Sunday, December 30, 2012

Principles for Excelling in Investment Banking

Relationships are Everything. Banking products, like equity, debt and advice, are essentially commodities. What separates one bank from another is the relationships its bankers have built with their clients. Investment banking is a relationship business, where credibility and golf ties make all the difference. At every level, the most respected bankers will be those that have established credibility with their clients.

Don't Lose the Forest for the Trees. Relationships are qualitative. Numbers, though, are the foundation of the advice and recommendations that investment banks provide their clients. Associates and analysts frequently get so carried away with simply finding & collating digits that they forget to check for obvious errors. Computational accuracy is critical to establishing a good reputation as a junior banker.

Deals Count. Getting deals done puts experience on your resume and in your bank's pitchbooks. It also familiarizes you with the processes banks go through to get their product offering to market. Your banking career will be best served by staying close to the deals, and that means aligning yourself with groups and individuals who seem to be deal centers.

Commitment is Critical. Banking is cyclical, and even on specific deals there are bound to be highs and lows. Bankers sometimes get yelled at by clients or snubbed publicly; and junior bankers sometimes find themselves in over their heads with huge deadlines looming. Banks go through bad bonus years. To a greater degree than with other professions, a certain amount of your banking success is dependent on your ability to stick with it through the bad times.

Transition with Care. Moving to another investment bank is an institutionalized practice, with many senior bankers having worked at two to three banks, and sometimes more. There are three good reasons to move: (1) more money, particularly with a guarantee, (2) more reputable bank, or (3) a better fit in terms of industry focus or geographies covered. While these are all good reasons, bankers should take care not to switch too often as frequent moves between banks is not well regarded in the industry.

Investment banking is a challenging career that's well suited for confident, well-prepared people at the top of their game. With these tips, you will be prepared to stay ahead of the pack and deliver enduring value to your employer while earning an excellent living yourself.