What is true of investment banking

FSA
#1

Investment banking has a reputation for lavish salaries, long hours and super competitive environments.

There are stories of people being at their desk at 6.15am and working through until midnight and past. There are stories of young people making 6 figures in two years. There are stories of burn out, sacking and resignation.

It would be easy to believe that all of this is a bit exaggerated. It isn’t.

Working at an investment bank is hard work, and only a certain kind of person will be able to do it.

The larger investment banks will take graduates on board as an associate, which means you are a general dogsbody, and this will last two years. The purpose of this is two-fold, to train you, and to obtain cheap labour. Many people will leave after two years to go elsewhere, and others will be laid off. Investment banks, like many city firms, are very bottom heavy, in that they are built of a large number of competitive young people, managed by relatively few experienced persons.

The training you will receive will vary from one bank to another, but the core training you will get anywhere is with repsect to the law and FSA guidance. It is very important to all investment banks that they understand what could bring the firm into legal troubles, mostly fraud, confidentiality and insider trading related. In a few firms you may also be able to acquire the CFA qualification, and this is a very worthwhile target.

The long hours are likely to occur. The people who work at investment banks are, in truth, geeks. Many an hour will be spent in front of the computer. You must be certain when you join that there is nothing else that you want to do, as you are unlikely to have the time to follow many other pursuits. If you are joining from being a student, or being unemployed, you are very likely to have the shock of your life. To spend 24 hours at work is not unheard of the day before a deal.

On the plus side, your body does get used to it (eventually).

Though firms actively encourage that everybody takes their (statuatory) 20 days holiday, few do.

Bonus’s can be up to 100% of your salary, but don’t get your hopes up. Investment banks are not stupid, they know how to make money, and they will not pay you large sums of money unless you’ve earned it. They like to keep the atmosphere competitive, so bonuses are not equal. It is accepted practice in investment banks never to discuss bonuses amongst colleagues, and when you enter the room to be told you bonus, you are expected to leave the room with a poker face, revealing nothing.

After your two years are up, the world is you oyster, the financial possibilities are largely endless, but you will still work very hard. A large part of being successful in any firm like this is if you ‘join the club’. What this means is, a lot of firms are a sort of ‘clique’. If you are part of it, go drinking with the senior staff, go to the cricket, talk about the cricket etc etc, you may find yourself in a vastly better position. People tend to promote their friends.

Sometimes people from different cultural backgrounds can have trouble integrating with a largely British contingent, and consequently a ‘glass ceiling’ can occur, where you do not get promoted any further and you do not understand why. This can happen if you socially isolate yourself, so it’s best to be aware of it and prevent that happening.

Lastly, investment banking isn’t for everyone. The money’s dizzying, the work is serious, difficult and at times, both exceptionally boring and exceptionally challenging. It isn’t for everyone. If you are a creative genius, don’t bother, you won’t be able to exercise much creativity as an investment banker. If you aren’t driven by hard cash, again you are wasting your time.

Everybody who applies for these jobs knows that if they get one, they are made for life, so you must be 100% committed; if you are not, somebody else will be.

#2

Excellent article :smiley: thanks :slight_smile:

#3

Dear chrism2671

Informative article, it does give a very good picture of life as Investment banker. I graduated in 2004 in Electronic Engineering but not with good results, I achieved 2.2 which I would put down to not good preparation in couple of exams and missed 2.1 by few marks. Since graduation I have been working in automotive industry and my latest job is working as system Integration engineer. I would like to apply as an application/system engineer in Goldman Sach and few other institute. I have got right motive to work in IB, driven by money and excelling myself to achieve maximum. There is few question I would like to ask, would they consider me with 2.2 and 4 years experience, Shall I go as a new Analyst or Associate. More importantly as an engineer are you on the same track interms of salaries+bonuses as other traders and employees.
Thanks in advance.

#4

The technology scheme at [[Goldman Sachs]] is quite challenging and difficult to get onto. There is of course no harm in applying, but they will want to know why you got a 2.2- you should have a good excuse for that.

In terms of salary expectations, technologists are not paid in quite the same league as [[investment bank]]ers, but the salaries are still very substantial indeed, and you could still hope to make 6 figures in a relatively reasonable time frame.

I should point out that there couldn’t be a worse time to apply- companies are more interested in shedding staff than recruiting at the moment. The collapse of [[Lehman Brothers]] and impending collapse of [[Morgan Stanley]] marks one of the most severe financial situations of the last 100 years.

#5

thanks for the information. How about doing masters and getting 2.1 and then applying. Would that cover up?

#6

thanks for the information. How about doing masters and getting 2.1 and then applying. Would that cover up?

#7

It will definately help. Especially in the current climate, you would do well to do something else before applying- there aren’t very many [[investment banking]] jobs going at the moment.

#8

What do you actually do as an analyst in an investment bank? I heard most work will be based on research. Is that true?

#9

Depends on the position. If you’re an [[analyst]], you’ll be doing mostly research, excel work - have a look at this article - [[analyst]].