Regardless of what career or entrepreneurial path you may want to pursue in the future, investment banking gives an unparalleled foundation for that path. This answer is not the same answer you would give in an interview. For more on that, please refer to our interview guide.
- Compensation – All-in pay exceeds all other entry level positions except for top-tier programming firms. You are looking at 130-150 as a first year analyst and 200-300 as a first year associate – provided you save your bonus and are not wasteful throughout the analyst or associate program, you will have strong financial security;
- Learning – Exposure to industries, valuation and what businesses need well in excess of starting out in any Fortune 500. You work twice the hours of a job in industry but come out learning as much as three times the work due to the intensity and volume. You will leave with a strong foundation in Excel and PowerPoint, which you will find is used in every job. You will also leave with superior time management skills and the ability to manoeuver around workplace politics.
- Exposure to Senior Management – Participation in client meetings is a huge bonus, but listening in to calls and interacting with senior bankers (who may make well in excess of many client C-suites) allows you to better understand how a business executive thinks and what strategic considerations are important.
- Network – Your peers will be equally ambitious and intelligent; finance is a relatively small community, so this will be instrumental in helping you in whatever you are doing afterwards.
- Exit Opportunities – The stamp on your resume allows for a transition into a variety of career paths, including jobs in private equity, hedge funds, asset managers, leading corporations, banks and government. If you love puppies, being an investment banker will make you a better steward of your dog shelter. This skillset and understanding of money flows through to non-profits, where they are arguably needed even more.
The downsides most cited are psychopathic and deceitful coworkers, long hours and high job stress.
From experience, you will find unsavory coworkers in any industry or job. The quality of people in finance roles is generally higher than those in other industries, and overwhelmingly well-read, have a variety of unique interests (that they may or may not be able to partake in, as per point 2) and are community oriented and empathetic people. On average, top tier organizations hire people with broader exposure (which correlates with intelligence and polish), which usually translates to holding some basket of the aforementioned qualities.
We have serious doubts that you will encounter fewer breaches of conduct in a retail bank or a better political environment in a hospital. Fundamentally, people are people. This is also an opportune time to throw commercial real estate brokers under the bus.
Now whether or not this is a recent shift in the industry is questionable, but the reality is that corporates have undertaken larger social responsibility initiatives and have made strides to ensure that the work environment attracts talent. In addition, there is zero tolerance of poor behavior accentuated by Hollywood and literature (which do exist to sell) with burgeoning compliance divisions and the microscope of the media given the industry’s role as society’s favored scapegoat.
We are happy to vouch for the individuals we know working in finance have great integrity and do not compromise their values. They pay large amounts of taxes and contribute much to charity (which is of course, tax deductible).
The long and inconsistent hours that come with investment banking are valid. This is a gruelling lifestyle and should not be taken lightly. However, the reality is that there are no free lunches and regardless of what industry you work in, often the best performers are the ones who stay late and work hard. On the trading floor, the MD that generates the most money is often the one who leaves last as he stays behind to generate ideas.
Ultimately, you are your deal experience, and the exposure and repetition (coupled with a genuine interest in understanding what you are doing) is the foundation you build on in terms of developing yourself as an asset to any company or client. Just like anything else, practice makes perfect. No one is going to be able to build a robust, functional and effective model right away, and if you manage to land a decent exit without learning such skills, you are going to figure out you are going to wish you had.
Stress is real. Deadlines and sleep deprivation definitely take a toll on well-being. These can be mitigated by effective time management – you should never need to pull an all-nighter if you are pragmatic and schedule out your time, and if you do, you have a poor boss. However, managing stress is a part of growing up, and working under stressful situations is good preparation for anything going forward.
To conclude, trying for investment banking is a worthwhile endeavor. If you fail during the interview process, you will still leave with an immensely expanded understanding of how to interview as well as an appreciation for how capital and the economy work. If you quit after a two year (or one year) stint, you will have a nice stamp on the resume and a great stepping stone towards the next chapter and a strong skillset in terms of data manipulation and communication.