Investment Banking & Asset Management sector profile

• Different areas of investment banking and asset management
• Typical roles in investment banking and asset management
• Skills and qualifications
• Salaries
• Key employers
• The application process
• Investment banking and asset management sector graduate jobs and schemes
• More information

If you have a keen eye for detail and thrive under pressure, then you may find a career in investment banking and asset management is for you. Whether it’s working on multi-billion-pound deals with top corporate clients or making live trades on the stock exchange, there are many exciting jobs to be found in this sector.

Interested in a career in investment banking and asset management? Browse available investment banking opportunities and asset management opportunities and take your first step towards a career in this rewarding sector.

Different areas of the investment banking and asset management sector 

Investment banking

Investment banks are made up of many divisions, one of which is the investment banking division (IBD). Investment bankers are responsible for researching companies that are in the process of being bought or sold. They conduct every aspect of the transaction – from evaluating company performance and estimating future worth, to pitching new ideas for investments based on their own research. Investment banks can preside over multi-billion-pound transactions and take a percentage cut of the final sale price.

Private equity

Private equity firms specialise in raising funds for already-established firms. They seek investment from institutions like insurance companies to buy firms, improve their performance, and then sell them at a profit for themselves and their investors.

Traditionally, private equity firms have only recruited those with relevant prior experience, ideally as investment banking analysts or associates. However, some merchant banks have recently started offering internship opportunities to students and recent graduates who are specifically interested in private equity.

Asset and investment management

Asset and investment management involves increasing the size of a client’s investment portfolio by executing trades and diversifying it to offset risk. Asset managers analyse financial markets and invest their clients’ funds based on what they think will deliver the best returns. Clients of investment and asset managers can include pension funds, other institutions, or high-net-worth (HNW) individuals.  

Learn more about the different roles available in asset and investment management.

Trading

Trading (often incorporating sales) is another division within an investment bank. Traders research trends in financial markets and either buy or sell financial products on behalf of the bank’s clients with the aim of returning a profit. A trader buys or sells depending on what the seller tells them, so the two divisions are often combined into one. The price of financial products is constantly fluctuating, so trading requires patience, a passion for financial markets, and the ability to manage risk.

Typical roles in the investment banking and asset management sector

Investment banker

Those who work in the investment banking division (IBD) of an investment bank are called investment bankers. Most bankers start their career at analyst level, although some people with prior experience in accounting or consultancy can come in as associates. Junior investment bankers divide their time between analysing the performance of markets and companies and advising clients of potential targets for investment. More senior bankers take a lead role in negotiating deals that involve the buying and selling of large companies, which is known as mergers and acquisitions (M&A).

As you progress in your career, you will have the opportunity to take on more client-facing responsibilities, build your own networks with company leaders, and manage teams of junior employees. Due to the extremely competitive nature of investment banking, as well as the combination of numerical and client-facing skills they develop, investment banking analysts are highly prized in other industries. Private equity is known for almost exclusively recruiting former investment bankers, many of whom also choose to go into consulting.

Trader

Traders work together with salespeople to buy and sell financial products for a profit on behalf of the bank’s customers. These products include stocks, bonds, currencies and commodities. While salespeople advise clients when to buy and sell, traders analyse market trends in real-time and are the ones who actually execute the trades. Traders are passionate about financial markets and find it exciting to take responsibility for risky decisions.

Strategist

As a strategist, you research and write reports on the wider economic events that may impact your clients’ trading and investment strategies. These may include elections, large corporate deals, and announcements from the central bank. This can be a great role for someone who is as interested in the political forces behind the numbers as in the numbers themselves.

Skills and qualifications

Hard Skills

• Financial modelling. When valuing a company, you may be asked to build a financial model that forecasts its future performance. This is typically done in Microsoft Excel. If you have never done financial modelling before, there are several accredited qualifications available that can teach you the required methodologies. Learn more about valuation methodologies you need to know. 
• Mathematics. While a good grasp of basic algebra is enough for most non-technical roles, a strong mathematical background can help you stand out during the application process and perform the quick mental calculations that this sector involves.

Soft Skills

• Networking. Most roles in investment banking and asset management are client-facing, so interpersonal communication is one of the most highly regarded skills in the industry. You can learn more about how to build professional relationships with this Bright Network Academy course on effective networking. 
• Presentation. Investment bankers and asset managers regularly make presentations to clients and internal stakeholders in order to persuade them to invest in a company or product. Often these can be in front of large groups of senior colleagues and corporate managers. Perfect your presentation skills with this Bright Network Academy course on developing effective presentation skills.
• Resilience. Jobs in this sector are extremely sought-after and many of the junior roles can involve long work hours during busy periods. The ability to stay motivated under pressure can be useful during both the application process and the job itself. Learn more about resilience and taking feedback with this Bright Network Academy course.
• Analytical skills. While the maths involved in these roles is quite basic, you may often find yourself working with large data sets when building financial models or analysing market trends, as well as reading research reports and articles. Therefore, being comfortable with both qualitative and quantitative analysis is highly desirable for working in this sector.

Qualifications

Most roles in investment banking and asset management require you to have an undergraduate degree. While business and finance graduates may be more familiar with some of the concepts involved, most investment banks accept any degree subject. More important is the ability to demonstrate an interest in financial markets, as well as some basic numerical skills.

There are many well-respected certifications that can help you brush up on your technical skills and learn more about the day-to-day work you’ll do as an investment banker or asset manager. The most highly regarded of these is the Chartered Financial Analyst (CFA) qualification, which takes several years to fully complete. An increasingly popular alternative is the Financial Modelling and Valuation Analyst (FMVA) certificate by the Chartered Financial Institute (CFI). These both teach essential financial modelling skills, which are vital to the valuation of companies within the investment sector. 

For those new to asset management, there is also the Institute of Asset Management (IAM) certificate, which teaches risk assessment, strategy, and financial planning.

You can enrol in any of these courses yourself or your employer may pay for you to take them. Find out more about professional certifications for investment banking and asset management.

Salaries

The investment banking and asset management sector is known for being one of the highest-paid in the world. 

Investment banking salaries can vary dramatically depending on your role, the firm you work for, your experience, and your level of seniority. Larger firms and client-facing roles typically pay much more than smaller firms or ‘back-office positions. End-of-year bonuses can exceed your salary and there are many incentive schemes designed to incentivise top performers.

Compensation for asset managers depends on the total number of assets they have under management (AUM), as well as your role and firm. You are incentivised to grow your client’s portfolio, as this leads to you receiving a higher fee. 

Here is what you can expect to earn in this sector:

Investment banking

As an entry-level investment banking analyst, you can expect to earn between £50,000 and £60,000 per year, with a potential bonus of up to 100% of your yearly salary. The rate of bonus compensation remains relatively constant as you progress through the bank.

An investment banking associate can earn an average of £90,000 before bonuses.

Investment banking vice presidents earn an average of £140,000 before bonuses.

The yearly salary for a managing director (MD) of an investment bank can fall anywhere between £150,000 to over £400,000. Your total earnings can be heavily affected by your performance, but well-performing MDs can earn around £1,000,000 per year.           

Asset and investment management

As a junior-level financial analyst, you can expect to make anywhere from £25,000 to over £40,000 per year. As you advance to mid and upper-level, this can increase to over £70,000 at some firms, especially when dealing with highly profitable asset classes.

An asset manager or a portfolio manager earns an average salary of between £50,000 and £80,000 per year, although this will vary wildly based on the performance of their assets under management (AUM), as well as their level of responsibility. This does not include a bonus, which may exceed the yearly salary. 

Senior managers and directors at top asset management firms can earn an average salary of between £100,000 and £150,000, not including a bonus. As with investment banking, there are additional remuneration schemes at higher levels of seniority. 

Key employers

Key graduate employers in this sector include:

• Goldman Sachs
• Morgan Stanley
• J.P. Morgan
• Lloyds Banking Group
• BlackRock
• HSBC
• Barclays
• UBS
• Aviva

The application process

CVs and cover letters

The first stage of the application process for roles in investment banking and asset management is filling out an online application form, which may include an option for submitting a one-page CV with your work experience, and a tailored cover letter that explains your interest in the role. Take this Bright Network Academy module on how to create a stand out CV.

Psychometric tests

After you submit your application, you may be invited to complete a series of online psychometric tests. These may test a number of your skills including numerical reasoning, inductive and deductive logic, and situational judgement. Some of these are timed and require effective time management to achieve a high enough score to pass through to the next stage of the application. You can often practice these tests without timed conditions before attempting them for real. Learn more about psychometric tests. 

Telephone/video interviews

Upon passing the online tests, you may be invited for a telephone or video interview with a member of the recruitment team. These will usually not be investment bankers or asset managers themselves. The interviews may be strength or competency-based, but will always question why you are interested in the role and company, and why you would make a good fit. Many firms now ask you to pre-record yourself answering questions within a time limit using platforms such as HireVue. Find out more about tackling phone and video interviews. 

Assessment centres

The final stage of most applications is to attend an assessment centre. This may be a full- or half-day consisting of additional tests, group presentations, and face-to-face interviews with members of your chosen division. You may find yourself being asked similar questions to your telephone interview, but this time you will be talking to specialists in investment banking or asset management, so it is important to research the role thoroughly. Learn more about acing your assessment centre. 

There is no ‘standard’ application process for roles in investment banking and asset management, so it is worth preparing yourself for all of these stages.

Investment banking and asset management sector graduate jobs and schemes

More information

If you’d like to find out more about investment banking and asset management, then watch our Bright Network Academy Sector 101s on investment banking and asset management, led by Macquarie.

You can also read success stories from Bright Network Alumni who got into investment banking and asset management for tips and inspiration.