Becoming a chartered investment banking analyst is considered a lucrative career, with the potential for high salaries at top firms. However, obtaining the necessary certifications can be challenging. This article will explore the typical salaries for chartered investment banking analysts, the main certifications required, and the difficulties of qualifying.
Chartered investment banking analysts earn high base salaries plus bonuses
At top bulge bracket investment banks like Goldman Sachs and Morgan Stanley, first-year analysts straight out of undergraduate programs can earn base salaries of $85,000 to $90,000. With bonuses, total compensation packages frequently exceed $100,000. More experienced chartered analysts and associates take home even higher pay, often $150,000 or more in total compensation. However, these lucrative salary packages come with 80+ hour workweeks and intense pressure.
CFA and financial modeling certifications are key for aspiring analysts
The gold standard credential for investment banking analysts is the Chartered Financial Analyst (CFA) designation. Earning a CFA charter signals analytical skill, investment knowledge, and the ability to value complex securities. It requires passing three sequential six-hour exams, and takes most candidates between two and five years to complete while working full-time. Expertise in financial modeling is also essential for aspiring analysts. Certifications like the FMVA demonstrate strong Excel modeling abilities vital for tasks like DCF valuation.
Gaining work experience before certification can boost candidacy
Because of the intense competition for investment banking jobs, certification alone is often not enough. Gaining relevant work experience through internships and junior roles is key for standing out. For example, working for a year or two as a financial analyst at a commercial bank or asset management firm provides domain knowledge and demonstrates aptitude before attempting to break into investment banking.
Business and finance degrees open doors, but high achievement is critical
While banking recruiters consider candidates with various undergraduate backgrounds, degrees in business, economics and finance are preferred, from target schools like Ivy League universities, if possible. However, high academic achievement with GPA above 3.5 and leadership extracurricular activities are essentially required, even for applicants from non-target schools.
In summary, chartered investment banking analysts can earn salaries exceeding $150K, but gaining credentials like the CFA charter and financial modeling expertise is an arduous process. Relevant work experience and a strong academic record in business or finance vastly improve candidacy for these lucrative but intensely demanding roles.