The biggest misconception in India with most students and working professionals, that CA is only for auditing and taxation. However, the reality is that your hard work and grind that you have done in CA is not going to waste. In this blog, I will tell you the precise way by which I will guide you for this question, “Can a CA become an Investment Banker?”.
Make sure to read all the data properly, to get the best guidance possible.
Entry Paths for Investment Banking
So, as soon as you think about Investment Banking the first image that shoots in the mind is acquisitions, stock pitch etc. However, that is the glamour quotient which is rarely real life. However, in reality investment banking is a wide field with very defined services that it provides.
Investment Banking Services:
This image below shows the different kinds of services that an investment bank may provide.
So, in most of the cases broking activities would also be a part of an investment bank’s operations. This is an important point for the questions, “Can a CA become an investment banker”. And the reason why I say that is because, can we for certain say that there is only one size fits all degree that someone can do, to become an investment banker.
Also, would you can you a person working in raising debt and equity an investment banker, while a another working in research not? Ofcourse not, so basically anyone and everyone executive any of the above functions at a business level, is an investment banker. Infact, even a person in wealth management selling mutual funds for a client, would qualify to be called as an investment banker.
Investment Banking Divisions
Now, that you know the various services provided by an investment bank we need to also sub categorise these services itself into three major offices;
- Front office
- Middle office
- Back office
So for example; a person in equity research can be front office and another person might be in middle office too. This is also important to understand, because you don’t have to super qualified to get into investment banking. Which means, you can get into investment banking back office, which has less stringent requirements and then gradually move to middle office or even front office roles.
So, as you can see the various functions in various divisions. So, even though you might be from a pure accounting background you can still enter performance reporting in back office.
Experience Required and Suitability
Look at the above job description. This job should be a clear answer for, can ca become an investment banker. Just to reiterate the concept, the company JP Morgan is an investment bank but its role is in financial planning and analysis. However, the important thing to understand is that in case you have not yet started in investment banking, then it might be a good idea to stay in financial services.
Skills & Preparation
Now, let me in very short discuss the various skills and preparation that would be required for entering investment banking. Also, I would be discussing majorly the front office and middle office role requirements because most of the back office jobs don’t require very niche skills.
So at the basic level, a Chartered accountant is already well-versed with financial statements but here are the few things which you should learn:
- Learn Financial modeling & Valuation:
- This is the skill which gets used in valuing and taking decisions in finance and is a must to work in investment Banking
- You can check out our financial modeling course by mentor me careers, in case you are looking out for placements.
- However, there are plenty of courses and youtube videos which are available for free, incase you wish to prepare yourself.
- Spend some time on Forensic Accounting
- You don’t need to take up a course for forensics but highly recommended to read the book “Accounting shenanigans by Howard Schilit”
- Practice Valuation Questions and Answers
- You can check our full list of question and answers for valuation.
Top Companies that Hire CA’s for Investment Banking
So, first of all I wouldn’t really find any company that won’t hire a CA. Of course provided that you know the skills that I mentioned but here are frequent hiring companies for CA in investment banking in India.
- Transparent Value
- Gold Man Sachs
- JP morgan
- EVALUE SERVE
This would be the average salary considering that you are a fresher and are entering equity research or financial analyst type of jobs. Salary for experienced candidates can vary substantially basis various companies.
In short, to the whole question “Can a CA become an Investment Banker?” Yes. No Doubt about it. Just make sure to understand the preparation and salary expectations plus the interest in the field itself.