Are you interested in banking and finance and want a lucrative and fast-paced career? Then, a career as an investment banker might be perfect for you.
Investment banking involves dealing with various investments and managing money in different forms. Investment bankers act as brokers and advisors that provide financial services to corporate clients, governments, businesses, and other financial institutions.
To become an investment banker in Australia, you must complete a bachelor's degree in business, accounting, commerce, or economics, majoring in banking or finance. Undertake internships at a reputed investment bank to improve your job success chances.
This blog discovers the role of an investment banker, the skills needed, the recruitment process, salaries, exit opportunities, and steps to secure a career in investment banking.
1. What Is An Investment Bank?
Investment banks specialize in complex and financial transactions in industry sectors such as underwriting, mergers and acquisitions, sales and trading, asset management, equity research, and acting as financial advisors for institutional clients.
They act as a financial intermediary between companies to raise capital by issuing securities or as institutional investors to provide money in exchange for securities.
2. Types Of Investment Banking
Investment banking in Australia is broadly categorized into groups:
Full-service investment banks: They offer a wide range of services that include underwriting, mergers and acquisitions, securities services, trading, and merchant banking.
Boutique investment banks: These types of banks specialize in one or more services delivered in a particular location, such as advisory services.
3. Major Functions Of An Investment Bank
Learning about the functions of an investment bank will help you identify the business area to specialize in.
Equities (including the biggest stock markets and indices worldwide)
Commodities (intangible, abstract financial products like Coffee, oil, gold, and corn)
Mergers and acquisition
Proprietary trading activities
4. What Is An Investment Banker?
Investment Bankers are representatives of investment banks or financial institutions that work with privately-owned companies.
These skilled professionals study the financial health, capital requirements and objectives of a financial institution.
Investment bankers manage the investment portfolio of companies, work on mergers and acquisitions, and arrange and negotiate large financial transactions. Many of them also research the market and look at similar companies.
Investment bankers work either on the selling or buying side. When they work on the sales side, they help clients sell tradable financial assets such as securities, stocks, bonds, or banknotes. It helps banks to raise investment capital.
When working on the buying, side investment bankers assess their client’s needs, advise them on safe and efficient investments that meet them and facilitate those investments by negotiating deals and mergers. They earn profits by charging fees for their advice or earning commissions on the sale of securities.
5. What Do Investment Bankers Do?
Investment bankers perform a variety of tasks based on their area of speciality. Their general duties involve helping clients raise their investment capital or find the best investments that meet their needs.
Find investors for corporate clients, companies, governments, and organizations that require capital
Issue and sell securities or make IPOs assisting corporate clients
Advise corporate clients on safe and efficient ways of investing
Assist corporate clients to secure their investments that including bonds, foreign exchange trades, and stocks
Offer professional advice in areas of valuation, risk management, and capital structure
Assist corporate clients in mergers and acquisitions of other companies or selling their businesses to other corporate clients
Research and estimate investment opportunities and financial trends
Set up deals and negotiate favorable terms
Work with capital markets professionals, corporate finance groups, and professionals working in derivatives, financial strategy, convertibles, equity derivatives, and currency trading
Research and track equity or debt capital markets
Undertake transactions in bonds, currencies, equities, futures options for large institutional investors
Develop fully integrated elaborate financial models to assist Financial Planning and Merger and Acquisitions transactions.
Use various methodologies such as discounted cash flow, trading, transaction comparisons, and leveraged buyout to perform valuation analysis
Conduct company and industry research to develop new business
Manage all stages of the transaction right from pitching clients to closing investment deals.
6. Investment Banker (IB) Qualifications In Australia
Do you want to work in Investment Banking in Australia? You need to have the right skill set and qualifications to enter a role in this profession.
Complete your secondary school certificate in mathematics, economics, and business studies.
Get at least a bachelor's degree in business, accounting, commerce, and economics, majoring in banking or finance.
Previous Leadership experience is beneficial.
Knowledge of a foreign language, global politics, international markets, customs, and diverse cultures can help you stand out as an applicant.
7. Investment Banker Skills For Success
Unlike commercial bankers, investment bankers need high-level public speaking and communication skills due to their focus on pitching to clients. Additionally, strong technical skills and computer literacy are essential to succeed in this role.
Here are the most sought skills that could help Investment bankers succeed in their careers:
Good understanding of financial instruments, securities, capital markets, options, futures, IPOs, stock markets and derivatives.
Global and cultural awareness
Strong computer skills to use software to research markets and perform financial modeling
Proficiency in Microsoft Excel, Keynote, and Microsoft PowerPoint to create presentations for management and clients
Good understanding of modern tech concepts such as cryptocurrencies, artificial intelligence, and blockchain
Strong statistical analysis skills
Able to break down and analyze vast financial data
Team working skills
Collaboration skills to serve overseas clients better
Intellectual curiosity and agility
Able to bring creative and fresh ideas and new perspectives
Strong personal resilience
Strong professional communication
Strong analytical skills
Confidence with numbers
8. Steps To Become An Investment Banker In Australia
Investment banking is a career where you help clients raise their capital to fund their activities and expand their business.
If this career interests you, follow these steps to get the necessary qualification and experience to pursue this role:
Step 1: Gain Your Secondary School Certificate
The first is to complete your secondary school education. Study subjects that help you develop a foundation of knowledge in banking. Some of the recommended courses to study at high school include advanced mathematics, business studies, and economics.
Make efforts to obtain a good ATAR to get into high-quality university courses.
Step 2: Obtain A Relevant Bachelor's Degree
Since investment banking is notoriously competitive, a bachelor's degree is necessary to land an investment banking graduate job. Though the degree doesn't necessarily have to be in finance, it should have a strong focus on mathematics.
A Bachelor's degree in business, accounting, economics, management, and commerce, majoring in banking or finance, is beneficial. You can even consider completing a dual degree, such as a Bachelor of Commerce and Law or a Bachelor of Commerce and Business.
Top investment banks seek candidates with a grade of 2:1 or above. Interested candidates can pursue further education with an honours year or earn a master's degree in finance or business administration.
Step 3: Undertake An Internship
You can enter the profession without an internship. However, as investment banks place significance on work experience, your chances of success are way better if you have done an internship.
Participating in an internship program at an investment bank helps students gain industry knowledge and broaden their understanding of finance and financial markets. Practical experience provides a launch path into this profession.
Most smaller boutique banks and large banks recruit entry-level employees from their annual crop of interns. Thus, securing an internship can help you get a job as an investment banker.
If you want to know how to become an investment banker at Goldman Sachs, consider applying for a summer internship in this investment bank in your 2nd-last year of a relevant bachelor's degree or at any stage of your master's degree. The best-performing students may receive full-time jobs upon completion of the training.
In addition to Goldman Sachs, many other top banking institutions offer internships during the summer holidays, such as Macquarie Group Limited, CBA, Morgan Stanley, J.P. Morgan, Citibank, and UBS. Alternatively, you can search for finance and banking internships.
Step 4: Participate In Events And Network
Networking is a critical aspect of the job, and maybe even more for job seekers in this field. You need to mingle with people and make a good impression on those who have the power to recruit you or recommend you to recruiters.
Building professional connections and staying well-connected with your peers and employers on networks such as LinkedIn may ease your job search. Besides careers guidance, it can help in your career progression.
Attend recruitment events for opportunities to meet with employers in person and learn about the day-to-day work as an investment banker.
Another way to expand your professional network is to reach out to the school alumni network members. By Doing this, you may even get a personal recommendation from somebody already working in the field.
Step 5: Bankify Your Resume
Most bankers glance at an applicant’s resume for a few seconds to look for:
Name and reputation of your Business School or University
Work experience: Internships or Volunteered projects
Past Corporate Experience: Companies you worked at and the positions and roles at those companies
Thus, create a resume that highlights the above data. Also, make it job-specific by mentioning skills, strengths, and activities that give you a competitive edge.
9. How Long Does It Take To Become An Investment Banker?
You can become an Investment Banker by completing an undergraduate degree in business, accounting, economics, or management. The ideal duration of this qualification is three years. With good grades and experience through internships, you can directly apply for a job in an investment bank.
The Sydney Business school is among the top places to study banking and prepare for an IB career. The school offers the following undergraduate banking courses to develop a sound understanding of banking and finance.
Bachelor of Commerce
Bachelor of Commerce and Bachelor of Laws
Bachelor of Commerce and Bachelor of Advanced Studies
Bachelor of Engineering Honours and Bachelor of Commerce
Bachelor of Advanced Computing and Bachelor of Commerce
The course covers the following:
Working on banking systems
How to analyze the banking activities
Roles and regulations of investment and commercial banks
Ways to analyze factors to identify the best investment strategy
Those interested to advance their learning can also study postgraduate courses such as:
Master of Commerce, 1.5 years full time
Master of Commerce (Extension), 2 years full time
Graduate Certificate in Commerce, 0.5 years full time
Graduate Diploma in Commerce, 1-year full time
10. Pathways To Get Into Investment Banking In Australia
There are four main ways to enter the investment banking industry. Regardless of the pathway you choose, your leadership experience and work showing dedication and interest help you succeed in this profession.
As an Undergraduate at a Top University
This is the easiest way to get into the investment banking industry. You will need work experience in the form of relevant internships and start networking with bankers before you get calls for interviews.
Your preparation for investment banking must start in the 1st or 2nd year of your degree. Because, to get recruited for 3rd-year internships, you need to start preparing for it in your 2nd year. Look for internships in smaller private equity firms, Venture Capital firms, start-ups, hedge funds etc.
The 3rd-year internships generally lead to full-time roles after graduation. If you start late, it doesn’t mean that you can’t become an investment banker. There are higher chances that you can end up in a non-IB role or at a smaller bank.
The best way to get a role as an investment banker is to get an undergrad degree at a top university and start preparing in your 1st year by learning to account, networking with bankers, financial modelling, and valuation.
Complete a relevant internship during the school year and continue networking into Year 2 to get recruited in IB positions in large banks.
As a Recent Graduate
Many employers recruit graduates to work in corporate finance or banking and then take their careers to the next level. Getting an IB role right after graduation depends on the market conditions and the type of your full-time job.
You should act quickly and get into an accounting job and move to a valuation role within 1-2 years of graduation.
The longer you wait after graduation, the smaller are chances to enter the job market. After 3+ years since you have graduated, studying for a top MBA degree becomes essential for making a move in the investment banking industry.
The ideal route to getting an investment banking role is to:
Complete internships during your studies
Get a relevant role right after your graduation
Start preparing for interviews 6-12 months in advance
At the MBA Level
If you are a graduate with no investment banking or finance work experience, completing an MBA qualification at a reputed university will give you a chance to win an IB offer. Make efforts and start building professional networks long in advance.
The 3-5 years MBA degree program gives you full-time experience in a specific industry, such as retail, healthcare, technology, and energy.
11. How To Become An Investment Banker Without A Degree?
It is vital to know the finance language to pass the recruitment process and get selected for a role. To build your financial knowledge, you must start taking courses in finance or economics.
Do relevant internships with a reputable company or volunteer on related projects to gain valuable work experience. To further enhance your learning and improve your resume, you can complete a Chartered Financial Analyst program.
To earn a CFA qualification, candidates need to go through rigorous exams that assess their theory and practical financial knowledge.
12. Top Investment Banks in Australia
Australia has a vast Investment Banking market that heavily draws upon clients from all parts of the world.
Here is the complete list of the top Investment Banks in the country:
1. Macquarie Group Limited
3. Credit Suisse
4. Citibank Australia
5. J.P. Morgan Australia Limited
6. The Goldman Sachs Group, Inc
7. National Australia Bank Limited
8. Bank of America Merrill Lynch
10. Morgan Stanley
Top Australian Boutique Investment Banks:
Bulge Bracket Investment Banks
Middle Market Investment Banks
13. Recruitment Process For Investment Bankers In Australia
Australia shows promising growth in the investment banking industry. Many leading investment banks have recognized the country’s potential and begun exploring the emerging Australian market. Macquarie Group, with six offices, is leading in the Australian investment banking market.
Youth in Australia are very positive about their investment banking career. Optimistic job outlook and prospects and ample scope of career progression make it worth pursuing. Students and other professionals prepare and give interviews to enter this growing industry every year.
Generally, people who apply for IB positions are averagely older with a solid finance background and a long career in financial institutions like boutique banks. Due to these reasons, the interview process for IB jobs is stricter than in other countries like the USA, UK, and Europe.
To work as an Investment Banker in Australia, you need to pass the following recruitment process stages:
Online test: Students have to pass a rigorous online screening test on both verbal and quantitative subjects.
Case study presentation: This is another difficult screening round to find competent candidates. Shortlisted students will have to prepare a case study on a real-time transaction or hypothetical situation within a limited timeframe. They then have to present the same in front of the panel of interviewers.
Series of interviews: This is the final round of selection wherein the shortlisted candidates will further need to take a series of interviews.
All these steps help employers get the most deserving candidates from the large pool of job applicants.
14. Exit Opportunities For Investment Bankers in Australia
For IB professionals in Australia, an exit or career change is not occurring very often. Those working in investment banking may look for changing jobs by switching to a larger bank, but rarely do they exit from the profession.
Even if an investment banker changes jobs into hedge funds or private equity, they may do it for more stability and better pay, but not because they don’t like the investment banking job or want to explore other related segments.
Moving out of the Australian market into the Europe or USA market is no good either. The experience you gained in the Australian investment banking market is not fully recognised in the investment banking industry in the USA or Europe. Thus, you will need to start all over again. It is not a wise thing that you would want to do.
However, if you still want to leave investment banking, the most common destinations are:
Corporate development or corporate finance in industrial companies or at natural resource companies like Goldman Sachs.
Infrastructure or Real estate investment funds.
Moving interstate or overseas locations like US or UK to pursue other opportunities like hedge funds or private equity.
15. What Are The Best Places To Work As An IB In Australia?
If you plan to move into the Investment Banking industry in Australia, you must identify the centres that offer the best work opportunities. Sydney, Melbourne, and Perth are the three main cities where Investment banks are located. Large deals are typically handled by staff from these cities.
Comparing the cities based on the work environment, we have found that Perth has a more laid-back work culture and the work hours are better than in other cities.
Due to smaller deals and smaller team sizes, IB professionals in Perth often work with senior bankers like Executive Directors directly. However, this is not the same in Sydney or Melbourne, where Analysts work closely with Associates or VPs in their investment banking careers.
16. Work Environment of Investment Bankers
Since investment bankers' decisions substantially impact their clients, Investment bankers often work in environments that expect fast work execution. Working under high-pressure, tight deadlines, long hours, and high stakes form part of their daily work life. These bankers generally work 50 hours a week or more.
Due to the relatively small Investment banking market, Investment bankers work on focused projects. They may lead teams, departments, and even investment bank branches/organizations. Those working in areas of foreign exchange and commodities might require working irregular hours.
Investment bankers may travel to different sites to attend committee meetings and conferences with managers, board members, and clients. With only 10% of professionals being female, investment banking in Australia presents good career opportunities for male candidates.
17. Types Of Jobs Within An Investment Banking Domain
Investment banking is a vast domain in Australia. Top-notch investment banks provide different types of financial and banking services to their customers.
As an investment banker, you can choose to offer any of these services to your clients:
Corporate Finance services
The service deals with making investment banking and capital investment decisions through short-term and long-term financial planning. An investment banker determines the right balance between debt, securities, and equity to maximize profitability.
Under this domain, IB experts provide several asset management and finance solutions to clients in technology, mining, rail, aircraft, energy/resources, commodities, and other sectors.
Australian investment bankers work with several teams and implement over 100 strategies to handle Australian assets, drive global demand, and outgrow customers’ expectations.
Mergers and Acquisition
Investment bankers who offer this service work as an advisor to enable the valuation, organization, and negotiations of the deal. This is one of the highest-paying services for an investment banker throughout the globe.
In this service, investment bankers thoroughly understand the capital market and its volatility and advise clients on the suitable time and valuation to issue funds in the equity and debt market.
Sales and Trading
It is among the most desirable and fastest growing investment banking profiles worldwide. Here, these professionals are responsible to execute transactions in currencies, equities, bonds, etc. with other traders, and institutional investors.
Trading and Hedging
Australian investment bankers help customers with technical and fundamental analysis and market research. They also offer them 24-hours access to global market conditions, global trading, and price-making solutions.
Equity And Debt Research
Investment bankers have expertise in areas related to consumer, environment, demographics, energy, renewables, utilities, materials, and telecom sectors. They use their expertise along with thoughtful processes to understand a company from several perspectives to allow the banks to transcend every limitation.
Other services offered by an investment banker include public finance, project finance, and financial restructuring.
18. Where Does An Investment Banker Work?
Investment Banking represents a significant industry in Australia. IB graduates can find many employment opportunities, including highly rewarding careers in the following areas:
Financial industry regulation
Based on the investment banker Seek data, the most common job roles for Investment Bankers in Australia are:
Junior Investment Analyst
Graduate Investment Banking Analyst
Investment Banking Associate
Investment Associate (Renewable Energy)
Solicitor/ Associate – Corporate and M&A
Senior Associate – Corporate and M&A
Senior Associate – (Boutique M&A)
Analyst/Associate – Infrastructure Investor
Treasury Operations Analyst – Investment Banking
Global IB - Metals and Mining Associate
Equity Research Analyst – Energy and Resources
19. Investment Banking Career Path in Australia
Investment Bankers generally land a role as Junior Analysts in a company. Consistent performance can help them quickly climb the hierarchy in this profession.
By gaining at least 2 to 3 years of experience and expertise, they can advance to senior roles with their current employer or a different investment bank in corporate finance, private equity, hedge funds, venture capital, and equity research.
Though senior roles require greater responsibility, they also have more lucrative salaries than junior positions. Here is the career progression for an investment banker in Australia:
20. How Much Does An Investment Banker Earn In Australia?
The experience, education, location, employer, performance-based bonuses, and profit-sharing can substantially influence the annual investment banker salary. The size of the bonus depends on the trading income, commission amount, asset management underwriting, and advisory fees the investment banker brings into the bank.
According to Payscale, the average investment banker salary in Australia is AU$92,081 per year or hourly equivalent to AU$30.50.
As an entry-level employee, your salary is based on industry norms that will increase with experience. The more experience you have, the greater your chances to earn more money.
Entry-level Investment Bankers (<1-year experience) earn an average annual pay of AU$77,769
Early career Investment Bankers (1 to 4 years of experience) earn AU$90,000
Mid-career Investment Bankers with (5 to 9 years of experience) earn AU$115,000
Experienced Investment Bankers with (10 to 19 years of experience) earn AU$120,000
Salary based on Location:
An investment banker’s salary in Sydney, NSW is AU$100,704
Perth, Western Australia: AU$89,497
Investment Banking is a lucrative profession where entry-level professionals make six-figure salaries. Getting to the top of your career is a multi-step process involving a combination of ambition, hard work, education, skills, experience, and networking.
So, if you are interested in becoming an investment banker, follow the above steps and build up your experience and professional network to find the right opportunity.
Useful Links to Explore: