What Certifications Are Most Useful for Investment Banking?
Introduction
If you are preparing for a career in Investment Banking and want to stand out from your peers in a very competitive job market, you should consider obtaining the following certification(s). Each of these certifications will help you develop valuable skills that will be useful in your pursuit of success within the Investment Banking industry.
In addition to providing you with a way to build upon your existing technical and analytical knowledge and skill set, obtaining a professional investment banking certification will underscore the commitment you have made to pursuing a finance career.
Pursuing an investment banking certification is an excellent way to validate your skills and knowledge in the field, as well as to differentiate yourself from other applicants who may be applying for the same job within the investment banking profession.
What is the value of obtaining a certification?
A Certification :
- - Distinguishes your resume from others applying for the same position in a competitive industry
- - Provides you with an in-depth understanding of technical skills related to what you will do day-to-day in an investment banking career
- - Demonstrates to potential employers your commitment and discipline - characteristics that are critical in an investment banking environment
- - Assists those with different career paths to enter the industry easily
- - Makes you feel more confident in your technical interview (if you go through one)
The following is a list of the most common certifications that Investment Banks recognize and value:
1. CFA (Chartered Financial Analyst)
Best suited for: Finance degree holders, aspiring analysts, or those considering a career change to Finance Industry
Level of Difficulty- High
Program Duration- 2 - 3 Years
The CFA Programme is viewed as "the Gold Standard" in the Finance industry. Although most of the material studied within the CFA Programme tends to lean more toward investment management (asset management), the validation of Financial Statement Analysis, Capital Markets, Valuation Methodologies, Ethics, and Company Financial Statement Reporting are highly regarded in the Investment Banking arena.
The benefits of earning your CFA to you as an Investment Banker include:
- - A strong foundation in Financial Statement Analysis
- - A solid understanding of Valuation Methodologies
- - Detailed exposure to Capital Markets and Portfolio Concepts
- - Validation of your Credentials to potential employers and Professionalism. (While it is not mandatory, holding, at a minimum, your CFA Level 1 or Level 2 increases your chances of getting hired for investment banking roles.)
2. FMVA(Financial Modelling & Valuation Analyst Certification)
The Financial Modelling & Valuation Analyst Certification (FMVA®) is offered by Corporate Finance Institute (CFI) and provides aspirants in the Investment Banking sector, who are currently in school or just beginning their careers, with practical experience in areas like valuation, Excel Modelling, Scenario analysis, and Financial Forecasting. As one of the most practical and job-relevant Financial Modelling Certifications for those looking to be Financial Analyst, FMVA is highly recognised amongst Corporate Finance professionals as well as globally.
Now that we have established that the FMVA Certification is valuable in relation to finding jobs in the field of Investment Banking, it is important to showcase the reasons why this certification is valuable in helping aspiring Investment Banking Analysts succeed in their careers.
With the FMVA Certification you will not only have completed extensive training in Financial Modelling, Development Asset Valuations, Financial Forecasting, and Scenario Analysis, but FMVA will prepare you to tackle any Interview Case Studies and Financial Modelling Tests.
3. NISM Certifications
NISM Certification Programmes are recognised by SEBI as an excellent way for students in India who wish to pursue a career in Investment Banking, Capital Markets, or Research.
Common Roles covered by NISM Certificates include: Investment Banking, Equity Capital Markets (ECM), and Research.
India-Specific options for IB students include: Series IX Merchant Banking Certificate, Series VIII Equity Derivatives Certificate, and Level 1 & 2 Investment Adviser Certificates.
It is also important to understand NISM certifying organisations, as they are an affordable and easily accessible way to gain knowledge of India's Financial Markets and how they operate.
4. CPA (Certified Public Accountant)
Most suitable for: Accounting-heavy M&A and due diligence professionals
Level of difficulty: Moderate to High
The CPA qualification is beneficial for professionals with a strong accounting background and the CPA provides you with a deep understanding of accounting standards, deal structuring, financial evaluations, auditing, restructuring, and advisory duties.
In investment banking, Certified Public Accountants (CPAs) are important team members within M&A teams and corporate finance roles. M&A deals require in-depth financial scrutiny, and therefore the need for CPAs in these teams.
5. CA (Chartered Accountant – India)
Most suitable for: Indian candidates looking for Investment Banking, Corporate Finance, or Transaction Advisory roles
Level of difficulty: High
CA has a good reputation in India, and the majority of analyst positions within Indian Investment Banks are based off of a Chartered Accountant (CA) background. The CA qualification provides a very good foundation of knowledge in accounting, taxation, auditing, and financial controls.
What makes CA valuable in Investment Banking is the CA's excellent understanding of financial statements. This is often essential when considering due diligence type roles. Compared to CA firms, boutique Investment Banks in India may favour CA over CFA, CPAs, or FMVA qualifications. If paired with certification, such as the CFA or FMVA, the combination of the two creates a solidly competitive profile.
6. MBA in Finance (not a certification, but very important)
Although an MBA is not certification, it is one of the clearest routes to a career in investment banking. Top tier Business Schools offer MBA degrees, and therefore an MBA is a very useful credential for anyone looking to work in investment banking.
Reasons why an MBA will Help in Your IB Career
• Provides access to on-campus placement opportunities in IB
• Provides access to extensive networking opportunities
• Provides insight into the areas of corporate finance, corporate strategy, and advanced modelling techniques
• More likely to be hired for associate level positions
Having an MBA from a top institution (such as IIMs or ISB or Ivy League), will shorten the path to your investment banking career.
7. A variety of Investment Banking Specific Certification Programs
Short-term, or "crash course" investment banking certification programs may also help prepare you technically to be employed in IB.
The most popular of these programs include:
• IB Certification - Wall Street Prep
• Breaking into Wall Street - BIWS
• Imarticus Investment Banking Program
• Investment Banking Course - NSE Academy
Benefits of these courses:
• Teach actual investment banking modelling exercises.
• Cover DCF's, LBO's, M&A's, Comparables and Pitchbooks.
• Prepare for technical interview rounds.
• Build practical skills on the job.
These courses are great for freshers and anyone transitioning their career to become an Investment Banking Analyst.
8. Bloomberg Market Concepts (BMC)
Best Suited For: Early Career or College Students
Length: 8-10 hours
BMC provides a fast overview of topics such as Financial Markets, Economic Indicators, Fixed Income and Equities.
BMC Adds Value
• Demonstrates knowledge of the Bloomberg Terminal.
• Provides a good foundation for any candidate seeking to work in Finance.
• Strengthens your Resume and C.V. if you are early career.
Although not directly technical, the BMC course provides a strong foundation in the financial marketplace.
9. Excel & PowerPoint Certifications
Investment Banks need to use Excel for Financial Modelling and PowerPoint for Pitch and Presentation creation. Completion of Excel and PowerPoint Certifications indicates that you have acquired proof of your expertise in these critical business tools.
Selecting the Right Certification
Your certification(s) should be based on what stage of your career you are in.
A. For Students or Entry Level Candidates: Start with: FMVA, BMC and NISM Research Analyst.
B. For a Recent Graduate, or if you are planning on changing careers: Look to pursue the CFA Level 1 exam, FMVA or an IB-specific certification.
C. If you are a working professional in finance: Pursue Certifications in CFA, CPA or CA.
D. If you aspire to work in International Investment Banking: Look to obtain both an MBA and a CFA/FMVA certification.
To Conclude
While the certifications alone will not land you a job in the Investment Banking industry, they help in developing your technical skills and creating a unique identity in the Recruitment Process, as well as preparing you for challenging Interview processes that the Investment Banking profession has to offer. Ensuring to take Certifications based on your experience level and role aspirations will greatly enhance your opportunity of breaking into the Investment Banking industry.