Is a Career in Investment Banking Worth It?

Investment bankers are typically the highest-paid workers in the finance industry. Even younger employees receive high salaries. However, working in this field has its challenges. So you may be wondering: Is a career in investment banking actually worth it?

Key Takeaways

• With investment banking, while the compensation is high, so are the pressures.
• Investment bankers work long hours, and often under time pressure, to close deals.
• Despite the traditional culture of conspicuous work, many investment banks are reassessing workloads and encouraging employees to maintain less stressful schedules.

Investment Banker Work Environment

An investment banker works with companies and government entities that raise capital, and bankers also provide advice regarding mergers, acquisitions, and reorganizations. Traditionally, investment bankers work long hours, sometimes as many as 100 hours per week. Bankers are often under time pressure as many projects have tight deadlines.

Banking culture values and admires people who work long hours, and many firms have a culture of conspicuous work. This term refers to a corporate culture in which each employee notices the hours worked by everyone else, and this situation creates a competition to take on more work at all costs.

Reliable bankers are given more work, and that leads to a work schedule that can become unmanageable. The work environment can take a physical and emotional toll on people who work in the industry.

Changes in the Industry

In 2015, two young investment bankers died by suicide. Shortly before their deaths, both workers suffered from lack of sleep, and they reached out to family members to explain how much they were working.

Those tragedies led many firms to change their company policy on work hours. Some firms now enforce a protected weekend policy, which means that bankers cannot work on specific weekends. Nearly all companies now ask workers to say no to additional work if that work will result in too many hours at the office.

In addition, recent studies have shown that overwork leaves bankers less productive, which means that more hours are not generating the same level of quality work. A common rule of thumb is that a banker should not work on more than two banking deals at one time, or the workload is not manageable.

$87,843

The typical base starting salary of an investment banker, not counting signing or performance bonuses.

Traits of Successful Bankers

Finance professionals should consider whether they have the personal traits needed to succeed in investment banking. In addition to the potential for long hours, a banker must be able to handle stress well and work on multiple deadlines at once.

Investment bankers must be able to initiate projects on their own and manage time well. Financial modeling and the use of Microsoft Excel are important, as well.

What Are the Alternatives to Investment Banking?

Investing banking firms traditionally hire new associates from the best Master’s of Business Administration (MBA) programs in the country. But many of these students are no longer considering banking as a career. Elite MBA programs, such as Harvard Business School, are seeing more graduates moving into tech startups and other fields, such as private equity and corporate finance.

This shift has also pushed banking firms to assess the number of hours each banker works, and to weigh whether those hours are justified, given client demands.

Other alternative career paths to investment banking can include asset management, corporate finance, and equity research.

Do Investment Bankers Get Paid Well?

Yes, the starting salary for the typical investment banker exceeds that of most other finance positions, and certain roles can have salaries in the low seven figures.

Is JP Morgan an Investment Bank?

Yes. JP Morgan Chase’s investment bank was the largest in the world by revenue as of September 2024, followed by Goldman Sachs. From January 2024 to September 2024, JP Morgan Chase made approximately $5.1 billion. In 2023, it was ranked number one in the world by assets. Bank of America was ranked second, and Wells Fargo was ranked third.

The Bottom Line

If you’re not willing to make significant sacrifices for your job—or you’re not primarily driven by money—investment banking may not be for you. But if you’re still excited about the role despite its drawbacks, then put in the hours to understand everything you can investment banking. Your tenacity will likely pay off.