MBA Career Switch to IB Associate

Hey Everyone,

I am interested in going to business school to switch into investment banking. I had some questions for career switchers who started IB as an associate. It may help to give you my background. I received an engineering degree from a semi-target school (think Vanderbilt, UVA, Northwestern). I work for a Tier 2 consulting firm doing tech consulting that involves a lot of coding. I am applying this fall to business school and recently became interested in finance. I think I would like IB because its challenging, client engagement oriented, and impactful. I was hoping to get input on any of the following.

1) For those who switched into IB as an associate, do you still like it? If so, what do you like about the work?
2) Was recruitment hard in business school since you didn’t have a finance background? Is there anything I can do now to prepare myself?
3) Could you give an example of a normal day for you?
4) What is the culture like? If you switched from consulting, is it a lot less collegial?
5) Is it difficult to make it to VP? Once at VP do the hours drop considerably?
6) What are common exit opportunities?

Thanks

 

I can't really comment too much on the actual job, but I an an ex-engineer with an MBA. Plenty of ibanks come to campus if your at a good program and you have a chance to network. If you do all the networking and prepare for the technical part you will be fine. As an Associate it is fine to not have as much finance experience (they will train you) but you need to demonstrate that you understand the basics. Also, your best best would be to recruit with a firm / group that focuses on something similar to your pre-MBA work (technology banking). If you thinking about this far ahead you'll probably be fine.

As a side note if you can always start looking for something now. An MBA is not the only way in the door.

 

Is the time frame for summer associates at the same time as when recruiting starts for summer analysts or do they stagger it a little bit so they aren't too overwhelmed with hiring?

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Best Response

I'm not an MBA --> Banking associate, but was a banker for a bit and I've certainly seen my fare share of MBA associates.

I can answer a few of your questions based on my second hand experiences.

1- I large chunk (30-60%) of MBA Associates leave the industry within their first few years out of b-school. I chalked this up to having a false sense of what a career in banking looks like + realizing there's very little time develop you personal life + probably having gotten 1-2 bonuses having reduced the size of the student loan burden. Also, many of the MBAs I saw were somehow under the impression that you'll be an associate for a few years and then can do PE/HF. Not so at all.

2- Most of the associates we hired did not have finance backgrounds. If you're getting your MBA at a reputable target b-school, this is a non-issue. If you're not getting your MBA at a reputable target b-school, then you're wasting your time and money.

5- Depends on the firm, culture, group and how you manage yourself and others. I saw VPs that would stick around in the office until very late every single night... I saw others who would skip out at 7-8 PM every night. The VP seat is a very tough one, because as a Jr banker all thats expected of you is that you'll work your balls off. As a senior banker you're expected to cover clients and produce. As a VP you're expected to (somewhat) do both. So you have the stress/pressure of transitioning to a primarily coverage/producing role with the demands/hours of still being a junior banker.

6- People don't really do post-MBA banking for the exit opportunities. But most of the people I saw leave did so to either go back to their old careers/fields or go to a corp dev/finance role at a corporate. Some went to less demanding finance roles like Asset Management, PWM or risk. Some took a crack at launching a start-up. The reason I don't consider any of these exit ops is because a banking associate isn't really a prereq for any of those paths. They very easily could have done that directly out of b-school.

I think many MBA's graduate and intend to now build a foundation for their life, i.e., meeting someone, get married etc. As a newly minted associate, that's very difficult to do. Many of the people I saw disenchanted with the MBA associate life belonged to this cohort. Or they started banking in a serious relationship which subsequently fell apart or became very strained because of the lifestyle.

Lastly, I think MBA associates, much more so than analysts or promoted associates seem to be very in love with the idea of being a banker, they for some reason think its very glamorous. Its not. You're a bitch. You'll live your life as a bitch for many years, and then you'll be the clients bitch. If you go in with realistic expectations you'll have a much softer landing when you the anti-gravity of b-school wears off and the gravity or reality quickly pulls you down to sea level.

 

Hi Marcus- Thank you for the candid and thought-provoking response. Do you have tips for IBD associates interviewing for post-MBA ops? What can we say to prove we have what it takes? How can we ensure hiring managers we won't burn out? And finally as a female candidate, how to make sure no one thinks I'm going to leave to have babies, etc.? (delicate subject, but a reality!)

 

I went down a similar path (non-financial consulting to MBA to IB)

1 - I'm going into my third year at a MM group and have mixed feelings. I like the firm, culture and group of guys I work with. The amount of interaction with the C-suite and challenges with each specific engagement is also appealing.

2 - It was an uphill battle, but if you network hard and put in the time on the technical side, you should be able to land interviews through OCR. I landed an internship based on demonstrating interest in the field/position.

4 - Depends on the group, but it isn't necessarily less collegial. At the end of the day, you are providing financial consulting services to your clients. The culture will be more intense and work more time sensitive, but you generally will have a team working on each deal (e.g. 1-2 analysts, 1 associate, 1 VP, 1 MD).

5 - It can be difficult, but it depends on the firm. There generally tends to be a numbers gap in the middle, meaning the largest number of employees by title are 1) analysts and associates and 2) MDs. Think about a sexy woman with an hour glass figure and apply that to the hierarchical chart, where the VP is the midsection.

For visual reference:

I would say that moving beyond VP is more difficult than making VP. There tends to be a significant amount of talent and fewer openings.

6 - This is the most difficult. As Marcus pointed out, too many people (myself included) were lured in assuming they could make the switch to HF/PE. It is easier at the MM level to make the transition, particularly if you are going to move at the VP level. However, most firms still prefer pre-MBA associates, so lateraling within two years would be difficult.

The most obvious exit opp would probably be going to Corp Dev or Corp Strat groups. The MBA is held with higher regard in the corporate setting and a combination of IB experience and your strategic thinking is an ideal fit for most groups.

 

Hey Tony,

Thanks for the visual, it was quite stimulating.

I had a couple questions if you don't mind.

1 Why do you have mixed feelings? Are you happy you made the switch from consulting to IB?

2 Is there anything I can do now (with about a year until B school starts) that you would recommend to be ready for that uphill battle? Maybe some of the WSO modeling courses?

5 What are the VP hours like at your firm? Also, being in your third year as an Associate are you seeing your hours being more manageable?

Is there anything else I should consider before making that switch? Thanks again for your time.

 

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