Everything in finance is shrinking - where do you think the opportunity is?

So as you guys are all aware, IB headcount is decreasing, PE/HF positions are much more difficult to secure with the golden years ended well over a decade ago in both headcount and comp. There will still be some opportunity in these opps, but they will be far fewer in number as well.

Where do you guys think the opportunity is these days? Or to put it another way, if you were a recent college graduate, where would you want to be right now/look into getting into over the next decade?

 

Mind elaborating? I ask since of course we all know the founders (Musk, Speigal, etc.) who were able to hit it big with IPO's, but the vast majority of people don't nearly make as much as HF/PE guys (on a percentage basis) or see the same career upside. As much as there is huge opps in tech, it is overstated IMO as to how many actually are able to get the full upside on their work

 

Disagree about the "or see the same career upside". Finance is a strike mission these days...get in save as much as possible and get out. Finance is not a career anymore. If you are lucky and land some good roles and don't blow your money you will have some decent optionality after saving for a while but odds are it will not be a longstanding career - except for a select few. You can work at a PE/HF, and be really good for that matter, and getting a similar job if needed could be next to impossible. Conversely, tech/engineering is much more a career. You will likely have that job forever in some capacity if you want one. The odds are much much more in your favor in tech than in finance.

 
<span itemprop=name>therealgekko</span>:

Mind elaborating? I ask since of course we all know the founders (Musk, Speigal, etc.) who were able to hit it big with IPO's, but the vast majority of people don't nearly make as much as HF/PE guys (on a percentage basis) or see the same career upside. As much as there is huge opps in tech, it is overstated IMO as to how many actually are able to get the full upside on their work

Actually enterprise tech has become very much like investment banking insofar as career progression goes.

On the sales side (read: front office) of Salesforce, Oracle, SAP, etc. there is typically a two year SDR (sales development representative) + BDR (business development representative) program where you're working for account executives (read: doing bitch work like an analyst).

You would then do 3ish years in small-medium business account executive roles (read: similar to an associate in responsibility level).

After that, you do a few years in small enterprise type roles (read: vice president) before moving on to regional vice president, area vice president, senior vice president (Director, Managing Director, Group Head) and then to executive levels.

These obviously aren't perfect comparisons, but they are a decent rough guide. On average you'll make more in finance at each level, but you'll work way less hours in tech.

 

Not as easy to get into technology jobs. MS/PhD candidates are heavily sought, and the technical interviews are difficult too.

Data Scientists are a dime a dozen, well-above six figure pay, great hours (35-40 hours), and more control of what they do on a day to day basis. I got the chance to work with a few data groups at the big corp - Intuit, Qualcomm, HP, Samsung, etc. and they were some of the happiest folks to meet.

 

In the short term, it's not like finance is drastically shrinking - it might not be drastically "shrink" in the long run. It's still great to land IB, PE and other roles out of school. Once u get those positions, it sorta leads you on to other finance roles. However, if u don't pursue the finance stream, there are a lot of students going into "unconventional" career paths - starting online businesses, etc.

For active management I think there are increasing opportunities in the Credit/Distressed Debt world. The credit market is nearly twice as big as global equity markets and are far more diverse in terms of securities.

 
Best Response

in all seriousness, finance is a great way to start because it teaches you all about business, every aspect of a company.

what I keep noticing on these forums is kids just wanting to chase the hot dot. yes, it's important to know which industries are doing well versus which ones are floundering, but tech & finance are so massively different it makes me think that most students today don't even have their own identity or know what they want, they just want a job, and I think that's a recipe for disaster.

make no mistake about it, I didn't have a passion for cold calling just like I'm sure no one here has a passion for changing fonts on powerpoints and making up discount rates so the DCF looks good for the client, but writing code and talking about M&A are very, very different. if you want to create, yes engineering will be a good place for you, software or otherwise. if you like deal making, investing, etc., then maybe not.

as much time as people spend looking for the greener grass (internship, SA, job, MBA, job, divorce), you ought to dedicate some time to look inward. I think it's a fine idea to do something like banking, consulting, etc., if you don't know what you want to do, because it exposes you to a broad range of areas and gives you marketable skills, but don't just go into a career path without some deep thought.

same thing with software. I'd imagine that those skills are very marketable, but you have to be into that sort of thing.

industries will wax & wane, secular declines take a while to come to fruition. in terms of a 4 year college experience, just build a solid professional foundation, and look for what makes you happy, whatever that may be.

 
DeepLearning:

Literally this. I'm always so confused by posts where people are trying to decide between going into investment banking and going into software engineering. It makes no sense to me.

One significant reason for this panic is that we, as scientists, have failed to effectively communicate and/or emphasise the difference between machine learning and general AI. (Although, the scientifically-illiterate and, often, sensationalist and deceitful media are more-so to blame.) The overwhelming majority of the population think that we will be living in an iRobot-like future within some reasonable time period. The fact of the situation is, no knowledgeable AI scientist even thinks we are close to knowing many of the essential questions required to ask about creating AI; in other words, there is no reasonable time period in which people's fears (or dreams) about an iRobot-like world would become reality.

Now, we will still see a subset of finance jobs become fully automated as machine learning increases productivity. But to the extent that the majority of jobs will be affected by machine learning, it will not be by fully replacing the human.

 
<span itemprop=name>thebrofessor</span>:

in terms of a 4 year college experience, just build a solid professional foundation, and look for what makes you happy, whatever that may be.

I think this is a great point. Reminds me of a conversation I had with a professor I spent the summer working for in college. He was in his early 80's and was in the twilight of a distinguished career in biomedical engineering. His CV looked like it had been explicitly designed for a purpose: he was an MD/PhD with an undergraduate engineering degree, and worked with the right combination of academia and industry to basically design the field in the 60's and 70's.

So I asked him how he had done it. He kind of laughed at me and said that the only reason his career looked so well-planned was in hindsight, and that he had taken on projects and positions that 1) were different than what he had done before, 2) were intellectually challenging, and 3) he felt he could devote himself to and do as well as he could. The result of that was his complex career path, which never stagnated for very long, and continued to afford him new opportunities.

He told me that I could lose sleep trying to figure out what I wanted to do in 30 years, or I could accept that nobody knows exactly what opportunities there will be in 30 years, so the best I could do was pick a short-term path, pick it for the right reasons, do it as well as I can, and then see what comes next on the other side.

That was 10 years ago. Since then, I've been at three schools, held three internships, and I'm about to start my third full-time job. My career path now looks like it's been exquisitely designed for my next opportunity, but I can promise that it only appears that way in hindsight.

"Son, life is hard. But it's harder if you're stupid." - my dad
 

This is why I think consulting jobs are great (especially MBB), it gives you great variability to go into any field you want. Whether it is law School / politics / foreign relations (Mitt Romney, Bobby Jindal, Susan Rice), technology ( Sundar Pinchai), finance (James P. Gorman), or F500 (countless CEOs).

 

There is not a lack of opportunity for business/accounting majors (see below).

https://www.wsj.com/articles/where-college-seniors-are-falling-short-14…

If you're looking for a field where a person with a very strong work ethic and slightly-above-average intelligence can reasonably expect to achieve a net worth > $1mm by 35-40, the answers are literally unchanged from a decade ago:

Tech Finance Law (though this one you could argue has suffered the most in the interim) Medicine

For the kids on this board commenting as if learning to code just recently became a valuable skill, a quick reminder:

MSFT IPO - 1986 (30+ years) Appl IPO - 1980 (30+ years) Google IPO - 2004 (13 years)

tldr: From the perspective of a junior employee, the world isn't all that different than it was a decade ago. Stop trying to time the market and focus on doing what you're good at + enjoy.

Life's is a tale told by an idiot, full of sound and fury, signifying nothing.
 

Just because you hear people sounding an alarm and creating narratives about the job market doesn't necessarily mean you should panic. It just means it'll be more competitive and if you really want to do something, you'll need to work hard, do it well, and you'll succeed. You should be striving to become better than everyone else, especially if it's something you really want to do.

If you find yourself feeling lost, go climb a mountain.
 

Technology is by no means the only headwind eliminating previously desirable jobs in finance. How about regulation? Regulators destroyed equity research, much of structured finance / credit trading, and prop trading desks. Algorithmic trading and various digital innovations have eliminated many other trading jobs. ETFs and, I would argue, increasing ease of access to information are eliminating jobs in the mutual fund and hedge fund industry. Roboadvisors and passive management are hurting brokers. The specialists at the exchanges were eliminated long ago.

What's left? Investment bankers, private equity, and fields like activist and distressed investing as well as direct lending. I think anything that was based on generating alpha or an excess return on labor if you will, has been ground down due to competition and reality rearing its head. I'm afraid we are living after the gold rush.

It its important to keep in mind, however, that there is more opportunity swimming with the tide of technological and regulatory change than against it. Larry Fink and Jack Bogle have done pretty well in the new era and many others have as well.

 

pepperoni is like the Barclays capital markets to the goldman TMT that is bacon.

but yeah, dumb question. the best job in finance is the one that you enjoy parts of, enables you to have the lifestyle and level of wealth that you want in a geography that works for you.

for me, this is PWM (duh). for others, not so much. to each his own.

 

Doloribus expedita repellendus ea dicta sed dicta. Nemo omnis modi enim quia aut. Rem suscipit tenetur soluta quia et esse architecto non. Ab molestiae est et quis.

Eligendi rerum animi qui incidunt quia dignissimos aut. Quisquam nesciunt quam enim soluta. Voluptates ea est inventore quis qui fugiat eos maxime. Expedita dicta veritatis id rerum perferendis. Non ea totam et architecto fuga ea qui ex. Temporibus saepe ducimus magni atque perspiciatis quos omnis.

Laborum dolor voluptatem molestiae enim provident voluptatem saepe cupiditate. Dolorum velit dolore totam dolor ipsa provident quia. Dolor est dignissimos in dolore.

Quasi dignissimos sapiente quo ut aut. Repellat id vel explicabo consectetur. Qui voluptas dolorem quos ullam. Culpa vitae et placeat dolorem qui.

If the glove don't fit, you must acquit!
 

Velit pariatur eius velit ea quia deserunt sunt. Aut ut architecto ut voluptatem.

Libero excepturi suscipit consequatur reprehenderit. Ullam mollitia fugiat labore aperiam accusamus illo. Qui culpa in iusto possimus porro eos.

Laborum et velit consequatur vitae aliquam neque in. Mollitia non delectus rem odio omnis suscipit. Labore doloremque et et quia facere quo et.

Praesentium rerum exercitationem sunt dignissimos quia autem. Dicta odio fugit ut sapiente.

[Comment removed by mod team]

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”