And investment banking refers to a vital non-banking financial sector, which provides services to people, companies, and governments by helping them to raise capital and also offering advice on mergers and acquisitions and other financial transactions. The investment banking industry has transformed since the advent of the 21st century, and in 2025 it presents many career paths as well as challenges.
Investment Banking Core Functions
1. Capital Raising
Essentially, asset bankers help clients obtain the capital they need by underwriting the issuing of securities, like stocks and bonds. Mergers and Acquisitions Advisory (M&A)
2. Mergers and Acquisitions (M&A) Advisory
Investment banks also offer advisory services related to mergers, acquisitions, and corporate restructuring, helping clients undertake complex transactions and enhance their corporate structures. Sales and Trading
3. Sales and Trading
They act as market makers for buying and selling securities and financial instruments while letting clients access the market. Research
4. Research
Investment banks provide clients with real-time data in addition to in-depth, comprehensive analysis on market trends, economic conditions, and specific securities, giving clients information that can help them make wise investing choices.
Investment Banking Career Path and Salary Ranges
A career in investment banking follows a progression of roles, each with different responsibilities and compensation structures. Here’s a rundown of common roles and their corresponding pay ranges:
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Analyst (1-3 Years Experience)
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Base Salary: Approximately $100,000 to $125,000.
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Total Compensation: Ranges from $160,000 to $210,000, including bonuses. Mergers & Inquisitions+1Business Insider+1
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Key Responsibilities: Conducting financial analyses, building financial models, and supporting senior bankers in transaction execution. Financial News London+3Wall Street Oasis+3Salary.com+3
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Associate (3-5 Years Experience)
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Base Salary: Typically between $175,000 and $225,000.
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Total Compensation: Ranges from $275,000 to $475,000, encompassing bonuses. Mergers & Inquisitions
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Key Responsibilities: Managing transaction processes, client communications, and overseeing analysts’ work.
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Vice President (VP) (5-10 Years Experience)
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Base Salary: Generally between $250,000 and $300,000.
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Total Compensation: Ranges from $500,000 to $700,000, including bonuses. 300Hours+1Wall Street Oasis+1
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Key Responsibilities: Leading deal teams, maintaining client relationships, and driving business development efforts. Wall Street Oasis
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Director/Senior Vice President (SVP) (10-15 Years Experience)
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Base Salary: Typically between $300,000 and $350,000.
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Total Compensation: Ranges from $600,000 to $800,000, including bonuses.
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Key Responsibilities: Overseeing multiple transactions, strategic planning, and significant client engagements. Wall Street Oasis
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Managing Director (MD) (15+ Years Experience)
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Base Salary: Ranges from $400,000 to $600,000. Mergers & Inquisitions
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Total Compensation: Can exceed $1,000,000, including bonuses and profit-sharing.
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Key Responsibilities: Setting strategic direction, managing top-tier client relationships, and leading the firm’s investment banking division.
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Note: Salary figures are approximate and can vary based on factors such as geographic location, firm size, and individual performance.
From this guide you will learn essential technical skills for investment banking.
Certain technical skills are essential to success in an investment banking role.
Key competencies of a financial analyst:
- Financial Modeling: Developing models to predict how a business will perform, usually with tools like Excel. Business Development Research: Conducting research regarding applicable strategies to engage clients.
- Market Analysis Tools: Exposure is to platforms like Bloomberg Terminal for real-time market data and analytics.
- Presentation Skills: Excellent pitch books and presentations at client visits
How to Prepare for Investment Banking Interviews
The process to secure an investment banking position can be lengthy, but usually consists of the following stages
- Application Screening: Academic achievements, work experience and extracurricular activities are analyzed.
- Technical Interviews: Financial discussion, modeling skill assessment, and puzzle/problem-solving capabilities.
- Behavioral and technical rounds: Assessing firm fit, soft skills, and the desire to work in investment banking.
Building Connections The Absolute Priority of Investment Banking
Networking is essential for a career in investment banking. As an example, here are a few strategies to building a strong professional network:
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- Attending industry events: Conferences, seminars, and workshops are opportunities to meet people in the industry and learn about trends.
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- Alumni Networks: Connect with university alumni who work in investment banking for mentorship and possible job leads.
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- LinkedIn and Other Professional Platforms: To use for displaying specializations, sharing thoughts and connecting with industry leaders.
Future Trends in Investment Banking
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Technology Integration
The adoption of artificial intelligence and blockchain is transforming deal analysis and client services. Boston Institute of Analytics -
Sustainable Finance
There is a growing emphasis on Environmental, Social, and Governance (ESG) factors in investment decisions. -
Global Expansion
Investment banks are increasingly focusing on emerging markets in Asia, Africa, and Latin America.
Conclusion
Investment banking is a specialized segment of the financial services industry that assists individuals, corporations, and governments in raising capital by underwriting or acting as the client’s agent in the issuance of securities. Additionally, investment banks provide advisory services for mergers and acquisitions (M&A) and other financial transactions.
