Imagine, you hear about the long working hours, big bucks, and million-dollar deals made by investment bankers, and it gets you interested.
You do your homework, get your degree in order, remember the names of Bulge Bracket firms by heart, become a certified investment banker, write a good enough cover letter to earn you a first-round of interview, and guess what, you get in! Now what?
The intensely competitive field of investment banking can appear like a larger than life place where huge deals are done, and fortunes are made. Finding your place in this big space can be overwhelming. It’s specially confusing when you are just starting.
Here we bring you a glimpse into a typical day in the life of an investment banker to help you survive the initial adjustment period, ending with some hard points about – the pluses and minuses of making a career in investment banking.
A typical day in the life of an investment banking professional – From the inside
Starting off, the investment banking organization chart may look complex. To simplify, there are three essential divisions in which professionals work; Investment Banking (Raising capital and identify merger targets); Sales & Trading; and Research. The routine days, especially for those starting out in the industry, are long and stressful.
A typical investment banking analyst or associate works for a minimum of 90 to 100 hours a week. The day starts from 10:00 am and goes well till 2:00 am. ~Andrew Gutmann, Former investment banker
Table of Contents
Morning of investment bankers – Slow and steady
Once an analyst or associate move past the adjustment phase, on a typical morning, they wake up (or may in the middle of night too) with lots of emails and messages. The mornings of an investment banking professional are full of administrative emails and office meetings, and thus are also slow. The messages can be from clients or coworkers and seniors. It is usually from the latter who need status report, presentation, and double or triple checking the calculations.
Mornings are usually slower and methodical. They may start from 9:30 (for analysts) and 10:00 (for associates). An associate usually has the time to shower, take breakfast, and workout before going to office.
Analyzing clients’ portfolios and companies, making changes requested from seniors (who generally spend their mornings going over the work done on the previous day) is how the morning is spent.
Afternoons of investment bankers – Peak working hours
Lunch break is normally between 12:30 to 2 pm. A leisure lunch constitutes a 45 minute or hour-long break, while often due to work pressure is shrunk to half. Given strict hierarchy in investment banking industry, lunch time almost always is spent with coworkers on the same level. So, analysts would normally eat without inviting associates or vice presidents on the table.
Workwise, by the end of lunch, associates expect to have updated models and frameworks on their desks from analysts to review and make corrections or recommendations. A soft clash may come to light here – with analysts sure about their knowledge of what the higher-ups (VPs, directors and managing directors) want in the models thus avoiding any unnecessary changes given to them by associates, who in-turn need to prove their importance in the process by contributing through pointing problems.
Afternoons are the peak time of the working day and focus on an active deal. Analysts work with professionals in equity research or sales staff to adjust their analysis. Most investment banks assign a team “one deal at a time.” Senior bankers, here, are extra cautious about finalizing any deal and signing any document, for even a little mistake can cost millions.
Evenings of investment bankers – The second half
Evenings are usually segmented into before and after dinner. Before dinner, analysts are on the heads of their associates to review their work so recommendations and comments can be incorporated in the work. Dinner is often taken in the office itself between 7 to 8 pm.
At this time, a senior investment banking professional spends hours reviewing the material sent to her and putting comments in the pitchbooks. The revision-comment-correction cycle repeats twice or thrice before the day ends. Complex financial models are run and over 100 pages of pitches are reviewed.
Analysts often spend a lot of their evening time with desktop publishing team of experts in software, PowerPoint, Photoshop, and other aesthetic related programs; as they rely heavily on them to revise their pitchbooks.
While senior bankers may end their days at 10 pm, entry-level analysts and associates almost always grind till 1 to 3 am.
This is how the usual days would reveal to investment bankers. As everything comes into focus, here are some motivating and not so motivating factors of embarking a career in investment banking industry.
Top 5 benefits of an investment banking career
- Big Bucks (Of course!) – including compensation, which is tied to the market, and bonuses that are usually highly rewarding and often exceed the basic salary.
- Best platform to pick up the knowledge of analytics and financial aspects of business world inside out.
- Opportunity to work with intelligent and industrious people – seniors as well as clients.
- Gain a high-worth network.
- Exciting life full of high-stake moments.
5 Main drawbacks of an investment banking career
- Long working hours.
- No job security.
- Tedious work at entry-level.
- Dealing with big ego personalities and abrasive workaholics.
- Life becomes contingent to the market; A bear can put you out of work.
Investment banking is undoubtedly one of the hardest jobs marked by long and stressful working hours. That said, the financial and intellectual rewards are tempting! A certification can help you swim the troubled waters of adjustment period and get you recognition in this highly fast-paced and competitive industry. Are you prepared for this taxing yet gratifying career?