Do I Need an MBA for Investment Banking?

Updated on March 16, 2023

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Many investment bankers earn six figures their first year out of business school.
Competition for investment banker positions is high, but an MBA can help you secure a position.
Many business school MBA programs provide networking opportunities with investment bankers.li>

An MBA degree is not a requirement for entering the investment banking field; however, you may have an easier time securing a job with this advanced degree. A business degree is a particular asset if you plan to work at one of the top multinational banks like Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Merrill Lynch, or Deutsche Bank.

The potential to earn a very high salary is what attracts many people to investment banking. Investment bankers routinely earn six figures their first year out of business school.

However, while the salaries are often high, the work can be grueling. A report from Goldman Sachs notes that, on average, first-year analysts work over 95 hours per week.

Even though the work is challenging, investment banking is highly competitive. As banks try to navigate their way through uncertain economic conditions by closely monitoring the size and scope of their workforce, the field is likely to grow even more competitive.

According to the Bureau of Labor Statistics, competition for investment banking and financial analyst positions is high. This competitive environment can make finding a job through traditional channels a challenge, especially for those with only a bachelor's degree.

Although it is possible to enter the field of investment banking with only a bachelor's degree in a business-related field, you will likely need an MBA or another advanced degree if you want to progress in your career. Most people who enter the field of investment banking for the first time do so after graduating from an MBA program.

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Why Get an MBA for Investment Banking?

Most business school MBA programs can prepare you for a career as an investment banker. Investment bankers help companies raise money through facilitating acquisitions and mergers, arranging sales, selling stocks and bonds, and advising companies on going public. To be a successful investment banker, you must develop skills in finance, analytics, negotiation, and sales. MBA programs can help you develop these abilities.

While some schools offer MBA degrees with a concentration in investment banking, most professionals who enter the field do so with a concentration or heavy coursework in fields like finance, investment management, accounting, statistics, and/or economics. Earning an MBA from an accredited business school that offers a strong financial curriculum can give you an advantage over job-seekers with comparable experience and only a bachelor's degree.

There are definite advantages to getting an MBA when preparing for a career as an investment banker. If you enter the field with only a bachelor's degree, chances are you will need to get an MBA to advance. However, if you're not quite sure if investment banking is the path you want to follow, it may make more sense to complete an internship or gain a few years of work experience before enrolling in an MBA program.

You can help make this decision by reviewing the pros and cons listed below.

Pros of Getting an MBA for Investment Banking

Pros

Many MBA programs provide opportunities to network with investment bankers and recruiters from regional, national, and international banks.
You can help get your foot in the door at investment banking firms through MBA alumni programs. These programs can be especially helpful if you didn't earn your degree from a top business school. Many senior bankers show loyalty to their business schools by hiring alumni.
MBA programs often help students find internships through on-campus recruiting programs. Internships are among the best ways to bypass the traditional hiring process in investment banking.
MBA programs often help prepare you for interviews. The job interview process at top investment banks can be challenging.
An MBA degree can help you transition from investment banking into highly desirable roles in private equity and hedge fund management.
An MBA degree can help you transition from investment banking into highly desirable roles in private equity and hedge fund management.
If you plan to work at one of the top investment banking firms, an MBA may be your only way in.
Banks sometimes offer tuition assistance for employees who want to pursue an MBA. This can help relieve the financial burden associated with earning an advanced degree.

Cons of Getting an MBA for Investment Banking

Cons

You may be better off getting started with only a bachelor's degree if you plan to work for a local or regional firm. An MBA is not a requirement to enter the field of investment banking. You can get your MBA at a later date should you decide it's worth pursuing.
Getting an MBAdoesn't guarantee you will land a position at a top bank. This is especially true if you didn't graduate from one of the top business schools targeted by these firms.
It's difficult to get into a top MBA program. If your GMAT scores and your undergraduate GPA aren't strong, you might have trouble gaining admission into a top program.
Pursuing an MBA requires a significant amount of time and financial resources. Depending on your situation and other obligations, it may be difficult to continue working while earning your degree.

Alternatives to Getting an MBA

Get a master's degree in a finance-related field, which offers many of the same benefits as an MBA.
Get certified as a chartered financial analyst from the CFA Institute. This can help you develop many of the skills that employers seek. It's also a valuable designation to add to your resume and may improve your chances for advancement.
Pursue other accounting- and finance-related certifications.

Frequently Asked Questions About Getting an MBA for Investment Banking

Some investment banks offer tuition assistance or full tuition reimbursement for employees who want to pursue an MBA. To get full reimbursement, you must typically commit to working with the company for a designated period of time following graduation.

A master's in public administration can lead to many different careers working in management or administration. Students should begin their career searches by identifying industries that spark their interests.

Although the majority of top investment banks prefer to hire employees with an MBA, the degree is not a requirement to enter the field. However, to advance at top companies, an MBA is often a requirement.

Graduating from a top business school with a general MBA or an MBA with a concentration in finance, accounting, economics, statistics, or mathematics is often a promising route for aspiring investment bankers.

Reviewed by:

Krystal Covington, MBA

Krystal Covington, MBA, is a business growth strategist with 15 years of experience in marketing and public relations. Her company, Go Lead Consulting, provides clients with foundational tools to build new client and customer relationships.

Covington founded Women of Denver, one of the largest privately held membership organizations in Denver, Colorado. Her program helps women increase their business acumen, sharpen leadership skills, and connect with other high-achieving women. Covington received her MBA from Western Governors University in 2012.