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How Many Jobs are Available in Investment Banking?

Investment banking is one of the most sought-after and competitive careers in the finance industry. But how many jobs are actually available in this field? And what are the skills and qualifications that you need to land one?

In this article, I will answer these questions and more, using data, facts, and personal anecdotes. I will also share some tips and tricks on how to stand out from the crowd and get hired as an investment banker.

What is Investment Banking?

Investment banking is a branch of banking that deals with raising capital, advising on mergers and acquisitions, underwriting securities, and providing financial services to corporations, governments, and other entities.

Investment bankers are the professionals who work in this field. They act as intermediaries between the issuers and the investors of various financial instruments, such as stocks, bonds, loans, and derivatives.

Investment bankers typically work for large financial institutions, such as banks, hedge funds, private equity firms, or boutique firms. They are divided into different teams or divisions, depending on their functions and expertise. Some of the common divisions are:

Corporate finance: This division is responsible for helping clients raise capital, either through debt or equity financing. They also advise clients on strategic decisions, such as mergers and acquisitions, divestitures, spin-offs, or restructuring.

Sales and trading: This division is responsible for buying and selling securities, such as stocks, bonds, currencies, commodities, and derivatives, on behalf of clients or the firm itself. They also provide market research, analysis, and execution services to clients.

Research: This division is responsible for providing in-depth reports and recommendations on various industries, sectors, companies, and securities. They also provide economic, political, and regulatory insights to clients and internal teams.

Asset management: This division is responsible for managing the assets and portfolios of clients, such as individuals, institutions, or funds. They also provide investment advice, strategy, and performance evaluation to clients.

How Many Jobs are Available in Investment Banking?

According to the U.S. Bureau of Labor Statistics (BLS), there were about 98,300 jobs for financial analysts in 2020, and this number is projected to grow by 5% from 2020 to 2030. Financial analysts are the closest occupation to investment bankers in terms of job duties and skills, although they may work in different industries and sectors.

However, not all financial analysts are investment bankers, and not all investment bankers are financial analysts. Therefore, the actual number of jobs for investment bankers may be higher or lower than the BLS estimate.

One way to get a more accurate estimate is to look at the job postings on various online platforms, such as LinkedIn, Glassdoor, Indeed, or Monster. For example, as of February 12, 2024, there were about 3,200 job openings for investment bankers on LinkedIn, and about 2,700 job openings for investment bankers on Glassdoor.

Of course, these numbers may vary depending on the location, level, and criteria of the search. They may also include duplicate or outdated listings. Therefore, they should be taken with a grain of salt.

Another way to get a more realistic estimate is to look at the hiring trends and statistics of the major investment banks, such as Goldman Sachs, JPMorgan Chase, Morgan Stanley, Bank of America, Citigroup, or Barclays. For example, according to the 2020 annual reports of these banks, they employed a total of about 1,100,000 people worldwide, of which about 10% were in the investment banking division . This means that there were about 110,000 investment bankers working for these six banks alone in 2020.

However, these numbers may not reflect the current or future demand for investment bankers, as they may change due to various factors, such as market conditions, business strategies, regulatory changes, or technological innovations. Therefore, they should also be taken with caution.

What are the Skills and Qualifications for Investment Banking?

Investment banking is a highly demanding and competitive career, and it requires a combination of hard and soft skills, as well as academic and professional qualifications. Some of the common skills and qualifications for investment banking are:

A bachelor's degree in a relevant field: Most investment banks require a minimum of a bachelor's degree in a field related to finance, accounting, economics, business, or mathematics. However, some banks may also accept candidates with degrees in other fields, such as engineering, science, or humanities, as long as they have a strong quantitative and analytical background.

A master's degree or a professional certification: Some investment banks may prefer or require candidates with a master's degree, such as a Master of Business Administration (MBA), a Master of Finance (MFin), or a Master of Science in Finance (MSF). Alternatively, some banks may also value candidates with a professional certification, such as a Chartered Financial Analyst (CFA), a Certified Public Accountant (CPA), or a Financial Risk Manager (FRM).

A high grade point average (GPA) or a high standardized test score: Most investment banks have a high standard for academic performance, and they may use the GPA or the standardized test score, such as the SAT, the GMAT, or the GRE, as a screening tool or a benchmark for candidates. Generally, a GPA of 3.5 or above, or a test score of 700 or above, is considered competitive for investment banking.

Relevant work experience or internships: Most investment banks prefer or require candidates with some work experience or internships in the finance industry, especially in the investment banking field. This can help candidates demonstrate their skills, knowledge, and interest in the field, as well as build their network and reputation. Typically, a work experience or an internship of 6 months or more is considered desirable for investment banking.

Strong analytical and problem-solving skills: Investment bankers need to have strong analytical and problem-solving skills, as they have to deal with complex and challenging financial problems, such as valuing companies, analyzing markets, structuring deals, or modeling scenarios. They also need to have a keen eye for details, accuracy, and quality, as they have to work with large amounts of data and information, and produce high-quality reports and presentations.

Strong communication and interpersonal skills: Investment bankers need to have strong communication and interpersonal skills, as they have to communicate effectively and persuasively with various stakeholders, such as clients, investors, colleagues, managers, or regulators. They also need to have a good sense of teamwork, collaboration, and leadership, as they have to work in diverse and dynamic teams, and manage multiple projects and deadlines.

Strong work ethic and resilience: Investment bankers need to have a strong work ethic and resilience, as they have to work long and irregular hours, often under high pressure and stress. They also need to have a passion and enthusiasm for the field, and a willingness to learn and adapt to the changing environment and demands.

How to Stand Out from the Crowd and Get Hired as an Investment Banker?

Investment banking is a highly competitive and selective career, and it is not easy to get hired as an investment banker. According to some estimates, only about 2% to 5% of the applicants get an offer from a top investment bank . Therefore, it is important to stand out from the crowd and impress the recruiters and the hiring managers.

Here are some tips and tricks on how to do that:

Do your research: Before applying to any investment bank, do your research on the bank, its culture, its values, its products, its clients, its competitors, and its recent news and developments. This can help you tailor your resume, cover letter, and interview answers to the specific bank and position that you are applying for. It can also show your interest and enthusiasm for the bank and the field.

Network and connect: One of the most effective ways to get noticed and get an interview is to network and connect with the people who work in the investment banking field, especially those who work in the bank or the division that you are interested in. You can use various platforms, such as LinkedIn, alumni networks, career fairs, or events, to reach out to them and ask for their advice, referrals, or recommendations. You can also use your network to learn more about the bank, the field, and the interview process, and to prepare yourself accordingly.

Prepare your resume and cover letter: Your resume and cover letter are the first impressions that you make on the recruiters and the hiring managers, and they can make or break your chances of getting an interview. Therefore, you should prepare your resume and cover letter carefully and professionally, and make sure that they highlight your skills, qualifications, and achievements that are relevant and impressive for the investment banking field. You should also avoid any errors, typos, or inconsistencies, and use a clear, concise, and consistent format and style.

Prepare for the interview: The interview is the most crucial and challenging part of the hiring process, and it can determine whether you get an offer or not. Therefore, you should prepare for the interview thoroughly and diligently, and practice your skills, knowledge, and personality for the investment banking field. You should also anticipate the types of questions that you may encounter, and prepare your answers and examples accordingly. Some of the common types of questions are:

Behavioral questions: These questions are designed to assess your fit, motivation, and personality for the investment banking field. They may ask you about your strengths, weaknesses, goals, achievements, failures, challenges, or conflicts, and how you handled them. You should use the STAR (Situation, Task, Action, Result) method to structure your answers, and provide specific and relevant examples from your past experiences.

Technical questions: These questions are designed to test your skills, knowledge, and expertise for the investment banking field. They may ask you about various financial concepts, terms, formulas, models, or methods, and how you apply them to real-world scenarios. You should be familiar with the basic and advanced topics, such as accounting, valuation, financial statements, ratios, capital structure, cash flows, DCF, WACC, CAPM, LBO, M&A, IPO, etc. You should also be able to explain your answers and calculations clearly and logically, and use a pen and paper or a calculator if needed.

Brainteasers: These questions are designed to challenge your mental ability, creativity, and problem-solving skills. They may ask you about puzzles, riddles, logic, math, or trivia, and how you approach and solve them. You should not panic or give up if you encounter these questions, but rather try to think out loud, ask clarifying questions, make reasonable assumptions, and show your thought process and reasoning.

Follow up and thank: After the interview, you should follow up and thank the recruiters and the hiring managers for their time and opportunity. You should also reiterate your interest and enthusiasm for the bank and the position, and highlight your skills and qualifications that make you a suitable candidate. You should send a thank-you email or note within 24 hours of the interview, and keep it brief, polite, and professional.

FAQs

Here are some frequently asked questions about investment banking jobs:

Q: How much do investment bankers make?

A: Investment bankers are among the highest-paid professionals in the finance industry, but their compensation may vary depending on the bank, the division, the level, the location, and the performance. According to Glassdoor, the average base salary for an investment banker in the U.S. was $86,643 in 2020, and the average bonus was $51,951. However, these numbers may not reflect the actual pay range, as some investment bankers may earn much more or much less than the average.

Q: How long are the working hours for investment bankers?

A: Investment bankers are known for working long and irregular hours, often exceeding 80 or 100 hours per week. This is because they have to deal with multiple projects, deadlines, clients, and markets, and they have to be available and responsive at all times. However, the working hours may vary depending on the bank, the division, the season, and the workload. Some investment bankers may have more flexible or balanced schedules than others.

Q: How hard is it to get into investment banking?

A: Investment banking is one of the most competitive and selective careers in the finance industry, and it is not easy to get into. According to some estimates, only about 2% to 5% of the applicants get an offer from a top investment bank. Therefore, it is important to stand out from the crowd and impress the recruiters and the hiring managers, by having a strong resume, cover letter, network, interview, and personality.

Q: What are the pros and cons of investment banking?

A: Investment banking has its pros and cons, and it may not be suitable for everyone. Some of the pros are:

High compensation: Investment bankers are well-paid for their work, and they can enjoy various perks and benefits, such as bonuses, commissions, travel, or entertainment.

Learning and growth: Investment bankers can learn a lot from their work, and they can develop various skills and knowledge that are valuable and transferable to other fields or careers.

Networking and exposure: Investment bankers can build a strong network and reputation in the finance industry, and they can get exposure to various clients, investors, sectors, and markets.

Some of the cons are:

Long and stressful hours: Investment bankers have to work long and irregular hours, often under high pressure and stress. This can affect their health, well-being, and work-life balance.

High competition and expectations: Investment bankers face high competition and expectations from their peers, managers, clients, and markets. They have to perform well and deliver results at all times, or they may risk losing their job or reputation.

Ethical and moral dilemmas: Investment bankers may encounter ethical and moral dilemmas in their work, such as conflicts of interest, insider trading, fraud, or corruption. They have to balance their professional and personal values and principles, or they may face legal or social consequences.

Conclusion

Investment banking is a rewarding but challenging career, and it requires a lot of skills, qualifications, and preparation. If you are interested in pursuing this career, you should do your research, network and connect, prepare your resume and cover letter, prepare for the interview, and follow up and thank. You should also weigh the pros and cons of investment banking, and decide if it is the right fit for you.

I hope this article has given you some useful and interesting information about investment banking jobs. If you have any questions or comments, please feel free to leave them below. Thank you for reading, and good luck with your career! 😊