Investment bankers helps corporations and high net worth individuals to invest their money diligently. They also advice clients on various financing option for investment projects and facilitate the issuance of financial securities on their behalf. They also provide other additional services to their clients including specific transactions advice, mergers and acquisition advice, reorganization among many others. Investment bankers are often located in large financial institutions.
Corporations use investments bankers because they save them time and money. Investment bankers are trained and have the expertise to identify any potential risks that are likely to arise in a project before the company makes any commitment. That way, the company may avoid the project entirely or identify measures to eliminate or minimize the risks. Investment bankers also facilitate the matching process of investors and the corporations that wish to raise finances through equity. Investment bankers are well vast with the regulatory requirements. Investment bankers are also use their expertise to assess the various factors and accurately calculate the share price that a stock should be issued that reflects the market projections. Investment bankers also offer advice on how best to arrange financial affairs to minimizing financing costs for corporations thus increasing their overall profitability.
Foxworthy points out that investment bankers earn a starting cumulative salary (including bonus) of between $100,000 and $150,000 with a bachelor’s degree as at 2013. An MBA graduate will earn between $120,000 and $220,000 including bonus. However, the salary varies according geographical region. The bonus is usually between 10 and 50 percent of the salary. However, there has been pressure following the financial crisis. The financial crisis resulted in losses or decline in profits for investment banks.
References
Foxworthy, J. (2013). Investment Banking: Salaries. Retrieved from http://www.careers-in-finance.com: http://www.careers-in-finance.com/ibsal.htm
Khan, W. (2004). Financial Management: Text, Problems And Cases. New York: Tata McGraw-Hill Education.
