How to Get into Investment Banking

People wondering how to get into investment banking should know that the process begins by earning a bachelor’s degree in finance, economics, or a related field. The next steps are to gain practical work experience in the field and be certified as a Chartered Financial Analyst by the CFA Institute, among other investment banking certifications. A master’s degree in finance is also valuable.

Certifications and Credentials

Before securing work as a broker or an investment banker, a person must register with the Financial Industry Regulatory Authority (FINRA). A person must also pass a series of exams to receive a license.

Other licenses are required to sell specific investment products and services, and renewing a FINRA license entails attending continuing education courses.

Other certifications can enhance a person’s chances of earning a position in investment banking.

• Chartered Financial Analyst (CFA) from the CFA Institute
• Chartered Investment Banking Professional (CIBP) from the Investment Banking Council of America
• Investment Banking Professional Credential (IBPC) from the IBP Institute

CFA Institute Chartered Financial Analyst

The CFA Institute describes the four steps required to become a charterholder:

1. Pass all three levels of the CFA exams that test financial knowledge as well as ethical and professional standards.
2. Complete the work experience requirements before, during, or after finishing the CFA program.
3. Submit two or three letters of professional references that detail work experience and professional character.
4. Apply to become a charterholder as a regular member with qualified work experience as an investment manager, or as an affiliate member if unable to meet the requirements to become a regular member.

Investment Banking Council of America Chartered Investment Banking Professional

The CIBP is divided into four tracks based on level of education and experience working in the finance and investment fields.

• Track 1 requires a Master of Business Administration (MBA) or other finance-related master’s degree and at least two years of experience working in investment banking, mergers and acquisitions, private equity, or related employment.
• Track 2 requires a bachelor’s degree in accounting or other financial major and at least three years of experience working in investment banking or a related field.
• Track 3 is for students currently in MBA or other finance-related master’s programs from institutions accredited by the IBCA or other global accreditation bodies.
• Track 4 is available to anyone currently working in a finance-related position who possesses a bachelor’s degree and an active CFA credential or other certification from a global accreditation body.

Investment Banking University Professional Credential

Earning an IBPC requires passing a four-hour exam that covers topics related to investment banking:

• Accounting, financial statement analysis, and financial reporting
• Microsoft Excel and PowerPoint for investment bankers
• Financial statement modeling
• Corporate finance, markets, and valuation modeling
• Merger and acquisition process and merger analysis
• Leveraged finance and leveraged buyout (LBO) analysis
• Effective communication

After passing the exam, candidates must demonstrate at least one year of work experience in the financial services industry within four years of passing. They must also have at least a bachelor’s degree or equivalent education, and they must adhere to the IBP Institute’s code of ethics.

Education Requirements for Investment Bankers

An investment banking education typically starts with an undergraduate degree in finance or economics. The BLS states that an MBA or other advanced degree in finance, economics, or mathematics is often required for high-level positions in investment banking and other securities industries.

One of the most important aspects of a finance education is the opportunity to develop a professional network, which is boosted by finding an internship with an investment banking firm while enrolled in a degree program.

Investopedia emphasizes the value to students of selling themselves. The site advises students to mix and mingle with potential employers or professionals whenever the opportunity arises. These people are in a position to give a boost to someone starting out in the field.