Building a Career at an EB nonsensical?
EBs are known for paying significantly more than BBs, but there’s growing debate about whether they offer limited career paths for mid-level bankers (Associates and VPs). EBs tend to follow a different model where they often hire experienced senior bankers with established client relationships rather than promoting from within. This approach allows them to focus on top-tier deal execution without heavily investing in nurturing junior bankers into senior rainmakers.
The question then arises: what happens to those Directors or MDs at EBs but struggle to build a large enough book of business to reach the Partner level? Is there an inevitable exit, do they all get pushed out, or do some manage to climb to the top despite these odds?
For those starting as Associates or VPs, stories of building a book and reaching Partner are rare. It seems the EB model may limit internal advancement, prioritizing lateral hires with proven business over home-grown talent. Would love to hear others’ insights on whether this model is sustainable or if EBs could start investing more in internal career development to support long-term growth.
Based on the most helpful WSO content, here's what you need to know about building a career at an Elite Boutique (EB):
Promotion and Career Path:
Impact of Financial Crises:
Generalist vs. Specialist:
Organic Growth:
Job Stability and Security:
Sustainability of the EB Model:
In summary, while the EB model does prioritize lateral hires with proven business over home-grown talent, there are instances of internal promotions and organic growth. The sustainability of this model may hinge on whether EBs continue to invest in internal career development.
Sources: EBs have more interesting work than BBs?, boutique v BB, Will EBs eventually go out of business?, Will "Rising EBs" ever become EBs? Do they even want to become EBs?, 8 Reflections on Leaving IB After a Decade
The senior people who are attracted to EBs are presumably ones with very strong connections into fee-generating clients. For the bank, it does not make sense to focus on internal promoting when you are already bringing in the rainmakers from your competitors. Most EBs have a history of bringing on older partners (55-60+) who are at the end of their careers and want last stint, while capitalizing as much as they can on it (preferably in cash comp). These partners are a lot more profitable than young, home-grown partners, and I'd also argue that it comes with less risk. So why would they change?
EB juniors get something for this trade off. Higher pay and less pitching. But would agree for LT optionality GS/MS/JP better to start at
Hearing conflicting sentiment—even smaller shops like Q/LT seems to care about analyst retention, but those might be special cases
Limited view OP. My thoughts below having been at both a BB and an EB.
While I understand your perception that EB junior teams are just execution functions for MDs, this is not always the case.
I agree it's harder than BBs where there is more leverage to go build your coverage and you do more BD with clients.
On the flipside it's a crowded space at the top with almost every sector and subsector covered in BBs So getting to MD often needs a senior MD to sponsor you and effectively fund you as a junior md bag carrier.
It's about self drive with EBs. You can get to MD arguably faster, it's less crowded at the top and you can carve out your own niche.
EBs have a culture that awards proactively and being a self starter. Not everyone In banking is. If you're not that way inclined then stay at a BB with balance sheet and let the firm carry you up the chain. Downside there at a BB is business is often given because of brand and lots of people can't originate without a big brand behind them. You become and MD who sells brand and balance sheet rather than actual advise.
Just depends on who you want to be.
Nonsensical is probably too strong, but it is much more challenging to become a successful senior banker. And if you wash out at ~Director at an EB you will find it tough to pitch bulge brackets on your utility because you lack the product experience that your peers at the bulge possess.
it goes the other way too. I’ve seen BB MD’s who were strong producers move to EB’s only to find out life is a lot harder when you’re not in everyone’s credit facility.
It’s considerably harder. There’s a reason why the most senior ranks are majority former BB MDs.
They effectively used the BB platform to develop their client base because you are able to have way more touch points. Now the ones that succeed at EBs were able to become trusted advisers rather than concierge bankers that relied solely on the brand of their BB. There are plenty BB bankers who chase the EB check and quickly realize they only had a large book of business because of their firm.
Your issue as a young homegrown EB banker is the over-reliance on M&A / strategic advisory. You simply have less touch points, particularly in overbanked sectors. It’s not impossible to be successful…it’s just A LOT harder.
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