If you make it to managing director in investment banking, the pressure really starts. Not only are your revenue targets much higher, but you have to navigate an increasingly political environment and lead team of highly ambitious individuals who would love to be in your job. And, if juniorisation of the ranks continues, MDs are likely to be increasingly younger.
It takes a certain kind of person to get, and remain, in the senior ranks over the long-term. According to current and former senior investment bankers, these are the habits and traits you need to adapt to succeed in the industry over the long term.
Part of ensuring your long-term survival in investment banking is knowing what sort of personalities large financial institutions look for at different phases of your career, says Graham Ward, the former head of equities at Goldman Sachs and now adjunct professor of leadership at INSEAD.
"At inception you need to fit in and be a team player, with a strong willingness to learn from all the big egos around you," he says. "Next you need to demonstrate a sharp commercial acumen and an innovators' mindset. Create something unique. Finally, no successful investment banker, even in trading, was ultimately successful if they do not have an eye on the needs of clients. Once you make clients your friends you become less dispensable."
It's not enough to be smart, you must back this up with clear focus and determination on bringing in new business. Most pitches for new business, despite the huge amount of work required, are destined for failure. You need to be prepared for this.
“What I lack in brains, I make up in energy,” Diego De Giorgi, the global of investment banking at Bank of America Merrill Lynch has said previously. “You need to be energetic, enthusiastic, persistent and dogged. Most pitches won’t be successful and you could have spent hours working on a presentation, but so will have the competition. We don’t sell a physical product, we sell what we can do for clients and you need to show intellect, but also doggedness.”
As cheesy as it sounds, investment bankers must always be thinking about how they can add value during any interactions with clients. This means staying informed to the point that you have more knowledge than the supposed experts, says Ziad Awad, a former Goldman Sachs and Bank of America Merrill Lynch managing director who now boutique bank Awad Capital.
"You need to read up on everything connected to your coverage area and your clients. I can't tell you how many first meetings I've had with company CEOs and chairmen where I've told them something they don't know about their company or sector," he says. "It's a matter of extreme discipline - read through all the company reports, news and letters to shareholders you can find. Read between the lines, make assessments and learn any way you can. Have the confidence to ask questions on issues you don't understand to improve your knowledge."
As you progress up the ranks, you must always prove that you're better at most task than those below you. As you gain more experience, it stands to reason that you should be more skilled than junior members of the team. The challenge as you move up, says Gregg Lemkau, co-head of the investment banking division Goldman Sachs, is learning when to let go and delegate.
"Investment banking is also an apprenticeship business, and you need to strike the right balance between doing and teaching those that work with you how to do it," he said. "You have to do both so that they can learn the business and provide you leverage to be able to be out serving your clients. Striking this balance as to how “hands-on” to be is a continual challenge throughout one’s career."
Investment banking career paths are not always linear. They are not based in one location and they rarely stay in one sector. Take the opportunities as they arise, says Ward.
"Sometimes as in war, your masterplan is ripped up on first contact. If opportunity knocks it rarely does so twice," he says. "The flexible and open-minded tend to be long-term winners. If you are offered a promotion but it is in Tokyo for two years, take it. The worst thing that will happen is you will learn something about yourself."
The hours are, of course, long in investment banking - 70-hours a week and you're not even 'in the game'. What little time off you have should be used wisely.
This is not always obvious chill out time. "I know a lot of bankers who do competitive cycling or run ultra-marathons," says Awad. "I sail competitively and admit that I bring my competitive attitude to work to my hobby. But you need something to stop the demotivation or burnout when you're putting in the hours or getting up at 4am to catch an early flight for another business trip. Male bankers become obsessed with fitness when they hit 40."
Every new year, you start from zero. Never assume you've made it, and never rest on your laurels.
"In town hall meetings, I keep bringing up the analogy of the Wimbledon championship," said Vis Raghavan, EMEA CEO at J.P. Morgan. "The day after winning the tournament, what makes the champion get back on the treadmill and start the whole process again? You might have won the final in five sets, but winning it 6-0, 6-0, 6-0 makes you the champion beyond doubt. In short, there is always room for improvement."
Once you make it to managing director, the pressure increases. You've not made it to the summit of a mountain, you've poked your head above the parapet and must be prepared for greater scrutiny than ever.
“Managing directors in investment banking last around 18 months,” Randall Dillard, the former head of investment banking at Nomura said. “Most people simply cannot handle the amounts of revenue they are expected to generate year after year.”
Senior bankers are under more scrutiny about which elements of client interaction can strictly be categorised as work. Client relationships need to run deep, says Awad, and any investment banker who focuses on a single deal over long-term relationships with clients will not succeed. The key is not to be overly wedded to the idea of free weekends.
"You need a passion for your clients," he says. "Top investment bankers socialise at weekends with clients, they go to sporting events and they hang out with clients' families. This is something I've experienced on a regular basis."
If you want to be one of the people who climbs up the career ladder, you have to accept that there will be many who will fall by the wayside and need to focus on your own goals, says Ward.
"You need to be brutally disciplined, current, and develop a thick skin," he says. "It is a competitive marathon and you pass a lot of corpses along the way. So having your eye on the horizon and having a strategic gameplan is essential."
Clients will be demanding, managers will be unreasonable and job security will be shaky. Throughout your career, you must not get emotionally involved. An extensive study into investment banking careers by Maxine Robertson at Queen Mary University in London and Mats Alvesson from Lund University, Sweden published in 2015 suggested that emotions and investment banking don't mix. Most of the interviewees for the study were never “upset, happy, humiliated, perturbed” even during tough times.
'Lee', a senior investment banker interviewed during the study, said that he tries to avoid his boss' 'dark side': “I don’t care, what can I do? And he’s unpredictable when he explodes. It doesn’t faze me. I am kind of used to it now and it just washes over me. I’ve developed a lot thicker skin and that comes in part from dealing with clients. I just see it as my job and don’t take anything personally.”
This sounds trite, but the one thing in Robertson's study investment bankers did care about was that they wore the right (expensive) clothing and knew how to dress at all times. Senior investment bankers even make hiring decisions based on this. 'Charlotte', a senior investment banker interviewed for the research, said she turned down one junior for being scruffy.
“He had quite a lot of internships and really good experience, but now I know why he hasn’t got a permanent job. He kind of slobs around on the trading floor, he is one of those guys that can make a really expensive, sharp, nice suit looks scruffy and old. It’s all part of the wrap, it’s the kind of veneer we deal with in this business,” she said.