Career Definition of Investment Underwriters
Investment underwriters typically work full-time for investment banks. These underwriters deal specifically with companies who become public and want to sell shares of their company stock, known as initial public offerings (IPOs). Investment underwriters play an integral role in assisting companies with a seamless transition from a private company to a public one. Once an investment bank ensures a company meets all applicable regulatory requirements, the underwriter then takes over the transition process.
Investment underwriters are responsible for determining the price of a company's IPO stock. These underwriters do so by contacting potential investors, including organizations like insurance agencies and mutual funds, to ascertain their potential interest in investing in a company. This process allows the underwriter to gain a better understanding of how well a company's stock may fare in the public marketplace and how much the company is worth. After determining the price for a company's stock, investment underwriters are also responsible for ensuring that a set amount of stock shares will be bought at the set price. These underwriters then provide a guarantee that the investment bank will buy any of the company's surplus stocks.
Investment underwriters may also help companies execute mergers and acquisitions.
|Educational Requirements||Bachelor's degree|
|Job Skills||Excellent analytical abilities, strong communication skills, and effective project management abilities|
|Median Salary (2019)*||$62,270 (Securities, commodities, and financial services sales agents)|
|Job Outlook (2018-2028)*||4% (Securities, commodities, and financial services sales agents)|
Sources: *U.S. Bureau of Labor Statistics
A career as an investment underwriter will require a bachelor's degree in finance, accounting, or economics. A Master of Business Administration (MBA) may improve salary prospects and lead to additional opportunities. Investment bankers are required to obtain licensure from the Financial Industry Regulatory Authority (FINRA), which involves passing exams and taking continuing education courses.
Excellent analytical abilities are one of the most vital assets for an investment underwriter. These underwriters must be able to conduct research with potential investors and analyze that information for the underwriting process. Investment underwriters should have strong communication skills in order to interact with clients and interface with potential investors. These underwriters should also have effective project management skills in order to successfully oversee all aspects of the underwriting process.
Career Outlook and Salary
The U.S. Bureau of Labor Statistics (BLS) does not report information on investment underwriters; however, they include investment bankers with securities, commodities, and financial services sales agents, and estimate 4% job growth for these professionals during the 2018-2028 decade. This growth is about as fast as average compared to all occupations. In May 2019, the BLS reported a median annual salary of $62,270 for securities, commodities, and financial services sales agents.
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