You almost certainly know about the 120 hour workweeks of investment bankers, the long Sundays in the office at a cubicle tapping away. If you’re interested in a career in finance—and the very large financial rewards that can come with it—you probably aren’t intimidated by these grueling workweeks. If you’re ambitious, you’ve probably already spent as much time cramming for tests before. And isn’t being an investment banker really just a two-year long test to join the elite?
You might want to think twice about what kind of life that 120 hour workweek will be. Not because it’s going to be hard or unmanageable or brutally destructive to one’s mental health. Instead, you should rethink what you’ll be doing, because it’s probably going to be very different than you imagine.
First, let’s define investment banking. Retail banking is a combination of safekeeping of customer deposits and providing customer financing (mortgages, car loans, small business loans). Investment banking is more of an advisory, consultative job where one isn’t in the business of safekeeping or financing at all.
As odd as that sounds, investment banking isn’t really banking. Whether you’re in middle market debt financing, tech M&A, or real estate, investment banking functions are all extrapolated from the basic retail banking function. A customer who saves at a bank may want to expand from saving to investing, and knowing what investments are right requires a significant amount of knowledge and analysis. That requires a professional advisor. Thus the investment banker is born.
There are obviously three motivations in this interaction. The customer wants the best return at the lowest risk, and the banker wants the highest profit for herself and her bank. But the banker also wants the customer to be satisfied so that she will return—and since investment banking is structured in a lot of free work being given in the hopes of a very large payday from one very big paid job in the future. A smart banker knows that having a pipeline of customers interested in hiring you for the big paid jobs is more important than deceiving customers and getting the highest profit in the short term.
The problem is that almost any investment is very, very complicated, and distilling very complicated information into a format that a diverse group of clients can understand is hard. This is why presenting data is very important.
To prepare for an investment banking role, studying data visualization is not a bad idea. Bad charts, so-called “chart crimes”, are shared, critiqued, mocked, and laughed at in various corners of the internet, and rightly so. A banker who is familiar with these errors avoids them, and that is a tremendous value for an investment banker.
Note that this has nothing to do with IRR, WACC, DCF, or any other finance acronym you can think of. Now we’re talking about changing the color scheme of a chart at 2a.m.—the kind of requests that junior investment bankers get constantly, and which fill up their 120 hour workweeks.
The brutal gruntwork of the starting banker is considered a rite of passage, but it is also a crash course in the real world use of visual language and verbal language to influence other people. Many investment bankers are surprised to learn that they start out not digging into numbers and doing sophisticated statistical analysis, but they start out learning how to win business and influence people.