What investment banking actually requires
Investment banking is not a single job—it is a set of roles in firms that help companies and governments raise money, buy and sell each other, and manage large financial transactions. To work as an investment banker, you need a bachelor's degree (usually in finance, economics, or business), entry-level work experience in finance or banking, and often a professional certification. Most people start as analysts or associates right out of college, then move into senior roles after three to five years.
The path is more structured than many careers: firms hire from specific schools and through specific recruiting windows, they expect you to sit for licensing exams, and they promote on a timeline. This means your choices at age 20 affect your options at 25. Understanding the sequence matters more than understanding the concept.
Key Takeaways
- A bachelor's degree in finance, economics, business, or mathematics is the standard entry point; most large firms recruit only from four-year universities.
- You will need to pass the Series 7 and Series 63 licensing exams (or Series 79 for some roles) before you can legally execute trades or give investment advice.
- Investment banking firms hire analysts and associates through campus recruiting in the fall, so internships during college are the most direct route to an offer.
- Entry-level pay is high ($80,000 to $120,000 base salary plus bonus), but the job involves 60 to 80 hour weeks and frequent travel.
- Lateral entry from other finance roles (equity research, corporate finance, accounting) is possible but slower than the direct college-to-analyst pipeline.
The degree and major you need
Investment banks hire almost exclusively from four-year universities, not community colleges or online programs. They recruit from a tiered list: top-tier firms (Goldman Sachs, Morgan Stanley, JPMorgan Chase) focus on Ivy League schools and a handful of large state universities; mid-tier firms cast a wider net; smaller regional banks and boutique firms are more flexible about school prestige.
Your major matters less than your school and your grades. Finance, economics, business administration, and mathematics are the most common paths, but physics, engineering, and computer science graduates also enter investment banking—especially in technology-focused roles. What matters is that you took quantitative courses (calculus, statistics, accounting) and maintained a GPA above 3.5 if you are targeting a top firm.
You do not need an MBA to start as an analyst. Most analysts are hired straight from undergraduate programs. An MBA becomes relevant later, after you have worked for two to three years and want to move into management or switch to private equity or hedge funds.
Internships during college are your main entry point
Investment banks hire most of their full-time analysts from their summer internship programs. These internships run for 10 to 12 weeks between your junior and senior year of college. If you perform well, you receive a return offer—a may provide job starting after graduation. Without an internship, you can still land an analyst role, but you are competing against hundreds of candidates who already have the experience and the firm's endorsement.
Recruiting for summer internships happens in the fall of your junior year. Firms visit campuses, hold information sessions, and accept applications through their websites or through recruiting platforms like Handshake. You will need a resume, a cover letter, and often you will interview with current analysts or junior associates. The process is competitive: a large firm might receive 5,000 applications for 50 internship spots.
If your school is not on a firm's target list, you can still apply online, but your chances are lower. Some students attend recruiting events at nearby target schools or use alumni networks to get introductions to current employees. A referral from someone inside the firm significantly improves your odds.
Licensing exams you must pass
Before you can execute trades or advise clients on securities, you must pass licensing exams administered by FINRA (the Financial Industry Regulatory Authority). The specific exams depend on your role, but most investment bankers need at least two:
- Series 7 (General Securities Representative Exam): Tests knowledge of stocks, bonds, options, and mutual funds. Required for most roles that involve client contact or trading.
- Series 63 (Uniform Securities Agent State Law Exam): Tests knowledge of state securities laws. Required in most states if you hold a Series 7.
- Series 79 (Investment Banker Representative Exam): Tests knowledge specific to investment banking—mergers, acquisitions, underwriting, and corporate finance. Some firms require this instead of or in addition to the Series 7.
Your employer pays for exam fees and study materials. Most firms give you three to six months to pass after you are hired. You study using prep books, online courses, or live review classes. The exams are multiple choice and take three to four hours. Pass rates are typically 70 to 80 percent for first-time test takers who study seriously.
How the analyst-to-associate promotion works
Investment banking has a defined career ladder. You start as an analyst (two to three years), then move to associate (two to three years), then to vice president, and eventually to managing director. Promotion from analyst to associate is usually automatic if you perform adequately and your firm is growing. You do not reapply or compete for the role—it happens on a schedule.
The analyst role involves building financial models, creating pitch books and presentations, conducting research, and supporting senior bankers on deals. You work long hours but have limited client contact. The associate role involves more client interaction, leading smaller deals, and mentoring analysts. Pay increases significantly at each level: analysts earn $80,000 to $120,000 base plus a bonus (often 50 to 100 percent of base); associates earn $150,000 to $250,000 base plus a larger bonus.
If you want to move into private equity, hedge funds, or corporate finance roles, the time to do it is after three to five years as an analyst or associate. Many firms actively recruit from investment banks because the training is rigorous and the work is similar.
Lateral entry if you did not start as an analyst
If you did not land an internship or analyst role out of college, you can still enter investment banking through other finance roles. Equity research analysts, corporate finance professionals, accountants at Big Four firms, and commercial bankers sometimes move into investment banking. This path is slower—you typically spend two to four years in the other role first—but it is possible.
The advantage of lateral entry is that you bring domain knowledge and a track record. The disadvantage is that you are older and competing against younger candidates who have already done the analyst training. You will likely start as an associate rather than an analyst, which means higher pay but also higher expectations.
To make a lateral move, you need to build a network in investment banking (attend industry events, connect with recruiters, reach out to people on LinkedIn), demonstrate that you understand the work, and show that you have the quantitative and communication skills the job requires. Some firms have formal lateral hiring programs; others hire case-by-case.
Skills and traits that matter most
Investment banking rewards attention to detail, the ability to work under pressure, and comfort with numbers. You spend hours building spreadsheets, checking calculations, and catching errors in documents. You work on tight deadlines—a pitch book might need to be finished overnight, or a model might need to be updated while you are presenting to a client. You need to stay calm and focused when things go wrong.
Communication matters as much as technical skill. You will write memos, create presentations, and eventually present to clients. You need to explain complex financial concepts clearly and persuade people to take action. This means good writing, good speaking, and the ability to listen and ask the right questions.
Finally, investment banking is a relationship business. You need to build trust with colleagues, clients, and senior bankers. This means showing up on time, following through on commitments, and being someone people want to work with. Personality and reliability matter as much as raw intelligence.
Frequently Asked Questions
Do I need to go to an Ivy League school to become an investment banker?
No, but it helps. Top-tier firms recruit heavily from Ivy League schools and a few large state universities like Michigan and Texas. Mid-tier and smaller firms hire from a broader range of schools. If your school is not on a firm's target list, you can still apply online or use alumni connections, but your odds are lower. Strong grades, relevant internships, and a referral improve your chances at any school.
What if I did not do an internship in college?
You can still land an analyst role, but you are competing against hundreds of candidates who did internships. Your best options are to apply to smaller or regional firms, to use alumni networks to get introductions, or to work in another finance role for a few years and then move into investment banking as a lateral hire.
How long does it take to become a managing director?
The typical path is analyst (two to three years), associate (two to three years), vice president (three to five years), senior vice president (two to three years), and managing director (five to ten years). So from analyst to managing director is roughly 12 to 25 years, depending on the firm and your performance. Many people leave investment banking before reaching managing director to move into private equity, hedge funds, or corporate roles.
Can I work part-time or remote as an investment banker?
No. Investment banking requires long hours (60 to 80 per week is standard) and in-person presence. You need to be in the office or with clients to build relationships, attend meetings, and respond to urgent requests. Remote work is not standard in this industry, especially for analysts and associates.
What is the difference between investment banking and commercial banking?
Commercial banking involves lending money to businesses and individuals—you manage accounts, approve loans, and handle deposits. Investment banking involves helping clients raise money, buy and sell companies, and manage securities. Investment banking pays more, has longer hours, and is more deal-focused. Commercial banking is more relationship-focused and has more regular hours. They are different career paths that require different skills.