Fresh Advice: Investment Banking Jobs

Published on 2008-07-09

Perhaps at some future date an economic historian will write, in homage to Voltaire's quip about the Holy Roman Empire, that "this agglomeration which was called investment banking was neither investing nor banking." In truth, "investment banking" is less a misnomer than it is an umbrella phrase which covers financial services and functions ranging from the provision of investment advice to asset management to the raising of capital via private equity or the selling of securities. Despite intense competition, a treacherous learning curve and extremely long hours for graduates fresh out of business school, investment banking careers are in high demand due to the intense, fast-paced nature of the work and its potentially highly lucrative pay. Here's what you need to know if you want to land investment banking jobs in today's economic climate.

The Competition Just Got Tougher

According to The New York Times, over 80,000 brokerage and bank jobs have been lost as a result of the ongoing credit crisis. Investment banking professionals have borne the brunt of these layoffs. Citigroup has cut 6,000 investment banking jobs, which represents about 10% of that division's workforce, and the layoffs from the JP Morgan/Bear Stearns merger are expected to total around 10,000 workers.

How long it will take for the U.S. economy to climb out of the ongoing recession is a matter of debate. But for the moment, both experienced and aspiring I-bankers may need to consider current entry opportunities more than future exit opportunities. Graduates who are interested in investment banking careers may have to go farther afield to find work. Seeking out boutique firms, regional investment banks and middle-market banks could open up career opportunities during the bulge bracket employment doldrums. Joining a good banking team at a boutique firm rather than a bulge bracket could even prove beneficial over the long run.

Stay in School

For current students or college graduates who have not yet earned an MBA, now would be a good time to do so. MBA holders earn higher salaries even at entry level finance jobs, and the two to three years it takes to earn a master's degree in business administration would give the economy and labor market time to recover. Possessing an MBA would also enable one to compete for fast-track associate jobs, bypassing some of the tedious modeling and research work to which beginning analysts are subjected.

An undergrad who is interested in pursuing an investment banking job should obtain a bachelor's degree in finance, economics, computer science, math, accounting or a related subject. Choosing an area of specialization early on can help you to cater your educational experience to your career objectives. For example, students who wish to pursue financial services jobs dealing with public entities such as governments, hospitals, and NGOs could earn credits in classes relating to taxation issues in the non-profit sector.

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