team of finance professionals reviewing documents

Corporate Finance vs. Investment Banking: Which Career is Right for You?

Are you analytical with a knack for numbers? Several career paths might be right for you, including ones in corporate finance and investment banking. Here’s a look at both and the barriers to entry.

 

What’s the Difference?

You should know that in a general sense, these two fields aren't all that different. Investment banks raise capital, or money, for other companies through securities operations. Investment bankers also facilitate mergers and acquisitions (M&A), advise clients, and delve into the area of financial analysis.

Corporate finance is a more generic term, in that it simply refers to the practice of managing financial activities on behalf of a firm. Investment banking might even qualify as a type of corporate finance. An investment banking firm might have a corporate finance division, so there can be some area of overlap.

Perhaps the easiest way to understand these two specializations is by looking at the day-to-day work of professionals in both domains. For example, corporate finance is concerned with the daily financial operations as well as short- and long-term business goals. For the most part, an investment banker spends his or her time raising capital, running private placements, and conducting M&A deals. You can think about it in these terms: an investment banker grows a company, and a corporate finance professional manages a company.

 

close up of a finance professional's hand making calculations on a tablet

 

Pre-Requisites

Landing an investment banking job is no small feat, as it’s considered one of the most elite fields in the financial industry. Most professionals attend a prestigious undergraduate program (finance economics or related discipline) then enter the workforce as an analyst. Another common route is to expand education with an MBA and attempt to break in that way.

What does “breaking in” look like? The positions can run the gamut: individuals might land jobs as accountants, advisors, account managers, analysts, treasurers, business analysts, or any number of other jobs.

The barriers to entry in corporate finance careers are less significant, however. A relevant degree and work experience, like an internship or co-op, can position a candidate for success.

 

Dollars & Cents

Investment banking careers are financially rewarding for those who make the cut. According to Mergers and Inquisitions, entry-level salaries are in the $60-$70K range, with potential future earnings reaching six and even seven figures. So, what about those in corporate finance? It's challenging to provide an accurate range for the average corporate finance salary because there are too many different kinds of jobs available. However, for the sake of comparison, the national average salary for a corporate finance analyst is $65,690. Suffice it to say that financial analysts stand to out-earn their corporate finance peers. An investment banker salary is among the highest in the world for those right out of school.

 

close up of a banking professional's hands on a keyboard

 

Outlook

The future is bright for those who wish to pursue a career in finance. According to the Bureau of Labor Statistics, “Employment of business and financial operations occupations is projected to grow 9 percent from 2016 to 2026, about as fast as the average for all occupations, adding about 750,400 new jobs.” The BLS cites globalization, a growing economy, and increasing government regulations as factors that will create a strong demand for analysts.

By Lauren Caggiano, Guest Author | Originally Published: December 19, 2017

Sign In or Register to access all articles and insider tips for help in your job search.

Search for Finance Jobs

RELATED JOBS
Senior Financial Analyst, Production Inventory Control
Victoria's Secret
Reynoldsburg, OH

Your Role The Production Inventory Control Senior Financial Analyst is responsible for managing...

Controller
Columbus, OH

Company & Role Real estate company is seeking an experienced Controller to lead their accounting...

Business Analyst
Global Payments, Inc.
Columbus, OH

Every day, Global Payments makes it possible for millions of people to move money between buyers...

Financial Representative
The Western and Southern Life Insurance Company
Grove City, OH

Do you have a desire to be part of a team of talented people who are driven by new challenges...

Treasury Management Officer - Healthcare, Higher Education, and Nonprofit
JPMorgan Chase
Columbus, OH

Are you customer focused, enjoy building relationships and providing financial solutions to your...

Find a Job »

Find the Right Job Faster

Create Your FREE Account Today to Unlock Exclusive Career Tools
  • Get personalized job matches sent to your inbox every day
  • Connect directly with employers before your competition
  • Advance your career with expert advice on interviewing, salary negotiation, and more
iHire brandmark

We value your privacy