Investment Banking Roles and Responsibilities | Generated by AI
What is Investment Banking?
Investment banking is a specialized segment of the financial services industry that focuses on helping corporations, governments, and institutions raise capital, execute complex transactions, and navigate strategic financial decisions. Unlike retail or commercial banking, which deals with everyday consumer services like loans and deposits, investment banking acts as an intermediary and advisor. Key activities include:
- Capital raising: Underwriting initial public offerings (IPOs), bond issuances, and private placements to help companies access funding from investors.
- Mergers and acquisitions (M&A): Advising on buying, selling, or merging businesses, including valuation, negotiation, and deal structuring.
- Strategic advisory: Providing guidance on restructurings, divestitures, and other corporate finance matters.
It’s high-stakes work, often involving large fees for the banks and requiring deep expertise in markets, regulations, and economics. Major players are “bulge bracket” banks like Goldman Sachs, JPMorgan Chase, and Morgan Stanley, which dominate global deals.
Roles in Investment Banking at Big Banks
In big banks (often called bulge bracket or universal banks), the investment banking division (IBD) operates with a clear hierarchy, resembling a pyramid where fewer people advance to senior levels. This structure supports deal teams that pitch ideas to clients, execute transactions, and manage relationships. Roles typically progress from junior (analytical and support-focused) to senior (client-facing and revenue-generating). Here’s a breakdown of the main levels:
| Role | Key Responsibilities | Typical Experience | Compensation Insight (Base + Bonus, USD) |
|---|---|---|---|
| Analyst | Entry-level; build financial models, prepare pitch books and presentations, conduct market research, handle data analysis. Long hours (80+ per week). | Recent college grad (0-3 years) | $110K–$150K + $50K–$100K bonus |
| Associate | Manage analysts, oversee modeling and due diligence, start client interactions, coordinate with legal/external advisors. More responsibility for deal quality. | MBA or 2-3 years post-undergrad | $150K–$250K + $100K–$200K bonus |
| Vice President (VP) | Lead deal execution, manage junior staff, build client relationships, negotiate terms. Focus on project management. | 4-7 years in IB | $250K–$400K + $200K–$500K bonus |
| Director/Senior VP | Oversee multiple deals, mentor VPs, deepen client ties, contribute to business development. Bridge between execution and strategy. | 7-10 years | $400K–$600K + $300K–$800K bonus |
| Managing Director (MD) | “Rainmakers”; originate deals, win mandates from CEOs/CFOs, lead teams, drive revenue. Heavy emphasis on networking and sales. | 10+ years | $500K–$1M+ base + $1M+ bonus (performance-driven) |
Progression is competitive—many exit after 2-3 years for better work-life balance or related fields like private equity. Big banks recruit heavily from top schools, with summer internships as a common entry point. Culture is intense, collaborative, and prestige-oriented.
Investment Banking Overview - Corporate Finance Institute
The Hierarchy of an Investment Bank - Investopedia
Investment Banking Career Path: Roles, Salaries & Promotions