How to Become an Investment Banker – College & Career Advice
March 14, 2025
If the profession of investment banking feels shrouded in mystery, you’re not alone. Maybe you know that investment bankers do… something with money. Something that promises financial remuneration in the future.
However, what exactly investment bankers do may not be clear. That’s completely all right. This article is here to demystify what investment banking is and how to become an investment banker.
If you know you want to become an investment banker, you may wish to start planning your journey as early as possible. Investment banking is a rigorous career in which those who are focused from the beginning advance quickly. Despite the eventual payoff, breaking into this highly competitive field can be challenging and takes several years of hard work.
This blog post discusses how to navigate these years of hard work. It summarizes an investment banker’s role, typical salary, the types of jobs available, and the general industry outlook. Then, it dives into how to prepare for success through college and graduate school, how to apply for your first job, and best practices to keep in mind while shaping your career.
What does an investment banker do?
In simple terms, the job of an investment banker is to connect companies with capital. An investment banker might be involved with helping companies get sold, go public, or raise funds. Fundraising takes place through debt or equity issuance. In return, an investment bank keeps part of the funds raised or received as payment. This payment is known as a success fee. It also earns a fixed advisory fee.
Investment bankers play a key role in the process as the central liaisons between companies and the funds they seek. They have a unique role in facilitating how and where money flows, with potentially massive social and economic ramifications. As such, they get to be on the pulse of future trends. After all, investment bankers do not just tap into growth opportunities, but anticipate them before they arise. Keeping an eye on businesses with the potential for success allows them to channel the capital that shapes the future. It is a big responsibility and not an ethically neutral one.
Work-life balance for investment bankers, especially as they start out their careers, is typically less than in fields such as tech but can be better than in professions like law. There is a lot of scope for remuneration and professional advancement. Investment bankers gain plenty of access to the rooms where decisions are being made and are often the ones making these decisions themselves. For those interested in an international career, whether through business ties, travel opportunities, or living abroad, investment banking may be a route worth considering.
What is the average salary for an investment banker?
Average salary varies considerably based on firm, seniority, and geography. Annual performance bonuses usually offer a large bump. As you advance in seniority, your bonus will far outpace your salary. You may also hold stock options in your firm.
On Wall Street, the average salary for an investment banker (both base salary and bonus) was nearly $565,000 in 2024, according to a recent report. This average considers all roles, from Analyst 1, the most junior ($158,889/year) to Group Head, the most senior ($2,088,250/year). It’s also worth keeping in mind that average salaries in New York are higher than in most other places.
What is the career trajectory for investment banking?
Investment banking is quite hierarchical, but you can progress up the career ladder quickly. Here is a list of job titles an investment banker might hold through their career. Titles and career trajectories vary based on company.
- Analyst I, II, and III
- Associate I-III
- Vice President 1-4
- Director
- Managing Director
- Group Head
Firms range from big, household names to smaller boutiques. You may have heard of global investment banks like Citigroup, Goldman Sachs, and Morgan Stanley, but should also research elite boutiques like Centerview, Evercore, and Lazard.
Major metropolises are also financial nerve centers and attract most jobs. Though salaries depend on cost of living and country, you may wish to explore a career or posting internationally.
Is becoming an investment banker worth it?
According to the US Bureau of Labor Statistics, the number of business and financial services jobs will grow faster than the average in the decade ending 2033. They predict almost one million new jobs per year across the industry as a whole. Consequently, investment banking should remain a stable and lucrative career, where you can thrive and find purpose.
No matter what career you choose, it is always important to be clear about your motivations and priorities. Weigh the pros and cons carefully and make sure you understand what one career entails versus another.
How long does it take to become an investment banker?
There is no one formula. It depends on when you begin planning your career. For those who get on the track in college, they enter the field right away. But there are also ways to move into the industry after acquiring a few years of work experience, most often through an MBA or related degree. Although this is a heavily tracked, pre-professional field, timelines do vary in reality.
FAQs: College & Graduate School
To become an investment banker, what major should I choose?
Certain fields undoubtedly provide a clear foundation for investment banking. Finance, economics, business, and math are all popular options. All the same, don’t rule out another major. You can be an English major who takes economics classes and has relevant extracurriculars and still land a summer internship at an investment bank.
What is most important is to do your best. Beyond getting good grades, focus on getting to know your professors. Regardless of major, develop basic technical skills like Excel and statistics, along with soft skills like interpersonal abilities. Take a variety of classes and be curious, because you never know where you will find inspiration.
How important is my choice of university?
For better or worse, prestigious universities make a difference. School reputation can give a boost to two similar candidates, while strong alumni networks provide pathways for new graduates. Wall Street hires heavily from feeder schools and schools known for their finance programs.
Still, not everyone goes to the same schools. Consistent achievement and commitment will help you stand out. In addition, many candidates choose to pursue graduate education, particularly MBAs. If you go to graduate school, employers will place more weight on this and your work experience than your undergraduate degree. Once you are working as an investment banker, the topic of where you studied will probably come up much less often.
What kinds of extracurriculars and internships are important?
Potential employers will look closely at your extracurricular activities and internships. They will want to see evidence of engagement and leadership. Look out for on-campus finance or investing groups. Some college organizations even allow students to manage part of the endowment and gain investment experience. If you are researching colleges, you may wish to ask about extracurricular opportunities. Finally, if something doesn’t exist, you can always start it.
It is difficult to overstate the significance of summer internships. Application cycles can start as early as the spring of sophomore year for the summer after junior year, so plan ahead as much as possible. Visiting the career center or speaking to older students can help. Building successively strong internships through college sets you up to get your foot in the door at a company you would enjoy working for.
Should I do an MBA or go to graduate school?
An MBA is not necessary for investment banking but can give you a leg up. MBA graduates typically begin at the Associate level. MBAs allow students to build professional ties, shift career paths, hone their skills, or explore a focus. Having a prestigious degree can open doors for the rest of your life.
Advanced degrees, whether Master’s or PhDs, in quantitative areas such as economics and mathematics have also historically been prized by investment banks. But other fields can facilitate entry to the field as well. Employers may find programs like conflict resolution or organizational psychology intriguing when combined with demonstrated interest in investment banking.
Fellowships are another option for those seeking to make career shifts or deepen their experience.
There are many ways to equip yourself through graduate education and continued upskilling to become an investment banker.
FAQs: The Job Search
What should I know about applying for my first job in investment banking?
Junior-year internships comprise a key recruiting pipeline for investment banking. Most post-graduate hiring occurs through return offers. As a result, students interested in becoming investment bankers treat their internship applications with the same seriousness as the job application process. Companies also consider students based on their potential as full-time employees.
However, just like when applying to college, much in the internship and job application process is unpredictable and out of your hands. If you do not receive a return offer, try not to take it personally and keep applying for open positions.
MBA and graduate degree holders will apply for positions that are higher up the career ladder. Having application materials sharpened and at the ready will make sure you are not scrambling at the last minute.
No matter what stage you are in, take advantage of your institution’s career resources and learn how to be a good networker.
How important is networking?
Because relationships are central to investment banking, it helps to know how to network. A lot of universities will offer networking resources and guidance, whether through career centers or special interest organizations. Networking is also a huge aspect of MBA programs (even online programs), which tend to be extremely social.
Prioritize developing relationships that are more than just transactional. In addition, it’s always good practice to not only network with people more senior than you. Those your age will end up being your colleagues and those more junior than you will remember if you treated them with respect.
In the future, your reputation will travel through the networks that you’re part of, and because of them.
Final Thoughts
As you are now aware, investment banking is a career that rewards keeping ahead of the curve. Continuous learning is an important skill for investment bankers, especially as markets shift and technologies change. Building this habit early on will prepare you for success as an investment banker throughout your career.
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