What is the Hardest Part of Investment Banking?

12-Jan-2023

Investment banking attracts many new graduates as one of the top job options. When you are straight out of business school, the attraction of a six-figure salary in your early 20s and being surrounded by Wall Street culture can be seductive. However, the much-coveted jobs and positions come with their share of hardships and unattractive elements that may turn your dream job into a career that is hard to pursue. Let us consider a few factors that translate into the hardest part of an investment banking career.

Why is Investment Banking Difficult?

hardest part of Investment Banking

The following factors may answer why is Investment banking a stressful job.

Maintaining Work-Life Balance

An entry-level investment banking analyst works for about 100-hour work weeks in the notoriously demanding industry of investment banks.

100-hour work weeks are typical for entry-level investment banking. Although a 9-5 schedule may be the working hours it is not uncommon not to hear of extra working hours and consider it as a badge of pride. If you are someone who values work-life balance, an investment banking career may turn out to be a bad suit.

Stress While Working

An investment banking analyst's normal day would include working frantically through the night and early morning hours to finish a pitch book, rushing home as soon as possible to change and shower, and then returning to the office immediately after the meeting. The capacity to not simply survive with pressure but to thrive under it is crucial in conditions of such high strain where there are numerous deadlines that compete with one another.

Lack of Calm Mindset

Investment banking is not the vocation for you if you don't believe in becoming overly stressed out about anything, including your job. This area is not for you if you put forth your best effort to achieve a deadline when you believe it to be reasonable but feel forced to speak up and object when you believe it to be irrational. This field is not for you if you can't handle working nonstop without complaining, no matter how difficult the task is.

You Have a Streak of Rebellion

You have a tendency to disobey commands and speak your mind, so you don't always do as you're told. Your investment banking superiors, who are accustomed to blind submission, might not appreciate this.

You Lack the Necessary Skill Set

You bluffed your way through many rounds of interviews and one or two financial modeling tests, but you are not an Excel pro. Additionally, you struggle with time management, and you have a history of procrastinating.

You Don't Want to Work as an Investment Banker for a Living

Perhaps you would rather explore other fields, like stock research or portfolio management, than spend the next ten years moving up the investment banking ladder. You don't particularly enjoy the idea of spending the next two years or more producing endless pitch books and presentations as an investment banking analyst in order to get to the position of investment banking associate.

You Can't Live Off of Money

Although it is not intended to imply that all investment bankers are simply motivated by money, one of the main incentives for those who can endure the demanding working conditions is the chance to eventually make a lot of it. Consider pursuing a different career if only earning money isn't your main motivation.

Skills Required for An Investment Banking Career

Intellect

Many of the work requirements can be met with a strong brain with a focus on analytics, mathematics, money, and economics. But it goes beyond these fundamental core abilities. Investment banking also calls for intellectual curiosity so that you may go beyond your own area of expertise to see how the work of a colleague or other elements fits into the bigger picture.

Discipline

From entry-level analysts to managing directors, investment bankers work in a pressure-cooker environment and must be able to execute under strict scrutiny and requirements. These qualities are frequently inherited, but they can also be acquired through a variety of life experiences.

Creativity

Contrary to popular belief, creativity and invention are highly valued qualities in the extremely structured and rigorous world of investment banking. The best bankers are able to tackle problems or offer solutions in novel ways, opening up new markets for goods and services.

Open-mindedness

Being open-minded increases one's capacity to cooperate with and work for multinational corporations by providing access to a greater understanding of cultures and societies. An additional and in-demand skill in investment banking is the capacity to speak in multiple languages while combining that knowledge and comprehension.

Skills for Building Relationships

Bankers need to have social and relationship-building skills in order to succeed, including the capacity to deal with challenging people in challenging circumstances, high energy and a positive attitude. Investment banks ultimately rely on the fees that clients pay them to support their operations. Therefore, attracting and retaining consumers depends greatly on having a good set of interpersonal skills.

Your potential to handle the stress that comes along with an investment banking career can only define whether it is an ideal option for you or not. While having the skills is important, interest should also be the leading principle in venturing into an Investment banker career.