So pretty sure I am going to be offered a role as a VP credit risk at another firm whereas I am currently an associate doing credit underwriting for LevFin at my current bank (both lower tier; risk role not LevFin related). In terms of comp, VP role offers better base salary vs current role but lower bonus. In part want to move on from current role, move to VP level, etc but hesitant to move away from what is considered a front office role. Curious what other people would do? Would I have an issue moving back to revenue generating function down the line?
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Based on the insights from Wall Street Oasis, transitioning from a front office role like Leveraged Finance (LevFin) to a VP in Credit Risk can be a significant career move, especially if it comes with a promotion to a VP level and a higher base salary. Here are some considerations to weigh:
Career Trajectory and Goals: Moving to a VP role in Credit Risk might position you better for further upward mobility within risk management. Consider your long-term career goals. If leadership and risk management are where you see your future, this could be a strategic move.
Compensation Structure: While the base salary is higher in the VP role, the lower bonus component typical in risk roles compared to front office positions like LevFin should be considered. Front office roles often offer higher bonuses due to direct involvement in revenue generation.
Transition Back to Front Office: Returning to a front office, revenue-generating role after moving to risk might be challenging but not impossible. It largely depends on maintaining your network within the front office and staying abreast of industry trends and financial modeling skills.
Skill Development: Evaluate the skills you will develop in the Credit Risk role and how they could be transferable back to LevFin or other front office roles. Risk management skills are highly valued and can enhance your profile for various strategic roles within banking.
Market Perception: Consider how the market views transitions from front office to middle office roles. While traditionally seen as a step away from the revenue-generating core of banking, risk management roles have gained in strategic importance, especially post-financial crisis.
In conclusion, if the VP Credit Risk role aligns with your career aspirations for leadership and you are comfortable with the compensation structure, it could be a beneficial move. However, if your primary goal is to stay in revenue-generating roles, ensure you have a strategy to maintain relevant skills and connections.
Sources: Moving Upstream in PE, IB SA No Offer -> Major Entertainment Strategy + Perspectives on Recovering from Failure, Associate guide on analyzing an income statement, Public Finance Q&A, Q&A - Mid-Market Turnarounds
What is the pay differential (TC) of the two roles?
The base salary increase for risk role would be >$25k with TC of approx $275k while current LevFin role has TC of $300k-$325k depending on bonus
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