Can Chartered Accountants Become Investment Bankers?

Yes, In fact, there are too many Chartered Accountants at present who have chosen a career as investment bankers.

Chartered Accountant is someone who manages the compliance perspective of financial statements like taxation and auditing with a slight emphasis on finance areas like analysis and evaluation.

Investment Banker is someone who deals with the business perspective of the financial statements by helping the organization to raise capital from the market, advising on mergers and acquisitions, etc.

CAs who choose to be in the field of investment banking perform very well because they have a clear knowledge of several fields like tax, law, finance, equity market, debt market, capital market, IPO, securitization, and Mergers & Acquisitions, valuation technique, and foremost accounts. Investment Bankers go through intense training through their firms, freshers basically begin as an analyst after training they are introduced to the principles of markets.

A CA is already well versed in the subjects of investment accounting like valuation, stock market, portfolio management, and many more. They even possess better IQ, finest brains, and in-depth understanding of several concepts that are related to investment banking.

Getting into an investment banking profile is a dream for many CAs. They even believe that here MBAs clearly have an edge over CAs, but it is even tough to get into even for MBAs. Several investment banking firms choose people who have excellent knowledge in investment accounting.

A CA can get a job in it relatively easier and if they are smart enough they can crack it and convert it into a career development path. There are many firms globally that do hires CAs for investment banking a few of them are - SBI Capital Kotak Securities, Equirus, and Moody’s.

Many multi-national investment banking firms chose to hire Chartered Accountants for higher-level positions, especially in the product control and fund accounting departments. A few of them are - Goldman, Barclays, and HSBC

If you want to be in an investment banking firm it is highly recommended to initially begin with any of the companies such as JP Morgan Chase, Goldman Sachs, Morgan Stanley, Citi Group, Credit Suisse, Deutsche bank, etc. Acquire some experience, gain knowledge of investment accounting and make one expertise in a certain area in any of the investment banking fields. Then persuade the managers and seniors to change your profile as per the expertise area you have gained.

Infact, CAs who manage to break into IB perform exceedingly well due to a solid knowledge base of law, tax and most importantly, accounts.

For example - I work in the Real estate, Hospitality and Retail team of the IB division. All my financial models need to have Accounting Standard - 7 incorporated in 'em. Fortunately/unfortunately, everyone in my team is a MBA and they don't know jackshit about accounting standards. That's where we can add immense value.

The biggest hindrance for a CA to become an investment banker is expertise in Finance - which can very well be sorted out but, requires a lot of reading. I'd suggest everyone to become Excel experts. Microsoft Excel is one factor which can indeed make you stand out from the rest. Take up self - help tutorials, do financial modelling courses, do valuation courses etc. Also, one should actively track any two sectors of his/her liking. My personal favorites are Defence, Real Estate and Micro finance (Disc - heavily invested in a micro-cap Defence stock).

In IB, the research you do is vital. Better the research, more better is the sales pitch. This makes top-notch industry knowledge your life support.

You'll be attending a lot of con-calls, and will be giving a lot of presentations to Private equity guys in case of Fund raising mandates or to Promoters with regards to an IPO or QIB. Point being, you have to be extremely articulate and most importantly, you have to talk with a lot of conviction because at the end of the day you're a glorified broker - you're always selling something or the other.

A couple of answers here mention about having stock market expertise. Just to clarify, 'Investment' Banking has nothing to do with Investing. Thanks.

Reality check - Fresh CAs shouldn't even plan on applying for IB roles as their efforts will be futile unless they've done their homework. Instead, take a break and work towards fixing the missing links viz. Modelling, valuations, a bit of finance and specific industry knowledge.

Lastly, instead of having pre conceived notions or self doubts about CAs, please address your flaws. I know quite a few CAs who even have founded their own Investment banking firms and are doing reasonably well with their fund raising practice.