Investment Banking: What You Need to Learn As a Beginner


Investment Banking: What You Need to Learn As a Beginner

Working in investment banking can be a very demanding but lucrative profession. The journey to becoming a top investment banker begins as a junior spending all day looking at pitch books and spreadsheets, but with a lot of hard work and dedication, you can evolve into a highly-skilled money maker. Investment banking is not for everyone, but if you have the right qualities and personality, it can be a fantastic career.

To help all the new investment bankers excel in their chosen career, here is what you need to learn as a beginner.

1. You Need to Be Tough and Self-Confident

Investment banking is a dog eat dog world and even when you make it to the top, the pressure doesn’t go away. For new investment bankers, it will often seem like you are being hit from every side by people making unfair demands on you. Clients will make unreasonable requests, your superiors will set impossible targets, and you will need to keep everyone happy in order to make it. Job security is very uncertain for new investment bankers and the dropout rate is very high due to the demands of the job. Developing a thick skin as a new investment banker will provide you with the toughness you need to succeed long-term. Those who are able to weather the storm and climb the investment banking ladder are able to shrug off criticism and stay calm even in the toughest times. Believing in yourself and accepting that clients and superiors may take their frustrations out on you is key for getting through the early years of the job.

2. Investment Banking is all About Sales

In essence, the majority of investment banks all prove the exact same services to potential clients. Because of this, the banks which get the most business are the ones who are able to woo clients the most effectively. Your success as a new investment banker will have as much to do with how good a salesperson you are as which degree you have or how good your instincts are for investments. If you are unable to build strong relationships with your clients, or you shrink under the pressure of securing business for your bank, then investment banking is probably not for you. Like all salespeople, how you look can have a massive impact in whether you make it. Being impeccably dressed and well groomed will show clients that you are successful and that you are the right person for them to do business with.

3. Building Relationships with Clients is Key

In order to keep important clients happy, a major part of investment banking is spending time socializing with them. If you are planning on becoming an investment banker, you will need to accept that a lot of your free time will be spent wining and dining your clients. The most successful investment bankers give up their weekends to play golf with clients, take them out to dinner, and even spend time with their families. As so much of your time will be spent with your clients, you need to be able to enjoy it. With the bank picking up the entertainment tab, you at least need to have fun while building relationships or it will become easy to dislike your job.

4. You Need to Take Risks to Succeed

Every investment banking career will have its unexpected twists and turns and it is very unlikely that your route to the top will turn out like you planned. You may have to change banks, move cities, and possibly relocate to another country in order to progress in your career. The investment bankers which make it to the top seize the best opportunities with both hands because they may never come up again. One former Goldman Sachs executive explains that in order to get the promotion you need, you may need to move to Japan or London or somewhere else. Try to look at everything as an adventure rather than something you have to do and never be afraid to take risks. The connections you can make by broadening your horizons and doing something slightly out of the box could end up being invaluable later on.

5. Not Burning Out is Essential for Long-Term Success

If you are expecting to do a traditional nine to five, then investment banking is definitely not the career for you. The working hours are very long with evenings and weekends often spent with clients or doing overtime. In order to become a successful investment banker, you will need to use any downtime which you may have to recharge your batteries or you can seriously risk burning out. It doesn’t matter if you play golf, meditate, or do Ironman triathlons, find what works for you and it can really help to make those red-eye business flights and eighteen hour days more manageable. One study found that the average lifespan for the career of an investment banking managing director is only around eighteen months. The pressure of having to hit the huge sales targets set by the bank just becomes too much and they end up quitting.

6. Investment Banking is No Place for the Faint-Hearted

Successful investment bankers are ruthless, and the reality is that in order for you to succeed, you need to rise above your competition. Many people just aren’t cut out for the pressures of investment banking and if you want to make the grade then you cannot let yourself feel sorry for those people who don’t make it. Focus on your own goals, build connections where possible, but never lose sight of the fact that there is not room at the top for everybody.

If you can handle the pressure and the long hours involved, then there is some serious money to be made in investment banking. When you first start out, it can be a very difficult profession, but the benefits really can make up for the tough times. If you are new to the job, keep these tips in mind and they will help you to become a success and to climb the career ladder.