So I have heard from some that IB pays better than AM, but how big is the pay gap really? Also, what about exit opportunities? If you work at an AM without IB experience, could you still go down the corporate/F500 path? It seems like you would still gain the same skills, just on the buyside, not sell side. Is being in AM rather than IB really a lesser position?
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I would argue that some AM like the LO shops (Fidelity particularly) is a better gig than a lot of banking.
In terms of comps, exit opps, or just in terms of work?
Comp: Avg in banking will likely be higher than LO shops across the board, but at the respected LO shops the gap will be pretty small.
Exit Opps: Ultimately depends what you want to do. LO is the exit opp for many, but you can also switch into HF easier than banking. If you want to do PE, then the banking route is the obvious choice.
There have been many discussions about this. I would recommend searching around WSO for more info.
comp is going to be a lot better for juniors in IB, but a big PM at somewhere like fidelity makes a hell of a lot more than a big MD at any bank. Good PMs pull 8 figures easy, most MDs in IB don’t come close to that.
Lot of different roles in AM. Most on this board think about PM (start at ER and work up to PM). There's a whole different side in distribution. These guys/gals also make a very good living with a very good life style. Evolves more into a relationship mgmt role but they still have to know a lot about the markets, macro econ, etc. Just like Corp Banking becomes more of a relationship role at the higher levels.
Interesting. Could you explain the distribution roles a little more? Is this basically sales/relationship management?
Wholesaling to retail wealth managers. Institutional client management (Central Banks, Sovereign funds, endowments, pensions, family offices, etc.). Responsible for positioning your firm's AM to the institutional client. Have to have your chops to explain why X or Y to the CIO of a 2B endowment or the IM team for a state pension fund, but you also have to be a good relationship mgr (sales/service acumen). These guys make a very good living.
On the retail side (wholesaling to RIAs, wirehouses, IBDs, etc.) these guys make great money. Know several that have hit 7 figures multiple yrs. Most make around 500 once they're established. The ones that are consistently 250kish get fired.
Becoming pretty common for these distribution roles to get their CFA. Never used to be like that.
That sounds like a great role. Are you pretty much pigeonholed from there though, or can you lateral to the investment side? Also, is this a job you can get right after undergrad?
I used to work in a client role and product role at a top IM shop. The investment professionals at a director level make a very good living and probably work 50-60 hours tops, but have to travel very often. I don't recommend starting out in this job because you don't learn much at all and you quickly pigeon-hole yourself in a client role, and the other exit options are other client-facing roles at HFs/alternative shops/asset management. You have no input in the investment decisions, and mostly repeat to clients whatever message comes from your firm's portfolio managers or investment committee.
It's a role that makes sense further down the line after you have built a variety of experience, but not as a starting role. You want to start in a role that gives you as much latitude as possible in terms of career options and where you can learn a lot and build valuable skills.
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