Working for an Investment Bank

The objective of an investment bank is the underwriting of new securities that are issued by an investment bank's clients. An investment bank may also provide other services, such as professional advice, working with mergers & acquisitions, and private wealth management. Working for a Investment bank has historically yielded a safe secure career route that attracts high salaries and bonuses for the experiened and mid career person.

For applicants that want to work for an Investment bank it is likely that you will need to know more about the structure of these types of companies; within our overview below we discuss the types of departments, and the roles that peolpe work in at Investment Banks

Typical departments withing an investment bank differ enormously to those of retail banks. A typical breakdown would be:

•    Finance
•    Compliance
•    Investment research
•    Human resources (also known as Human capital management)
•    Investment banking
•    Investment management
•    Legal and management controls
•    Merchant banking
•    Private equity
•    Operations
•    Securities & Trading
•    Services
•    IT & Technology
•    Information Risk Management

The Graduate
Most Investment banks require new blood and take graduates for thier entry roles. Applicants for graduate jobs at Investment Banks in the departments listed above would usually apply for a Analyst or Associate positions as these require little commercial experience and are ideal if your background is mostly academic.

Candidates who have a Bachelors or Masters degree and little or no experience in Investment Banking usually apply for Analyst positions. Candidates with a Masters (MA) in Finance and MBA candidates with a qualifying period of work experience usually apply for Associate positions.

Different type of firms you could work for and Tier 1 & Tier 2

Firms are divided into tier 1 and tier 2 firms. They are called this becuase of the size of the firm. Tiering normally does not apply to specialist smaller investment banks or fund managers.

The Bulge Bracket was a term used up until September 2008 to describe the largest investment banks (in terms of size and in terms of profitability). These were generally regarded to be Goldman Sachs, Morgan Stanley, JPMorgan, Citi, UBS, Credit Suisse, Merrill Lynch and Lehman Brothers.

2008 told an unforseen shift in the definition of what was the Bulge Bracket; The Bank of America acquired Merrill Lynch, The Lehman Brothers disaster, Goldman Sachs & Morgan Stanley converted themselves into traditional bank holding companies. All of these were effects of the world Credit Crisis that was created by the USA Subprime mortgage failures.
Front, middle and back office

It is predicted the invesmtment markets will again resolve and become well worth considering even in the short term for career minded applicants, especially the new blood which are looking for entry positions.

Where would you work? Investment banking roles fit into three areas;

•    Front office
•    Mid office
•    Back office

The Front office is generally described as a revenue generating role.

There are two main areas within front office:

•    Investment Banking
•    Markets, which includes:sales,Trading Research and structuring

Markets are then split into further divisions; sales, trading, some research and also structuring. Middle office roles are normally comprised of risk management positions. (These are effectively cost cutting roles) as the mid office positions involve analysing and evaluating the risk taken by the front office.

Back office roles are areas of operation. Operations employees are responsible for transfers, and generally ensuring there are no errors in what is being performed.

How career paths balance up in terms of financial rewards and prestige

Best Choices in Order - Front Office

•    Investment Banking Division (which includes Mergers & Acquisitions, and Corporate Finance)
•    Equity Capital Markets and Debt Capital Markets 
•    Fixed Income Sales or Equities Sales
•    Fixed Income Trading or Equities Trading 
•    Equities Research or Fixed Income Research
•    Asset Management
•    Private Wealth Management (Stockbroking)
•    Private Equity
•    Management Consulting

Best Choices in order - Mid Office

•    Investment Consulting with the Big Four Investment Consulting firms.
•    Hedge Funds (Working as a Trading Analyst/Research Analyst)
•    IT Consulting
•    Technology Division of an Investment Bank
•    Risk Management
•    Actuarial Consulting
•    Tax Consulting with a leading accounting firm
•    Ratings Agencies
•    Independent Research Firms

Best Choices in order - Back Office

•    Marketing
•    Operations
•    Finance division of an investment bank (focuses on Product Control/ Risk + Treasury Management)
•    Human Resources
•    Compliance
•    Working as a desk assistant  - You could work your way up! 
•    Inter-dealer Broking 
•    Finance division of prestigious multinationals
•    Assurance (same thing as Audit) with a leading accounting firm
•    Tax Compliance with a leading accounting firm
•    Insolvency with a leading accounting firm

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