Would it be more ideal to start in IB post MBA rather than as an analyst after Undergrad?
I recently realized how practically 80-90% of every analyst class from most places tend to quit and go to PE or HF within 2 years. Most people seem to choose to leave given the long hours and look for better options elsewhere, and a lot experience fatigue and burnout along the way. This sometimes seems to impact their outlook in the PE role as well if they’re still tired from 80-100 hr weeks in IB.
That makes me wonder if it’s more optimal to begin IB after MBA instead. Say you went to a good undergrad, had a high gpa, worked for 3-4 years in a somewhat relevant field and then applied to MBA as a 25-26 year old and started in IB at 27-28 as an Associate. You’d have higher pay, analysts that do all the annoying mindless grunt work for you and you would be less likely to burn out if you didn’t join a sweatshop, more likely to make it up to MD
Any MBAs here go that route instead?
a kid has nothing much going around at 21/22 so he better stay in a cubicle and build his resume and save some money, on the contrary, I suppose that a 27/28 years old's time has to be more precious.
Would rather find ways to make passive income post MBA to be honest (real estate investments). Gives me more flexibility to pursue career options that I'm more passionate about.
EDIT: Also for analysts, I honestly can't imagine working those crazy hours when I was in my early 20s. I loved being 'young, wild, and free' near the end of college and the first 2 years out. Had a ton of fun in the NYC area my first years out of college with friends who are now living in another part of the country, married, married w/ kids.
Although, I do think post MBA IB make sense depending on one's career goals. My career goals and the roles I want to get into eventually doesn't usually require a banking background. Consulting can help and I might be considering a 1-2 year stint at some niche firms once the economy bounces back.
I graduated from MBA 5 years ago. I definitely think this path has advantages compared to starting as an analyst after undergrad, however you do start later and have fewer exit options
Agree, I think I would've really hated being a banking analyst right out of college while now where I am in life I'm quite happy where I am as an associate
The majority of people quitting ib because of hours or lifestyle seems to be analysts. This makes sense given the tedious work and the fact that a bunch of early 20something year olds would prefer to spend their time in bars and traveling the world than stuck making comps at their desk on a Sunday. Once people are in their late 20s to early 30s people’s priorities seem to shift and take the job more seriously
Been an analyst for 2 years and would much rather be in MBA associates shoes than mine
Being an analyst sucks. All I do is grunt work and modeling. Update this pitch, update that pitch, upload these items into VDR, answer clients diligence questions, make this analysis. What are my associates and vps doing then if I do all their work?
what do you think they do?
Wondering too. Was considering beginning in real estate but then realized some places don’t pay much to analysts so then was thinking of doing an MBA to get into consulting or ib after. My gpa is kind of on the low end (3.3) and I didn’t study finance but was hoping to try to get my gpa up to 3.5 by the end of uni
I would advise against this for multiple reasons.
1. If you’re in college thinking about this, you can’t plan your career out this far in advance. If you think you want to do banking, do banking as soon as you can. Trying to plan 10 years out with this specificity is a fools errand and will lead you to making bad decisions in my opinion
2. From college / the analyst seat, being an associate seems much easier than being an analyst. It is not. You’re still producing a lot of work, but now also checking everything with the responsibility on you for all of the work to be correct, and having to manage the analysts who, for half of their time at the firm, are either brand new and value destructive or checked out and giving you crappy work. I find the associate role harder than being an analyst and the hours aren’t much better, if at all. Now consider all that while you yourself are brand new and have no banking experience (if you come in post-MBA) nor do you have the respect of the analysts because they are better at the job than you
3. If you’re worried about burning out of banking as an analyst, you’ll burn out just the same, if not faster, as a post-MBA associate…
4. Related, but at 21 - 23, you can do anything. Work long hours, sleep very little, etc. You’re likely not married, probably don’t have kids, and you don’t have any money anyways to be traveling or living it up, so what productive will you really do with your free time outside of the office as a 22 year old? Most of your friends are also working hard... If you’re post-MBA, you’re late 20s, likely married or close. Likely have or are thinking about kids. You have gotten used to an easier work-life balance before b school for a few years. It is a brutal transition, and by the way, physically harder to put in this much time and lack of sleep when you’re 30 vs. 21
6. Doing 2 years as an analyst sets you up incredibly well to do whatever you want to do. It’s a stamp of approval on your resume in a lot of people’s eyes. You’re talking about trading 5+ years of your life doing something you don’t want to do (some other job then b school) to avoid 2 years of doing something you don’t want to do (the hard years of being an analyst)? That math doesn’t make sense, especially because as I said in point 1, you don’t really get to skip those hard years after all, your title is just “associate” instead of “analyst”
I agree with most these. Think the biggest thing is the timing is worse and there is less leniency on associates relative to analysts due to age.
That said, a huge bullshit flag needs to be thrown on the associate job being harder than being an analyst. It just isn’t. The timing of the role is often a lot worse and that can make it harder, but I’ve almost never heard of associates going to the hospital and know a ton of analysts that have been pushed to that point. An extreme amount of associates hide behind analysts and play politics and are genuinely significantly less competent than the average analyst. The job isn’t harder, you have worse candidates on average, working fewer hours, getting paid more. The downsides is it’s often at a worse time in their life and there is less leniency on mistakes or teaching.
I went A2A and am currently an Aso3, so my perspective is it depends on the group you join post MBA, but I’d suggest doing IB out of college.
When you’re 21-24, you’re young and have tons of energy. As long as you don’t join an absolute sweatshop and your group does the typical 55-75 hour range, you’ll probably not burn out from the analyst role. Not sure how you’d feel working 55-75 hours later on, these hours kind of suck regardless. Some of the top boutiques make people work easily over 75+ hours regularly, I would not recommend joining a boutique.
In certain groups, associates still need to work like analysts while also managing analysts. This is less ideal than other groups, where associates merely check the work of the analysts but do less heavy lifting. Most middle markets are a great place to be an associate. You’ll likely work less than 65 hours regularly in these places aside from the largest MMs.
This is a point in time when you also don’t have many other responsibilities so you’re really just missing out on going to the bar on some Friday nights occasionally.
Many places now have a 2 year analyst program now and promote more A2A. This lets you have the opportunity to become an associate at age 23-24 making over 250k each year afterwards. It’s good to start saving earlier. At this point you could choose to continue in IB or move to PE. There may be fewer opportunities to move to buyside if you do bschool.
Nothing wrong at all with going to an MBA program however, and most of your seniors likely were also MBA grads who became MD.
Why did so few MDs originally begin as IB analysts? Seems like most are MBA grads
the analysts left asap
This is a very interesting question and I have wondered the same thing.
MBA associates typically try to stay in ib for the long haul meanwhile a2as are more inclined to move to PE
Not the case at my B school, majority of my friends going into IB want to either go into industry or a niche PE firm that's covering the industry they're going into. Can only think of like 20% that seem legitimately interested in career banking.
Industry as in corporate? Do they need IB then beforehand? Unless its just to make some better comp for a few years first.
Maybe it’s the other way around. Senior folk often tend to be MBA grads, but junior folk don’t always want to do banking for the long haul, although everyone’s different
You forgot the 200k in student loans and probably another 200k in opportunity cost. You have to really want to stick with it for at least 5 years for it to be worth it. If you get a decent scholarship the value prop looks much better.
You’re basically locked in as an MBA associate for 2 years trying to pay down your loans. Even more difficult if you have kids and GF and need to pay for them as well.
Having kids + a gf would certainly be expensive for someone in an MBA program. Maybe during that time if the wife is working she can help pay for stuff?
As a current post-MBA I disagree. There are advantages to coming in as an Analyst that outweigh the benefits of coming in at Associate.
Many teams will favor any A2As that are on the team. This gives you less opportunity for high quality reps early in your Associate years.
Additionally, you don't get to "skip" the grunt work. If you're going to be a good Associate, you need to actually know how to do shit which requires getting in the weeds.
As others have mentioned, post-MBA you have less optionality as well. Personally I HATE the idea of CorpDev (unless at a very acquisitive company where it might be interesting) so my options outside of IB are quite limited.
I would argue always better to come in as an Analyst. The useless MBA Associate tropes are believed and will work against you until you prove otherwise.
I think the bschool grads are often more stressed from having to stick with the role for at least 3+ years to repay the grad school loans.
Some places sound super tiring to be an analyst and could see why many people wouldn’t want to work in the role longer than a couple years.
So why are most the senior bankers MBA grads then?
Because 80%+ of analysts quit by 2 years to go to buyside or elsewhere
That’s certainly part of the reason, but guy below has some more insight from historical context
I believe the reason most senior bankers have an MBA is because historically, many firms would have a set 2 year analyst program and then encourage analysts to go to buyside while hiring their entire associate class from MBA programs.
This is how it was at EVR and several other shops even as recent as a few years ago. Only with the past few years have firms started to source associates from their analyst classes.
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