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So You Want to Be an Investment Banker, Doctor?


If you have a head for numbers and analysis, are good at research and due diligence, and like finance, investment banking might be your ticket. Here's how to get there.

As Wikipedia puts it, “An investment bank is a financial institution that assists individuals, corporations, and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions, and provide ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities.”

I have served as an advisor to life science groups for several different investment banks and I've noticed several doctors have done the same in one capacity or another.

If you have been toying with the idea of being an investment banker, you should understand how you get from here to there.

The rules and procedures for how to become an investment banker are mostly determined by FINRA, the Financial Industry Regulatory Authority. To get a broker's license, you need to pass the Series 79 exam, a 5-hour exam which consists of 175 multiple-choice questions.

The questions are broken down based on the major job functions of investment bankers and include collection, analysis, and evaluation of data; underwriting/new financing transactions, types of offerings, and registration of securities; mergers and acquisitions, tender offers, and financial restructuring transactions; and general securities industry regulations.

The first step in your career pathway is to identify a member firm willing to sponsor you. Member organizations must investigate the good character, reputation, qualifications, and experience of personnel they intend to register with FINRA and submit an application to register for the exam on Form U4. In addition, if you have past transgressions or violations, you might be statutorily disqualified from taking the test.

Upon notification, you will determine when you want to take the test at a regional computer testing site. You will get immediate notification whether you have passed the test or not. If you fail the test the first time or second time, you must wait 30 days before taking the test again. If you fail the test the third time, you must wait 6 months before taking it again.

If you do not have experience or have not worked in this industry before, my take is that sitting for the Series 79 cold is like taking your board exams without ever having seen a patient. You can study, go to prep courses and cram, but there is a reasonable chance you won't pass. In addition, unlike other career alternatives we have mentioned on this site that are suitable to those who want to continue to practice on a part-time basis, investment banking requires your full attention. What's more, licensed investment bankers are required to follow rules that might conflict with your medical interests, for example, conflicts of interest or reporting outside non-investment banking income.

Investment bankers have a reputation for making lots of money and working outrageous hours. Some do. Others are now out of work and thinking of going to medical school.

If you have a head for numbers and analysis, are good at research and due diligence, and like finance, investment banking might be your ticket. In the final analysis, however, banking is a relationship business and your job is to understand the needs of your client, be creative about solving their needs and problems, and help them execute a plan to get there. Sound familiar?

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Victor J. Dzau, MD, gives expert advice
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