Complete Guide: How Much Does an Investment Banker Make?
By Indeed Editorial Team
Updated 21 October 2022
Published 30 August 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
If you're interested in finance, a career in investment banking can offer you above-average pay. Investment bankers use their expertise in data analysis, statistics and markets to manage and grow the financial assets of their clients. Knowing the duties of an investment banker and how much they get paid can help you determine if this is the right career for you. In this article, we discuss the roles of investment bankers, address how much does an investment banker make and how to increase your earnings.
How much does an investment banker make?
The average salary of an investment banker is £33,623 per year. Salaries are often higher in large metropolitan areas, like London, and specifically when employed at investment banks. Bonuses are also possible as an investment analyst and can vary your overall income total.
Related: How To Become an Investment Banker
Highest paying cities in the UK for investment bankers
Here are the cities with the highest salaries for investment bankers:
London: £60,795 per year
Cambridge: £25,502 per year
Tamworth: £18,891 per year
Derby: £19,697 per year
What kind of bonuses an investment banker receives?
Here are the types of bonuses investment bankers may receive besides their base salary:
1. Stub bonuses
Since most investment bankers graduate from university in the middle of the year, they also tend to start working around that time. They receive stub bonuses at the end of the year, usually six months after starting the job. This bonus consists of a percentage of the first year's base salary.
2. End of the year bonus
Investment bankers receive an end-year bonus after their first year of work in a company. This bonus depends on your performance, ranking level, base salary, deal flow, and the size of the financial institution. In most companies, you may receive the exclusive bonus as cash, while in some companies, depending on your ranking, it's converted to stock.
3. Signing bonus
This is a bonus given to investment bankers and analysts who work on a full-time basis. It's used to motivate investment bankers when they move from one company to another. It varies depending on your role, the size of the institution and your experience.
What is an investment banker?
An investment banker provides financial services to individuals, governments and companies to raise funds via bonds, stock, loans and capital funding. They are the link between companies and investors, evaluating financial transactions and market activities. They also advise their clients on financial decisions such as mergers and acquisitions.
What does an investment banker do?
The main role of investment bankers is to raise money for their clients. There are companies where you may specialise in one service, such as giving financial advice, while there are those where you may perform various tasks. However, regardless of your specialisation, it's your role to build the wealth and portfolio of your clients. Some of the specific roles include:
Conducting research and financial investigations
Guiding and advising on financial transactions such as mergers and acquisition
Preparing financial presentations and documents
Advising clients on investment opportunities
Offering brokerage services
Performing company valuations
Complying with regulatory and legal services
Managing initial public offerings
Determining initial public offering prices
Saving time and money by advising clients on the best way to raise funds
What is working in an investment bank like?
Most investment bankers work in an office setting as part of a team but some travelling may be required. You may have to work long hours, including nights and weekends, depending on transactions, business dealings and your client's time zones. As an investment banker, you may need to deal with tight deadlines and be comfortable working under pressure.
Common investment banking jobs
Here are some of the common investments banking jobs:
National Average Salary: £43,061 per year
Job Duties: the main role of investment analysts is to research and provide all facts to fund managers, traders and stockbrokers to help them make investment decisions. The position is demanding with long working hours and frequent travels. However, the pay is above average depending on where you work. You may work for investment bankers, stockbrokers or individual clients.
National Average Salary: £49,972 per year
Job Duties: an investment manager is a person that makes investment decisions on behalf of their clients. They manage their client's portfolios and help in selling and buying stocks. They also prepare financial presentations and ensure their clients comply with regulatory guidelines.
Related: 10 Essential Finance Manager Skills
National Average Salary: £57,542 per year
Job Duties: the role of a senior investment analyst is like that of an investment analyst. However, as a more experienced professional, you may focus on financial advisory aspects. Senior analysts may supervise analysts and associate investment bankers. Depending on where you work, you may also assist in capital raising, preparing presentations for client engagements, analysing market trends and writing research papers on the collected facts. You may also participate in due diligence meetings.
How can you increase your earnings as an investment banker?
There are various ways in which you can increase your earnings as an investment banker. Some of the ways include:
1. Gain experience
The entry-level salary for an investment banker is low compared to that of junior, mid-level and senior professionals. This means that the more you gain experience, the better your salary may be. With time, you can get a promotion and earn more.
2. Continue learning
Most of the skills and knowledge of investment bankers get acquired from academic qualifications. So, if you've completed your degree, consider enrolling in a masters' program or enrol for any other course in investment banking. That way, your resume can stand out and also you qualify for top-paying positions in your area.
Related: How to Negotiate a Better Salary
3. Consider other opportunities
Investment bankers can work in different financial institutions, both public and private. In some cases, you may also provide services to the government. Each of these working environments requires different specialities and offers different pay. Starting a position in a new company is an opportunity to gain new skills and usually comes with a raise in salary.
4. Ask for a higher salary
You can negotiate for a better salary with your current employer. Use your experience, added qualifications and certifications to convince your employer why you need a better wage. Note that your performance and dedication also determine if you'll get a raise.
Essential skills of an investment banker
To become a successful investment banker, consider improving on the following skills:
Leadership and management skills
Leadership and management skills are essential skills for investment bankers. They come in handy when managing your client's accounts and portfolio, ensuring that you maximise their wealth. These skills can help you get job promotions and also command salary increases. To improve these skills, you can enrol in courses offering leadership and management and take advantage of opportunities that allow you to demonstrate these skills.
Most tasks of an investment banker involve crunching numbers and analysing numerical data. It's crucial that you have numerical skills such as data analysis and accounting to help you analyse financial figures and give advice. Pursuing a degree in finance or other related fields can help you gain essential numerical skills for investment banking.
Investment bankers often prepare and present financial proposals and documents to their colleagues and superiors. Excellent communication skills can help you explain technical terms to individuals with no finance background easily. Also, you can use this ability to persuade clients and promote a financial service.
Related: What Are Communication Skills?
Interpersonal skills can help you handle challenging situations, work as a team, dealing with other professionals and manage client relationships. It's crucial that you learn how to network and form relationships. These connections can lead to job opportunities and can also help you get more clients for your company.
Resilience is one of the most sought skills in investment banking. The work can be challenging due to the long working hours, high stakes and tight deadlines. Having resilience may help you remain focused even when things get tough. It also allows you to balance your personal and work life.
Please note that none of the companies, institutions or organisations mentioned in this article are affiliated with Indeed. Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.
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