Is a career in investment banking worth it?

Investment bankers are usually the highest paid employees in the financial industry-even among young employees, high salaries are the most common. The typical investment banker’s starting salary exceeds most other financial positions, but working in this field has its challenges. Aspiring financial professionals may want to check whether a career in investment banking is worthwhile.

Key points

  • Although the salary is high, the pressure on the investment banking industry is also great.
  • Investment bankers sometimes work long hours and often face time pressure to complete transactions.
  • Despite the traditional culture of prominent work, many investment banks are reassessing workload and encouraging employees to maintain a less stressful schedule.

Working environment of investment bankers

Investment bankers work with companies and government entities that raise funds, and bankers also provide advice on mergers, acquisitions, and restructuring. Traditionally, investment bankers work long hours, sometimes as much as 100 hours a week. Bankers often face time pressure because many projects have tight deadlines.

However, the banking culture also values ​​and admires people who work long hours, and many companies have a prominent work culture. This term refers to a corporate culture in which every employee pays attention to other people’s working hours. This situation creates competition to take on more work at all costs.

Reliable bankers will get more jobs, which will make work schedules unmanageable. The work environment can cause physical and mental harm to many people working in this industry.

Industry changes

In 2015, two young investment bankers ended their lives. Shortly before their death, both workers did not get enough sleep, and both workers contacted their family members to explain their workload.

These tragedies have caused many companies to change their company’s working hours policy. Some companies now implement a protected weekend policy, which means that bankers cannot work on specific weekends. Almost all companies now require employees to refuse additional work, if these work will lead to excessive working hours in the office.

Ironically, recent studies have shown that overwork can make bankers less efficient, which means that more working hours do not produce the same level of high-quality work. A general rule of thumb is that bankers should not process more than two bank transactions at the same time, otherwise the workload cannot be managed.

USD 82,027

The typical basic starting salary for an investment banker does not include signing or performance bonuses.

Traits of a successful banker

Financial professionals should consider whether they possess the personal attributes needed to succeed in investment banking. In addition to the potential to work long hours, bankers must also be able to handle stress well and work on multiple deadlines at the same time.

Investment bankers must be able to start projects on their own and manage time well. Financial modeling and the use of Microsoft Excel are often important skills that many investment banks must master.

If the existing workload is too great, investment bankers should be able to speak out and refuse to work.

Alternatives to investment banking

Investment banking companies traditionally hire new employees from the best MBA programs in the country. However, many of these students no longer see banking as a career. In elite MBA programs such as Harvard Business School, more and more graduates are entering technology startups and other fields such as private equity and corporate finance.

This shift has also prompted banking companies to evaluate the number of hours each banker has worked, and if these hours are reasonable, they have to take into account the needs of their customers. Other career paths in investment banking can include asset management, corporate finance, or stock research.

Bottom line

If professionals are unwilling to make these sacrifices and are not primarily motivated by money, then the employee may not be able to become an investment banker. Financial professionals who need to strike a balance between work and personal life should not work in investment banks.

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