Neither CFA nor MBA, other qualifications for jobs in banking

Investment Banking professional Qualifications

Banking Investment / March 11, 2021

One of the main business functions of an investment bank is to operate as an intermediary between companies that want to raise money by issuing securities, and individual and institutional investors who are willing to provide money in exchange for securities. Investment bankers advise companies on what kind of securities to issue, such as stocks or bonds, and how, when and at what price to issue them. They also handle placement of the securities with investors, a process known as underwriting. In addition to working with private and publicly traded companies, investment bankers also underwrite municipal bonds and other types of debt securities.

Besides company financing activities, investment bankers also handle a variety of other complex financial transactions. For example, investment bankers facilitate company mergers and acquisitions (M&A) by providing advice and other related services to parties involved on either side of a potential transaction. They may assist an M&A client with company valuation, strategy formation and deal negotiation. They may also be involved in financing the final deal if it requires issuance of new debt or stock.

Career Path

Many investment bankers begin in the industry by participating in internships with investment banks when they are undergraduate students. Although an internship is not required to enter the field, it is an excellent way to get started. After graduating with a bachelor's degree, it is possible to begin working in the field as an investment banking analyst conducting research and producing analytical reports for more senior staff members. Working as a financial analyst in a wealth management firm, bank, hedge fund or other financial organization is also a good way to begin building experience.

Typically, with several years of experience and a strong record of good performance, an analyst can move into a junior-level position as an associate investment banker. This position may also be available to a highly qualified candidate with a master's degree and a strong resume but little investment banking experience. Most new hires are provided substantial on-the-job training that can last as long as two months. Junior investment bankers eventually participate in most aspects of investment banking, including the planning, structuring and execution of large financial transactions. With good performance, junior bankers can move into senior positions overseeing transactions from start to finish.

Educational Qualifications

A bachelor's degree is the minimum educational qualification required to work as an investment banker. Entry-level analyst positions in the field are typically open to bachelor's degree graduates, and it is possible to progress to a senior banker role without a master's degree in many investment banks. However, a master's degree is very common among the mid-level and senior staff in this industry, and it helps to pave the way for career advancement. In some investment banks, a master's degree is required for entry into the investment banker career track.

Most investment banks prefer degrees in finance, accounting, business administration and other business disciplines. Undergraduate degree subjects are less influential in the hiring process if a candidate has a master's degree in business administration, finance or another highly relevant subject. Coursework in finance, economics and mathematics is highly recommended.