interest for the duration of the bond, and then when the bond term ends, the company remits the principal back to the investor.
Typically, one of the biggest challenges for a company that wants to raise capital by issuing bonds is finding qualified investors with a lot of money to invest. This is where the investment banker comes in; investment banks have entire floors filled with aggressive salespeople, each with large lists of potential customers from whom investment deals can be obtained. A company that wants to issue bonds hires an investment bank not only to help structure the bonds, but also to tap into the bank’s vast network of potential investors.
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It works the same way when raising capital by selling equity or shares. Investment bankers serve as the primary point of contact when a company conducts an initial public offering (IPO) to sell stock to the public. Newly public companies are incredibly scrutinized as to how their IPOs turn out. The success or failure of an IPO often sets a company on an irreversible trajectory, for better or for worse. For this reason, companies use the help of investment bankers to line up large investors and position their IPOs in the most favorable positions to succeed.
Investment bankers also help clients in other ways. They help facilitate mergers and acquisitions and lend their expertise to ensure a smooth process. When clients look for investment opportunities outside their area of expertise, investment bankers serve as advisors to help them find the best opportunities.
At first glance, the barriers to entry into a career in investment banking appear to be quite surmountable. The educational requirements are not particularly strict. While an MBA is a popular designation in the field, many investment bankers only have a bachelor’s degree, and some even less. The tests a person must pass, such as the Series 79 and Series 63, to obtain various securities licenses, while not easy, do not have the reputation of extreme difficulty that the bar or CPA exams have.
However, investment banking is a highly competitive field. Because the pay is so high and the job is so prestigious, especially in cities like New York, the number of applicants greatly exceeds the number of vacancies each year. Having the right skills and being able to demonstrate them is paramount to getting your foot in the door. One of the first benefits comes from attending a highly ranked university. An aspiring investment banker can’t go wrong with an Ivy League school, while other elite universities such as Duke and The University of Chicago also generate heavy recruiting activity from major banks.
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A major such as economics or finance provides a good academic foundation, but other skills needed include persuasiveness, tenacity and, perhaps most importantly, a relentless work ethic. Competition in the industry does not stop even after the job offer is extended. The first few years are difficult and serve to weed out many people who don’t belong here. You spend a lot of time on the phone and getting potential investors and pitching investment deals; those with thin skin who cannot speak convincingly or tire easily struggle as investment bankers.
The average base salary for an investment banker is approximately $83,660 per year. However, a first-year banker can add significantly to this amount with bonuses, and the better he does, the more money he makes. In 2020, the top 10% earned nearly $160,000 per year, which is commonly considered a good total income target for an investment banker.
This money is not paid without a lot of hours and a lot of work. Anyone who isn’t capable or comfortable with a work week that often lasts more than 80 hours should probably look elsewhere for a career. Some banks even offer rooms with bunk beds; they’re for investment bankers who find themselves in the office at midnight or later, but realize they still have to be at their desks before the opening bell the next morning. Some investment banks have attempted to improve work-life balance as part of a cultural overhaul they hope can restore the industry’s image in the wake of the 2008 financial crisis. A day when investment banking is a Monday-to-Friday, nine-to-five career , however, is a long way off if it comes at all.
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But young Wall Streeters won’t be interns forever. If you’re considering a career in finance, you may want to know what you could earn along the way.
The records were collected over the last 12 months and reported in British pounds, which we converted at Thursday’s exchange rate of $1.53/GBP.
Most bulge bracket banks in the US have increased analyst salaries from $70,000 to $85,000. However, the salaries reported here reflect the non-blue chip banks included in the sample.
Emolument told us that if you look only at the bulging brackets, the median salary is closer to $83,000.
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You’ll notice that bonuses grow exponentially from analyst to CEO. MD rewards are actually higher than salaries on average.
Bankers can earn many times more than the average: according to new data from the European Banking Authority, a financier based in the United Kingdom received a huge bonus of $20.6 million in 2013.
However, the figures from Emolument make it clear what the bankers earn
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