Investment banking

[Sheva #7]

Hey guys I am thinking of going into investment banking and was wondering if anyone here has any insight on this proffession??

I've heard about long hours, early morning-late night work but at the same time i heard you can earch up to 250k per year which definitely attracts me.

What kind of person do you have to be to excell as an investor banker? what can i expect? anyone here had any experience/works as one?

any help/hints/tips/feedback would be appreciated.

[Flames89]

www.vault.com

[Cowperson]

Originally Posted by Sheva #7

I've heard about long hours, early morning-late night work but at the same time i heard you can earch up to 250k per year which definitely attracts me.

.

If you can't spell "earn" in that business in particular, you'll have a tough time.

Sorry, couldn't resist.

Cowperson

[AaronSJ]

I worked on Bay St. for a summer and have several friends that currently work in the industry -- it was NOT for me!

To be an investment banker, obviously you need to have an understanding of markets and finance, and well as strong quantitative skills. The people that get hired are generally very driven, competitive, focused high-achievers.... and are frequently (my opinion) driven by money and the prospect of earning even more money.

To excel as an investment banker (your question), you need to "be better" than the average person I described above. In order words, you'll need to work harder, learn more, and prove yourself as smarter & brighter than your colleagues (most of whom are already hard workers and quite intelligent).... it's not a world for the faint of heart or those who are easily offended by their co-workers!

My advice would be to try to get a summer placement or internship in IB -- paid or otherwise -- to give you a real feel for the job. It certainly changed my mind as I just wasn't cut out for that working environment.

[Cowboy89]

Originally Posted by AaronSJ

To be an investment banker, obviously you need to have an understanding of markets and finance, and well as strong quantitative skills. The people that get hired are generally very driven, competitive, focused high-achievers.... and are frequently (my opinion) driven by money and the prospect of earning even more money.

To excel as an investment banker (your question), you need to "be better" than the average person I described above. In order words, you'll need to work harder, learn more, and prove yourself as smarter & brighter than your colleagues (most of whom are already hard workers and quite intelligent).... it's not a world for the faint of heart or those who are easily offended by their co-workers!

###

I have many banker friends, and that summed it up nicely. I chose not to go down that route after business school because despite having all the academic and aptitude qualifications, I just don't have it in me to make my body sick from 4 hour sleep nights for 3 years straight all to be put out of a job eventually due to a competing analyst who managed to find a way to do it with only 3 hours sleep. It's really a dog eat dog world where you could be thrown under the bus at any time. Not a good way to spend your 20s I thought.

[Ozy_Flame]

I have finance friends who are burnt out from it, a couple of which I know are addicted to coke to get them through.

It's not for the faint of heart, and certainly don't let the potential for profit be your motivation. You have to do in life what you love, and I think you'll find that you can make half of what an investment banker makes but be twice as happy if you do what you like doing best.

Of course, I'm an HR major, so I come from a peasant-based frame of mind in the business world. =)

[urban1]

Much of the above is accurate but somewhat exagerated. It is very competitive to get into and competitive to get ahead. That said, a lot of stories out there are the extremes and not the daily grind you should expect. Long hours and weekends are to be expected but talk to a lawyer or CA trying to make partner at their firm.

IB isnt for everyone. It does however provide great exit opportunities even from the analyst position after a 2 year stint.

[philip1985]

I use to work at TD bank as a financial advisor and knew a few investment bankers. They definitely worked very hard to keep their clients happy. Long hours are expected, and you need to go above and beyond since the market is fairly competitive. If you have a few connections, that goes a long way to success.

The problem with investment bankers or say mortgage brokers, some of them don't have a salary they are paid on commission. They will give you a salary for say the first few months, and then you are on your own. One of my friends was working as an investment banker for a while, but decided try his luck as a financial analyst. He is definitely doing a lot better both physical and mentally since the change. Then I have a friend who is a mortgage broker and she absolutely loves it. It was hard to get into the market but now she is doing quite well. Even though mortgage brokers and investment consultants are different things, the work associated with both are fairly similar being it is fairly hard work involved.

My advice to you would be if you are a type of person that likes a challenge and doesn't get discouraged easily this might be a good career choice. Just don't do it for the money because you'll just end up hating your job.

[CaramonLS]

Originally Posted by Sheva #7

Hey guys I am thinking of going into investment banking and was wondering if anyone here has any insight on this proffession??

I've heard about long hours, early morning-late night work but at the same time i heard you can earch up to 250k per year which definitely attracts me.

What kind of person do you have to be to excell as an investor banker? what can i expect? anyone here had any experience/works as one?

any help/hints/tips/feedback would be appreciated.

Dedicated, driven and you're going to have to sacrafice seeing your family too.

I remember spending 5-6 hours a week late at night at my dad's office downtown, because he was always in, always working. He'd be gone at 6 am each day, home usually by 7-8 each night, 6 on a good day. Usually going in on a Sat/Sunday for a little while, and occasionally "just stopping by the office late at night after swimming". You're going to have to love to travel too. Sometimes my dad was gone on as many as 8 trips in a month (very high end), but probably you're flying 2 times a month at least, depending on where you work. A lot of conference calls on Saturday AM/Sunday AM.

Oh, and 250k is quite a low end salary once you factor in things such as year end bonuses, which can be absolutely insane for the IB. Of course, it depends where you work and how much you put in.

[Cowboy89]

Originally Posted by fotze

Are investment bankers those late 20's guys who walk 5 abreast down Stephen Avenue mall at lunchtime with matching $3000 dollar suits, laughing so everyone can hear them possibly smoking cigars? or are those Lawyers?

Yep those would be the ones! They do everything as a team!

[Wookie]

Originally Posted by fotze

2nd question, what do investment bankers actually do. Are stock brokers/traders the same thing?

Advise on hot stocks?

Mergers, acquisitions, public offerings, raising of capital, etc. for an exuberant fee

[firebug]

I am currently a 2nd year associate at a small mid-market firm here in Calgary (will be moving to VP once my PD&O is complete).

Like many things in life, what you hear is often the extreme rather than the norm.

Do expect: many long hours especially at the larger firms, to be around selfish and ambitious people, to be exposed to the type of wealth that you may not have been able to fully comprehend previously.

If you are serious about getting into the business, right out of school, you should be getting a finance degree (B.Comm) or an MBA. There is however the rare IB who comes from Economics or a Math background. More importantly you should clearly be in the top of your class, and have a heavy extracurricular involvement (most of the IB's who came out of Haskayne the year I graduated (2005) were CPMT members or presidents of one of the other campus clubs).

Expect to start as a summer student after your junior year, and then you would typically begin full-time September after you graduate. Analysts would start with a 'draw' of $75k, $15 signing bonus, and an annual bonus of up to 100% of your draw (note these figures may no longer be accurate as demand for new IB's has dropped in the last year or two in Calgary).

Attrition is around 50% in the first two years, then most firms would require the survivors to get an MBA before coming back as an Associate.

The real money comes in the VP and Managing Director levels (top MD's in Calgary will earn >$10MM, good VP's can make $1-$2MM). But the true wealth comes from the opportunity IB's receive to invest in business opportunities much before the general public.

Best regards,

~firebug

[Option84]

Don't you also need to pass a series 7 exam or something? Or am I thinking of something else?

[Flames89]

Read the book Bank by David Bledin. Great Read about the industry. Much better writing style than the author of Monkey Business (another required read for the industry).

[Cowperson]

Originally Posted by Option84

Don't you also need to pass a series 7 exam or something? Or am I thinking of something else?

Series 7 is a USA SEC requirement to be a broker licenced to offer advice in an American jurisdiction.

Cowperson

[Sheva #7]

Wow there seems to be a lot of negativity about the proffession...any positives that come to mind except for pay?

[arsenal]

Originally Posted by Sheva #7

Wow there seems to be a lot of negativity about the proffession...any positives that come to mind except for pay?

First you get the money.
Then you get the power.
Then you get the woman.

[Flames89]

Sheva,

Follow my suggestions. Vault gives you insider views of the industry, plus each employer. Books such as Monkey Business (and I would say Bank) are required reading.

Watch Wall Street and Boiler Room.

Positives? If your personality is the type you will be working with bright, driven individuals who are as hungry for success as you are. If you can't see yourself enjoying long hours, than look elsewhere. You can't overlook the pay - an investment bank can make money in good times and bad.

[State of Trance]

The guys that cannot make it to IB in NYC actually end up doing it in Canada. Investment Bankers have tons of attitude from the ones I meet here and feel like they are superior to everyone else. What do they know that at top targets Like HYPS IB is a mediocre job and all the top guys end up at MBB consulting which is far more prestigious then any IB.

[valo403]

I'd say first things first look into the academic credentials you're going to need to go into finance in any capacity (there are lots of roles other than IB, including consulting and financial modelling) and see if it's something that clicks for you. If you aren't going to be able to excel academically you likely aren't going to get your foot in the door (absent nepotism).

I've worked deals with big time IB people and they seem to run the gamut from the stereotypical person others have listed to really cool down to earth people. It will be demanding, it will be incredibly stressful and you will have days that you absolutely breakdown. I went through it on the legal side before finding a niche that allowed me to avoid a lot of that stress and it's not fun at all. At the end of the day you have to ask yourself if it's worth it, be it for the money or the experience, to make that sacrifice.