What jobs an investment bank will give you a chance to become wealthy?I get the impression that there are many areas that don't pay the massive amounts we hear about in the media e.g. operations, technology, human resources, finance (accounting). So what are the various jobs at an investment bank that will give you the chance to actually become rich? Also what are the... | |
Hi Al
Your impression is correct. Jobs in investment banks can be split into front, middle and back office roles, with a separate 'support' category for things like IT and HR. The opportunities to make big bucks (no guarantees, of course) are in the front office roles, specifically Sales, Trading and the Investment Banking Division (IBD). Research is also a front office role, but since 10 or so years ago it has suffered relative to the others in terms of compensation, for some specific reasons.
The challenges are a significant factor in the size of pay packets, and vary by function. Traders need to be comfortable taking calculated risks, function well under pressure and be experts in their market (before I was allowed to trade, I spent many months just learning the product and market). Salespeople need excellent interpersonal and communication skills and a broad understanding of financial markets, and if covering a particular region they will nearly always be native speakers of the relevant language(s). IBD, at a junior level at least, is a huge test of stamina, due to the extreme hours worked in that area. They too need strong analytical and relationship skills.
So to your point about trading, it is not simply executing trades for clients, it is about managing risk. Some traders are proprietary (‘prop’) traders, who speculate with the bank’s own capital, but the majority are market makers. The latter provide liquidity to clients and sometimes to the broader market. They typically take the other side of client trades and then attempt to hedge their book in the most cost- and risk effective manner.
As a couple of the other posters alluded to, you can also cut the cake by corporate title, which basically means your 'rank'. From bottom to top these are Analyst, Associate, Vice President, Senior Vice President and Managing Director (many of these will vary depending on the bank), followed by senior management positions like CEO and CFO.
Best regards
Stan
in its simplest form, it is gentrified gambling
where the rules are created and manipulated by the establishment, to such an extent the regulators are baffled
for you to win, someone must lose
the money tree is a myth
CEO, CFO, Trader, analyst.
Managing Directors do very, very well.
