The economy is improving. When this occurs, the job of the investment banker is in demand, and it has a wonderful outlook. Many vice-presidents started as investment bankers, and this is true of managing directors and partners as well.
Even though investment bankers are highly coveted professionals, not everyone knows exactly what these people do. After you learn the investment banker’s job description and the investment banker’s salary, you may believe that entering into this profession would be worthwhile.
What Does an Investment Banker Do?
When executives with an organization need to raise capital, they seek the assistance of investment bankers. Investment bankers work very closely with these executives because each entity is distinct with different needs and capabilities.
Raises Equity Capital or Debt Capital
Executives with a company or an agency know that they must raise equity or debt capital, but they may not know how to go about doing it.
This is the job of an investment banker as well. He or she will determine whether it is possible for a company to raise equity or debt capital and will develop the most advantageous strategy for doing so.
Ensures That Everyone Follows the Rules
Executives must follow the rules and regulations set forth by the Securities and Exchange Commission, but not everyone knows what these laws are.
Investment bankers are one segment of the population who do know these laws, and they ensure that their clients follow them when they are engaged in raising money for their companies.
Brings Investors and Entrepreneurs Together
Executives with a company or a government agency turn to investment bankers because they have access to a network of private and institutional investors.
These investors are the ones who have the money that companies and agencies need, and investment bankers are the ones who put these two different groups together.
The Investment Banker’s Job Description
An investment banker draws up the agreements for mergers and acquisitions. When companies are experiencing financial difficulties, an investment banker studies their books to find out what is going wrong. Then, he or she offers a solution to the problem.
An investment banker also takes part when a company releases its stock. In some cases, the investment bank is the underwriter for the company’s stock, and the investment banker searches for people to purchase these shares.
Lastly, investment bankers manage the investments their clients make.
The Investment Banker’s Salary
The investment banker has the potential to earn more than $100,000 a year. Generally, an investment banker is required to have a master’s degree in business administration or MBA, but people can become investment bankers with only a bachelor’s degree.
An investment analyst receives the lowest average salary at $56,637 a year. The highest earners are the top investment executives, and they earn close to $250,000 a year.
Investment bankers receive substantial bonuses at the end of the year, so their salaries are often much higher than the figures listed above. This is true even for those who are just starting their careers and do not have any experience.
Therefore, a new investment banker who earns $60,000 a year actually receives between $90,000 and $100,000 for the first year because of bonuses.
Similarly, the top earners can make more than $500,000 because they earn three times or even four times the amount of their base salaries.