In this CareerStint article, an overview of the average salary of an investment banker is provided for your perusal. As you will discover, despite the recent downturn in equity markets all over the globe, investment banking is alive, kicking and paying well.
According to The Bureau of Labor Statistics, the demand for investment banking advisory services and commodities trading are likely to create strong employment growth. Employment in the field of investment banking is projected to grow 11% from 2012 to 2022.
Investment banking is the best career option for those who find their calling in finance and accounting. A bachelor’s degree in accounting or finance, followed by a master’s degree in business administration will adequately equip you to deal with the challenge which investment banking poses. What you essentially need is a keen intellect, well versed in mathematical and analytical skills. Such an individual is bound to excel in this profession. To give you a heads up right away, the starting emoluments can be in the range of $100,000 to $150,000.
We all know that investment banking is one of the most lucrative and highest paying career options. The pay scale for this profession largely depends on the education and experience of the candidate, and also on the location and size of the firm/organization.
- Many people are successful in entering this field, even with a bachelor’s degree. For them (assistants or junior analysts), the starting salaries should be in the range of $70,000 to $150,000 after bonus. This salary is markedly high compared to what is offered in other professions at the entry level. Ergo, it’s not surprising that we find investment banking at the top of the highest paying jobs list.
- The candidates who enter this field with a master’s degree in business management can expect to earn a decent package of $110,000 to $350,000.
- Another striking feature which governs the salary is the bonuses which they receive. Initially, a bonus in the range of fifteen to fifty percent of the salary, may be expected. However, the current economic scenario portends a cut in entry-level bonuses.
- Experienced investment bankers can earn bonuses as high as two to three times their remuneration. The salary range spread is very wide, because of the addition of an equity component to their basic salary.
- Analysts are at the bottom, and generally remain at that level for three years. They often work 80-120 hours per week! Analysts level positions are also known to earn well. There are first year analysts who earn anything between $70,000 and $150,000 annually. Salaries of the second and third year analysts can be $80-190K. Analysts often get sign-on bonuses which usually fall in the range of $5-20K.
- The emoluments may even touch $350,000 after third or fourth year.
- Associates rank higher in the corporate hierarchy, and certainly earn better than their subordinates. The educational requirements for associates are a master’s degree in financial administration along with the basic bachelor’s degree. Fresh M.B.A. graduates can join as associates. For first year associates, the salary figures can be in the range of $150-350K, and for third year associates, $250-500K. For the first year, the bonuses are usually in the range of 10-50% of base, but after a couple of years, they can grow, and can be up to 300% of base.
- Investment bankers who have spent several years in the financial services sector get the opportunity to work in prestigious positions as Vice Presidents, Managing Directors, and Directors. Based on the criteria mentioned above, the salary figures for Vice Presidents (3-6 years experience) can be in the range of $250,000 to $1,500,000 (1.5 M). The annual income of Directors and Principals (5-10 years experience) can be anything between $400,000 to $1,500,000 (1.5 M). Partners or Managing Directors (7-10 years experience) are the biggest earners with salaries ranging from $500,000 to $20,000,000 (20 M) or even more. The average pay for these experienced financial wizards is around 3 to 3.5 million dollars.
* Source: Wall Street Oasis
Investment bankers help the companies in acquiring funds, besides facilitating purchase and sale of various securities. Allocation of capital to enterprises with promising futures, with the aim of maximizing profits for the investor, is the central guiding principle. These people play an important role in acquisition and merger plans of companies. They are the people who handle the initial public offering (IPO) of companies, and help raise capital. Investment bankers also shoulder the huge responsibility of rescuing a company from heavy financial losses. They are expected to suggest ways to improve the situation. They rarely get free time. They have to make phone calls across the globe as the time zones move. Thus, they are expected to work almost 24×7, and can hardly relax.
The lucrative salary in this profession has led to a rise in the number of aspirants who wish to enter it. We may conclude that a career in investment banking is one of the most handsomely paying ones. Be aware that it comes with a considerably high amount of risk and challenge presented by millions of investors, as they put their hard-earned money at your disposal. It is a high-stakes and high-risk game. If you think, you have the requisite financial acumen and the mental toughness required to handle stress and mounting expectations, this is the profession for you.