Investment Banking Jobs and Careers
Investment banking encompasses specialist financial services to private, industrial and commercial clients, as well as the government.
The large international banks are well known as investment bankers, but there are also large UK-based clearing banks, and small to mid-sized investment banks, known as 'boutique' and 'mid-cap' respectively.
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Investment banking can involve:
- Investment management.
- Corporate finance for mergers and acquisitions.
- Stock Exchange quotations for new stock issues.
- Loan arrangements for businesses and government.
- Finance for major international projects.
- Foreign exchange on a large scale.
- Loan negotiation.
- Advice and consultation.
Offices in an Investment Bank
Larger investment banks have three offices: front, middle and back. Each has different responsibilities.
The front office houses the bank's primary functions and where most visible activities take place. This includes mergers and acquisitions, investment management, financial advice, trading and private equity funds. The front office also houses a research department that serves clients.
The middle office is home to all non-investment finance-focused activities, such as risk management, which assess the risk associated with activities in the front office. The finance department is also housed here - this is similar to an accounting department in other organisations - and also the compliance office, which ensures legal adherence of all front office activities.
The back office has two divisions: the operations department, which administrates transactions, and the information technology department.
Career Areas in Investment Banking
A stockbroker looks after the investment portfolios for institutional, corporate and private clients. Their role is to buy and sell shares on the stock exchange in order to maximise financial returns, working in a team with investment analysts. As well as shares, stockbrokers may deal in securities, financial products and currency itself. Most trading takes place over the phone or on the Internet.
This work can be extremely well paid, but with its high level of excitement comes pressure. Consequently you're best suited to it if you can stay calm in stressful situations, working analytically with good attention to detail. Economics, business and law are the most desirable qualifications, although you can enter with any degree subject.
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Investment analysts work closely with the stock broking team and fund manager in particular to research information about companies, so that probable rise and fall of stock can be predicted. They analyse information, meet company representatives to learn more about the company's finances, and evaluate this information in the climate of economic, business and political developments. They produce reports presenting their assessments.
This is another high-paying position that rewards skilled researchers, capable of thoroughly understanding economic situations. The disadvantages are working under pressure to meet deadlines, a process that necessitates long hours, often at short notice. The sheer scope of the research means that MBA graduates are well-positioned for this work, with economics, business and mathematics graduates also at an advantage. Any subject degree is acceptable with proven experience.
Financial analysts conduct research into banks and insurance companies on an international level. Research projects are produced through the monitoring of other financial and economic assessments, such as analysts writing in the financial press, attendance at City of London seminars and events, meetings with representatives of financial institutions, visits to the City business library, etc. Reports are produced for the fund management teams.
Financial analysts earn an excellent salary for being proficient in their role. They need to have a deep understanding of finances, plus the ability to interpret signs and create recommendations from them. An MBA or degree in finance or economics is advantageous, although good degrees in other subjects are acceptable.
Operational Investment Banker
Operational or Back Office investment bankers support stockbrokers by undertaking all the associated administration to facilitate the transfer of products, services and funds. This must be achieved efficiently and without risk, so as to maximise profitability of the transaction. The operational banker will liaise with traders and clients to expedite cleared, settled and reconciled funds with smooth business systems and accurate reporting, and reconcile systems.
Investment banks cannot run without good trading software, pricing software and back office software. The IT department therefore plays a critical role in the organisation, by creating and managing the proprietary software of the bank, as well as managing the standard IT services of a bank. Systems architects with advanced skills and the ability to work quickly and reliably under considerable pressure can earn extremely high salaries in this environment.
Will a Job in Investment Banking Suit You?
As already mentioned, good degrees (minimum 2.1) are advantageous, particularly in economics, maths or business, with strong MBAs at a premium. Additionally, confidence and strong interpersonal skills, including written and verbal communication, are vital for jobs in investment banking. Many employers are also concerned about how you will fit into their organisation.
Investment positions require the following strengths:
- High motivation, with proactive and results-orientated approach.
- Communication and negotiation, with the ability to persuade others to accept a position.
- Critical and analytical thinking, with the ability to draw recommendations from research analysis.
- Ability to follow protocols and adhere to legal regulations, due to the high level of regulation in the financial sector.
If you are highly competitive, there is more chance that you will gain one of the limited openings, as these are fiercely contested. A number of employers have an annual presence at careers fairs at universities with strong business reputations, while others offer internships and placements. Some graduate schemes are available. People who gain these places are obviously far better placed for forthcoming vacancies.
Job Sites for Investment Banking Jobs
Nearly all the major banking institutions in the UK have website offering further information on career opportunities. A simple search will bring those sites up high in the results.
- Banking Jobs UK - www.bankingjobsuk.co.uk
- Investment Banking Jobs can be found at - www.bankingjobsuk.co.uk/jobs/investment-banking
- Financial Services Skills Council offers a careers' website, job profiles and advice on job-hunting - www.financialskillspartnership.org.uk
- The Investment Association is the trade body for the UK's investment management industry - www.theinvestmentassociation.org
- The London Institute of Banking & Finance provides information on training and professional development - www.libf.ac.uk
- Investment banking careers talk and discussions can be read at - www.bankingforums.co.uk