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A Day in the Life of a Investment Banker

Investment bankers advise their clients on high level issues of financial organization. They manage the issuance of bonds, recommend and execute strategies for taking over and merging with other companies, and handle selling a company’s stock to the public. The work thus involves lots of financial analysis, and a strong background in finance and economics is a necessity. Personal and strategic skills are vital to investment bankers as well, for they serve as strategists for their clients, helping them develop their financial plans as well as implement them. At the profession’s highest level, investment bankers serve as crucial figures in the shaping of the American and world economies, managing mergers of multibillion-dollar corporations and handling the privatization of government assets around the world. All this is time consuming, and investment bankers work long hours. Work weeks of 70 hours or more are common, and all night sessions before deals close are the rule rather than the exception. Still, the work is extremely interesting, and those who stay in the profession report high levels of job satisfaction. Investment bankers spend large amounts of time traveling, to pitch ideas to prospective and current clients or to examine the facilities of companies being purchased by their clients. In the office, they spend their time developing strategies to pitch to clients, preparing financial analyses and documents, or working with the sales forces of their banks in selling the bonds and stocks which are created by the investment-banking department’s activities.

Paying Your Dues

In general, an M.B.A., requiring two years of post-college study, is required to rise in the field, though entry-level jobs in analyst programs are available to college graduates who want experience in the profession. Analysts perform much of the grunt computer crunching required in preparing financial proposals, though they often travel to sit in on meetings with clients and sessions in which senior bankers pitch ideas to prospective customers. After two years, analysts usually move on, either to business school or to another profession, though a few are offered jobs as associates, the position which investment banks offer to M.B.A. holders. In many banks, this is as far as one can rise without an M.B.A., though there are exceptions, and a few prominent bankers never went to business school.

Present and Future

Investment bankers have been around as long as stocks have been issued and bonds sold, but the current industry owes its form to the demand for expert counsel created by the increasing complexity of financial markets since the 1930s. Until relatively recently, investment banking was a fairly sedate field, but the 1980s saw tremendous growth in the field, as the increasing availability of complex securities and high-yield (“junk”) bonds made mergers and acquisitions a weapon in the arsenal of every major corporation and made investment bankers like Henry Kravis and Robert Rubin extremely visible public figures. Though the stock markets have their ups and downs, companies always require expert advisors to help them sell stocks and bonds and to make strategic financial plans; investment bankers fill this need. Employment in the investment banking industry should remain strong over the foreseeable future.

Quality of Life

PRESENT AND FUTURE

During the first two years after finishing business school and taking a job at a bank, most investment bankers work as junior associates, supervising the financial analysis done by analysts and themselves being closely supervised by more experienced bankers. At this level, associates are learning the business, acquiring the skills they will need when they are called on to develop financial plans rather than execute them. They spend long hours running computer analyses, preparing the financial reports which accompany stock issues, and putting together the documents used by senior bankers to pitch ideas.

FIVE YEARS OUT

At this level, investment bankers have significantly more responsibility and mobility. They have become senior associates or vice presidents, depending on the structure of the firm, and oversee the preparation of documents that leave the firm, and they begin to be involved in the more creative side of the business, working with senior bankers and clients to develop financial strategies. They have established specialties, whether regional or by type of transaction, and have begun to develop the professional reputations and skills which will enable them to attract clients. Hours remain intense, and still involve all-night sessions and 70-plus-hour weeks, but fifth-year bankers begin to have more control over their schedules. They have more control over their careers as well, as the options of going to work in-house for a client or moving to another bank with a specific need for their expertise become increasingly available.

TEN YEARS OUT

By this point, investment bankers are involved in strategic and financial planning, creating the plans executed by junior bankers and spending significant amounts of time developing plans with existing clients and attempting to attract new ones. Those who have not left to start their own firms or to work for clients usually now have ownership interests in their firms, and they begin to participate in firm policy and management. They are responsible, either alone or with other senior bankers, for overseeing a sector of the firm’s investment banking business, and professional success is now largely dependent upon the banker’s ability to develop a client base. Hours remain long, but there is significant control over when work must be done, and pay increases dramatically.