By Satyajit Mishra
I have often heard ridiculous stuff from people about the lives of junior bankers and analysts in investment banks (IB). Investment banking is not living the life of Bud Fox. Certainly not in 2014. As an aspiring analyst, I have read up extensively on the lives of investment bankers and would like to break some of the most common myths my friends hold about IBs.
Myth 1: The working hours. Investment bankers work 15 hours a day, 7 days a week.
Investment Bankers dont work over 100 hours every single week, ever since they broke into investment banking. Sure, there may be a few hectic 120 hour work weeks , but in general I-bankers average around 80 hours a week, and on slow weeks it can go down to a humble 60.
This is because banks under-hire. Always. If they were to over-hire , many bankers would be sitting around idle most of time because of the unpredictable demands of the clients. When they under-hire, during uneventful work weeks bankers tend to work 60 hours. During peak periods, they work longer hours than usual. Banks view this as a much better alternative than letting people sit around idle.
Myth 2: If investment banks have so much work, cant they just hire twice as many people?
Most people who know anything about I-banking think since bankers get paid twice as much, they need to work twice as much. False. The real reason bankers work so much is because the job is completely unpredictable and division of labour is impossible. It is very difficult to keep multiple bankers in the loop and if a senior banker wants something done, she will pick one person who is responsible for everything not two or three who have something to do with the assignment.
Also clients may have completely unpredictable demands, random request and problems always come up. And as an investment bank, one has to attend to this. Unlike other companies that sell products, investment banks sell time and attention, bankers have to respond to every single request the client makes.
Myth 3: You need GOOD math to succeed at Investment Banks.
Most math in investment banking is very simple. At best there are basic IRR, mean and median calculations. Nothing more. Banks will almost never use calculus, differential equations or even trigonometry. Even financial modelling isnt complex. The math that you have learnt in your ISC or CBSE is enough. Investment banking isnt rocket science, it isnt margin call.
As an analyst more time is spent on administrative and qualitative tasks than quantitative tasks. Junior bankers will need excellent communication skills to do well. Reading quickly, writing well and talking to people are infinitely more important than advanced math. Advanced math and NOT math. After all most of the time is spent on research, scheduling meetings and emailing clients, co-workers and bosses; while trying to keep everyone in the loop. If youre good at numbers, and would like to work mostly with them, you would probably be better suited to trading instead of investment banking.
Currently in 3rd year of B.Com under Calcutta University specializing in accounting and finance. Also pursuing Chartered Accountancy. Reading research and analysis of the global economy, political matters that influence our economic decisions, game theory and strategies in war, strategy formulation and implementation and contemporary issues in marketing interest him a lot.